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Press review: What’s on the agenda of Putin’s Iran tour and global GDP to get hard landing

Top stories from the Russian press on Tuesday, July 19th

Vedomosti: Putin to discuss nuclear deal issue during visit to Tehran

The leaders of Russia, Iran and Turkey will hold a meeting on resolving the Syrian crisis during Russian President Vladimir Putin’s visit to Tehran. Besides, Putin will discuss the nuclear deal issue with Iran’s President Ebrahim Raisi and Supreme Leader Ayatollah Ali Khamenei, Vedomosti notes.

Kamal Kharrazi, a senior advisor to the Iranian supreme leader, stated on July 17 that "within just a few days, we were able to enrich uranium to 60% and we can easily produce uranium enriched to 90%." "Iran has technical means to make a nuclear bomb, but Iran has not yet decided to make it yet," Kharrazi pointed out. "If this is true, then almost 30 years of sanctions on Iran over its nuclear program will go down the drain. It also means that [former US President Donald] Trump’s move to withdraw from the Joint Comprehensive Plan of Action could have given Iran’s nuclear program a boost instead of impeding it," Director of Programs at the Russian International Affairs Council Ivan Timofeev pointed out.

Kharrazi’s statements make it clear that Iran is only ready to return to full compliance with the JCPOA if the US provides a major concession, said Adlan Margoyev, a researcher with the Center for Middle East Studies at Moscow State Institute of International Relations. Removing the Islamic Revolutionary Guard Corps from the list of terrorist organizations would have been an option but it did not happen. There currently are no other meaningful ways for Washington to prove to Tehran that returning to compliance with the nuclear deal will be beneficial, and it won’t be enough for the United States to simply get back to the JCPOA, Margoyev added.

According to the expert, Tehran believes that if efforts to restore the deal fail, Iran will cope with the sanctions. Moreover, Margoyev notes that since Biden took office as US president, Iran has increased its oil exports by 30%, mostly to China, with the United States turning a blind eye to it. However, it is another thing that the failure of efforts to restore the JCPOA will lead to a rise in tensions in the Middle East, either because the US and Israel will try to destroy the relevant facilities or because Iran will get a nuclear bomb.

 

Izvestia: EU may be slowing down pace of sanctions

The European Union may approve more sanctions on Russia before the end of the week. The seventh package of sanctions against Moscow that EU foreign ministers discussed on July 15 includes an embargo on Russian gold and measures to increase control over the export of dual-use and advanced technologies to Russia. However, experts interviewed by Izvestia are confident that Brussels has run out of ways to build up sanctions. Besides, the new package contains a number of exemptions, which particularly facilitate Russian food exports.

"The EU has clearly exhausted its potential to expand sanctions. As for gold, there won’t be a complete embargo because it won’t apply to jewelry and gold bars. That means that these measures will in no way affect Russia’s export capacity in terms of gold. In addition, Russia can easily redirect export flows to other countries," Deputy Director of Higher School of Economics’ Center for Comprehensive European and International Studies Dmitry Suslov noted.

"As far as the gold embargo is concerned, I can only welcome it. I believe that we need to keep gold stocked at home rather than exchange it for paper banknotes," First Deputy Chairman of the State Duma (the lower house of parliament) Foreign Affairs Committee Alexey Chepa pointed out. "It is Europe that is suffering the most from the sanctions war. The cynical attitude of European politicians towards their own people is incredible. We can see inflation rates and prices soaring. Apart from economic problems, political issues are also emerging as government officials are stepping down in a number of Western countries," the lawmaker added.

According to Suslov, the already imposed restrictions are excessive. "EU countries are increasingly discussing the boomerang of sanctions that’s stinging them more painfully. What European politicians seek to convince the people of is not the need to impose new restrictions but the need to wait and see the effect of the existing ones," the expert noted.

 

Nezavisimaya Gazeta: Global GDP about to make hard landing

The global economic situation continues to deteriorate. The International Monetary Fund has warned of negative changes in the global economic forecasts that its July report will contain. As far as Russia is concerned, the worsening global economic prospects create risks of a decline in prices on all goods that the country exports, Nezavisimaya Gazeta notes.

Experts see several reasons for falling global GDP. "Western countries faced an energy crisis before fully recovering from the coronavirus pandemic. And then, they launched a war against the world’s largest exporter of resources," Executive Director of the Capital Markets Department at Iva Partners Artem Tuzov emphasized. As the largest exporter of resources, Russia does depend on the global economy, the expert noted. "Declining demand for commodities will bring down the prices of all resources that Russia exports, triggering a downturn in the Russian economy, too," the expert said.

"The situation in Ukraine raises geopolitical risks. The related sanctions and a decline in the supply of resources to the global market are exacerbating the actual shortages of energy and agricultural commodities, pushing up their prices and undermining the cost-effectiveness of many businesses, as well as effective demand among companies and individual consumers," TeleTrade Chief Analyst Mark Goikhman explained. In addition, high global inflation rates caused by previous monetary injections into the economy to combat the pandemic are now forcing central banks to raise interest rates to counter rising prices, the expert added.

In such a situation, it would be presumptuous to expect the global economy to robustly grow. Besides, China, who could have improved GDP rates in 2022, has chosen the path of zero tolerance towards COVID-19, which has been causing the country to impose lockdowns on entire regions, Tuzov stressed.

 

Kommersant: Gazprom declares force majeure on European gas supplies

Gazprom’s major clients in Germany - Uniper and RWE - have received notices of force majeure from June 14. This was when Gazprom announced that Canada had refused to return a turbine for Nord Stream, causing the gas giant to cut gas supplies through the pipeline to 40% of its projected capacity. Analysts believe that by taking such steps, Gazprom seeks to escape penalties for gas shortfalls, Kommersant writes.

Gazprom’s long-term contracts determine the minimum and maximum levels of daily supplies for every quarter. If the gas company fails to meet even the minimum request for supplies, an importer has the right to charge a penalty, which consists of a fine and compensation for gas shortfalls. Many European customers made statements after June 14 that their requests weren’t being fulfilled. In particular, the situation pushed Uniper to the brink of bankruptcy so the company had to purchase gas through stock deals at prices higher than those under Gazprom’s long-term contracts.

According to independent expert Alexander Sobko, the force majeure declaration stems from Gazprom’s desire to escape penalties for the reduction of gas supplies, which have most likely fallen below compulsory contractual levels.

"If other parties go to court, lengthy judicial proceedings can be expected to take place, where the amount of gas supplied via Nord Stream will be compared to the capacities of gas compressor units, and the situation with the maintenance of turbines will be taken into account," the expert noted. He points out that in the winter of 2014-2015, when Gazprom sought to prevent the launch of reverse gas supplies to Ukraine, the company also reduced supplies below the contractual level and as a result, Gazprom actually paid a penalty for the gas-supply shortfall.

 

Izvestia: Will fighting climate change prevent unprecedented heat waves?

Europe is suffocating from an unprecedented heat wave and major forest fires. These abnormal temperatures have recently replaced soaring inflation and political crises on the front pages in the West. Meanwhile, such hot weather is becoming a normal phenomenon for Europe, Izvestia writes, citing experts.

"Today, we should view the situation at the beginning of the 21st century as the norm rather than that in the mid-20th century. More frequent and intensive heat waves are certainly the result of global warming. We need to adapt to it but we also need to combat it. The pledges that large countries made at the end of last year, with Russia vowing to become a carbon neutral nation by 2060, are crucial," Head of the Climate and Energy Program at WWF Russia Alexey Kokorin emphasized. According to him, although a gradual transition to carbon-free energy will not prevent future heat waves, it will reduce their scale.

However, Director of the All-Russian Institute of Nature Andrey Peshkov thinks otherwise. "The human role in polluting the environment is huge, but it’s very small in terms of climate change. There are natural changes in climatic conditions and the human contribution to the process is nonessential compared to geological factors. Combating what depends on nature instead of adapting to changes is a little bit like battling windmills," the expert noted.

According to him, 99% of all forest fires in Russia are caused by human activities rather than the climate factor, with more than half of the blazes triggered by arson. We need to combat these things "instead of blaming everything on climate," the environmentalist pointed out.

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