Russian individuals and entities that were hit by the European Union’s sanctions have just over three weeks left to declare their European assets. According to recent adjustments to the sanctions mechanism, if the EU discovers this property, it will be confiscated, Izvestia writes. Russian officials believe that this tough measure will only complicate the troubled relations between Moscow and Brussels. According to the Federation Council (upper house), after such moves Russia could "just lose trust" in Europe.
With the seventh round of sanctions that the European Union imposed on July 21, Brussels amended EU Council Regulation No. 269/2014. According to the updated document, the blacklisted individuals are required to provide information about their European assets (bank accounts, real estate, production means, transportation, etc.) to the competent EU authorities, Director of Programs at the Russian International Affairs Council Ivan Timofeev told Izvestia.
Those who are already under sanctions have to comply with the measure until September 1, 2022; those who are expected to be placed on the blacklist by Brussels must do so within six weeks.
"Not everyone has property in the EU. However, for others, the amount of assets may be enormous, and attempts to confiscate or prosecute will undoubtedly trigger new political tensions," Timofeev noted.
The Russian authorities consider that any confiscation will only worsen Russia-EU relations, Izvestia writes. Vladimir Dzhabarov, First Deputy Chair of the Federation Council Committee on Foreign Affairs, told the newspaper that Russia may also seize EU countries' property. "But I think it's a dead end. I am deeply disappointed that the Europeans have proved to be dishonorable partners," he told the newspaper.
Russian President Vladimir Putin met with his Turkish counterpart Recep Tayyip Erdogan in Sochi on August 5, where the two leaders agreed to boost bilateral trade. Erdogan declared that Russian-Turkish relations had reached a new level. According to a joint statement issued following the meeting, the presidents underlined their shared desire to further expand relations. The deepening of economic ties between the two countries is raising alarm bells in the West and may result in sanctions against Turkey, Vedomosti writes.
According to the Financial Times, Western leaders have threatened Ankara with sanctions if it helps Russia to evade restrictions. A source in Western governments told the newspaper that the measures could begin with informal directives to Western banks and financial institutions to reduce financial dealings with Turkish counterparts.
It will be "extremely stupid" if the United States and its allies decide to impose sanctions on Ankara, editor-in-chief of Russia in Global Affairs magazine Fyodor Lukyanov told Vedomosti. Turkey pursues an independent policy and prioritizes its interests, which include maintaining constructive relations with everyone: Russia, Ukraine, and the West. This position enables Ankara to do things that no other country can, such as act as an intermediary in settling the issue of Ukrainian grain exports, according to the expert.
Turkey serves as an important logistics hub for Russia, which is one of the reasons for the nations' increased turnover, Director of Programs at the Russian International Affairs Council Ivan Timofeev said. Turkish companies are actively exploring the space left by Western businesses who have exited the Russian market. Secondary sanctions on Turkey, according to Timofeev, will not have any substantial impact - Ankara may just create special enterprises and legal entities to do business with Russia, thus the US banning them would have little effect, the expert noted.
The Israeli Operation Breaking Dawn in the Gaza Strip is due to be discussed at the UN Security Council meeting on August 8. The military campaign undertaken against the Palestinian Islamic Jihad (PIJ) group's leadership and infrastructure has exposed its contradictions with the Hamas movement, which officially controls the coastal enclave. According to Nezavisimaya Gazeta, the movement's leadership was not ready to instantly join the missile strikes against the Jewish state's territory, which was presumably what Israel was hoping for.
According to the newspaper, one of the goals of the Israeli operation, which, as local analysts pointed out, purposefully left out locations in the Hamas area of responsibility, was to increase divisions within the Palestinian resistance.
"It's difficult to determine how calibrated Israel's current operation is and whether it factors in the medium-term horizon," non-resident researcher at the Washington-based Middle East Institute (MEI), expert at the Russian International Affairs Council Anton Mardasov told the newspaper. "On the one hand, it is associated with pre-emptive attacks in the lack of strategic depth of defense, because the PIJ proclaimed for the first time it was ready to avenge the arrest of the group's leader in the West Bank, Bassem al-Saadi. It also fits into a plan of dividing the PIJ and Hamas in the face of their reliance on Iran," the expert pointed out.
Given the age of Palestinian Authority President Mahmoud Abbas, the analyst believes that the intention to exacerbate divisions between factions could lead to turmoil in the West Bank and the Gaza Strip, with unpredicted repercussions.
"In this respect, Israel's testing of Hamas' resolve and actions with an eye to Tehran appears to be a delicate game, but it still remains exceedingly dangerous, given that Hamas and Iran cannot simply look at the suppression of pockets of resistance within a common front indefinitely," the expert summed up.
With exactly three months until the US midterm elections, President Joe Biden's approval ratings remain poor, affecting the Democratic Party's prospects. According to the most recent polls, support for the president’s performance ranges between 38-40%. Meanwhile, only 16-26% of Americans believe the country is heading in the right direction. The situation could result in the Democrats losing control of the House of Representatives and Republicans winning back the Senate. Although the situation might evolve in any direction, experts told Kommersant.
In November, all 435 House of Representatives seats and 34 Senate seats will be open for election. Given that the Democratic Party now controls both the legislative and executive branches of government, any ratings of the president, Congress, or the country's overall direction benefit Republicans, Kommersant writes.
Only 17% of US citizens believe the country is heading in the right direction, a recent Reuters/Ipsos poll showed. According to a Politico/Morning Consult poll, 26% of Americans believe so, while 70% say the political route is flawed. In the Reuters/Ipsos study, this figure reached 74%.
Anders Aslund, a professor at Georgetown University in Washington, told Kommersant that historically high inflation will be the crucial issue in the current campaign. The president will be blamed for this, even if the groundwork was laid by the Trump administration and bipartisan tax stimulus policies, he said. According to the analyst, everything is pointing to Republicans gaining control of the House of Representatives, while the future of the Senate is less certain. The recent scandalous decisions of the US Supreme Court, dominated by conservatives, on abortion restrictions and gun ownership liberalization may swing the sentiment in favor of Democrats.
Russia's opening of the derivatives market to non-residents from friendly nations on August 8 will not raise the volatility of Russian indices, analysts interviewed by Izvestia believe. Earlier it was assumed that "friendly" foreigners would be also able to trade on the stock market from this Monday. However, in the evening of August 5, the Moscow Exchange postponed the opening of access to the stock market indefinitely. When this happens, the Russian stock market may plummet. However, economists anticipate that the decline will be temporary, and that the Moscow Exchange index will hit 2,500 points by the end of September.
Meanwhile, the ruble exchange rate’s dynamics will be determined by foreign investors' decisions to sell it or buy. According to market expectations, the ruble will fluctuate slightly around 65 rubles per dollar in the following months.
If the exchange opened for non-resident investors on August 8 under the previously announced terms, there could be a situational decrease in the value of assets, the founder of Anderida Financial Group Alexey Tarapovsky told Izvestia. However, any significant changes in the volatility should not be expected from opening the derivatives market alone, he believes. Access to further segments may be opened after seeing the reaction of the derivatives market, Associate Professor at the Plekhanov Russian University of Economics Denis Domaschenko said.
"A brief rise in market volatility cannot be ruled out. Not so much because of the actions of the non-residents themselves, but against the background of a speculative game on the expectations of this event," leading analyst at Freedom Finance Global Georgy Vashchenko told the newspaper.
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