MOSCOW, May 2. /TASS/. The West continues to stubbornly stonewall Russia’s calls for an international investigation into the sabotage of the Nord Stream gas pipelines; the eviction of the Russian embassy school in Warsaw further fuels tensions between Russia and Poland; and Putin greenlights oil exports to friendly countries at lower-than-cap prices. These stories topped Tuesday’s newspaper headlines across Russia.
Izvestia: West stubbornly stonewalling Russia’s calls for international Nord Stream probe
The European Union will not launch its own separate investigation into the acts of sabotage on the Nord Stream gas pipelines, officials from the European Union and the European Commission told Izvestia. They pointed out that Germany, Denmark and Sweden were already conducting their own respective national probes to establish the facts surrounding the incident. Russia has repeatedly called for an international investigation into the acts of sabotage against the pipelines but, thus far, the West has been studiously ignoring Moscow’s efforts to play its role in the process of clarifying what and who caused the explosions.
Vilibor Sincic, representative of Croatia in the European Parliament’s Delegation to the EU-Russia Parliamentary Cooperation Committee (D-RU), noted that the national investigations were facing a certain level of criticism in Europe. A number of European Parliament members have more than once demanded that centralized efforts be made to determine what happened at the Nord Stream pipelines, but the European establishment is unlikely to approve the creation of an investigative committee or a fact-finding mission, and no such initiatives have been discussed, Sincic added.
A similar view is shared by Gunnar Beck, a European Parliament member from Germany. According to him, there is no chance that the European Parliament or any other European Union institution will launch its own investigation. Beck pointed out that everyone knows who was behind the acts of sabotage - and it was not Russia for sure - but virtually no one has the courage to say it out loud.
In the meantime, the West has been doing its best to prevent Russia from joining the ongoing probes or to initiate an international investigation. In particular, in March the United Nations Security Council failed to pass Russia’s draft resolution on establishing an international commission. Denmark, in turn, has been impeding Russia’s efforts to join the process of establishing the precise circumstances of the blasts.
Kommersant: Embassy school row further enflames already tense ties between Russia, Poland
Moscow has threatened "consequences for the Polish authorities and Poland’s interests in Russia" following the eviction of the Russian embassy’s school in Warsaw from its premises. It appears that Moscow will refrain from taking extreme measures at this point, but the diplomatic war promises only to get worse, Kommersant writes.
On April 29, bailiffs, accompanied by police, arrived at the school building, where 29 people, including students, were present at the time. The Russians were given until 6:00 p.m. to leave the premises and were also given permission to remove the school’s equipment within a week. Russian Ambassador to Warsaw Sergey Andreyev said that the bailiff service had demanded some time ago that the building be vacated by April 29. Anticipating such a scenario, the diplomatic mission had been seeking alternative premises to which to relocate the school.
The diplomatic dispute over the legal status of Russia’s property has been going on for decades. The Polish authorities claim that, for years, Russia has been avoiding paying rent and returning the property based on court rulings. Moscow, in turn, considers the relevant decisions to be unlawful. Experts point out that the dispute had been smoldering at a low flame up until Russia sent troops into Ukraine in 2022, which is when Poland began to force the issue, and also froze the Russian embassy’s bank accounts. In April 2022, the Warsaw mayor’s office seized a residential building built for the families of Russian diplomats in the 1970s, which had been dormant for some time. In November 2022, Poland’s Ministry of Climate and Environment announced that the Russian embassy’s holiday camp near Warsaw had been seized for failure to pay rent. The ambassador in turn explained that the embassy had stopped paying rent after its account had been frozen.
Experts believe that the recent step by the Polish authorities is not being driven by the need for optics for Poland’s incipient election campaign because both the ruling Law and Justice (PiS) party and its opponents from the Civic Coalition have supported the "seizure" of the school building. "It is nothing but a political gesture related to Russia’s special operation and it was expected to draw a backlash from Moscow," a source with a finger on the pulse of power in Warsaw told the newspaper.
Polish media outlets note that this is not the end. There are at least three more buildings illegally occupied by Russia, Aleksandra Gajewska, member of the Polish Sejm, or lower house of parliament, representing the Civic Coalition, claimed. Moscow is likely to take retaliatory measures in response to each such step, and so the diplomatic war will not end with the school incident.
Vedomosti: Putin greenlights oil exports to friendly countries at lower-than-cap prices
Russian President Vladimir Putin has amended his December decree prohibiting Russian exporters from selling oil and oil products based on contracts that link prices to the cap established by the G7 and the European Union. Contracts for oil exports to friendly countries made before February 1, 2023, have been excluded from the ban, Vedomosti notes.
A number of Western countries tightened sanctions against Moscow in 2022 due to Russia’s special military operation in Ukraine. The EU introduced an embargo on Russian seaborne oil exports, effective December 5, 2022. A $60 per barrel price cap on Russian oil took effect simultaneously. The limit was initially approved by the G7 nations, which were later joined by other EU member states, some other European countries and Australia. Similar measures against oil products took effect on February 5. Putin’s decree banning Russian exporters from supplying oil and oil products based on contracts linked to the price cap took effect on February 1.
Sanctions have compelled Russian oil producers to start building new logistics chains. As a result, India and China emerged as the biggest buyers of Russian oil last year. The two countries purchase Russian oil at an unofficial price discount to global benchmark Brent, although there is no actual reference to the price cap.
Igor Yushkov, leading analyst at the National Energy Security Fund, explains that the updated presidential decree now enables exporting oil and oil products to friendly countries even if the relevant contracts are linked to the price cap, provided that they were concluded before February 1, 2023. The analyst believes that the measure may primarily pertain to oil exports to India.
"The Indian authorities may have asked Russia to provide some sort of evidence that a given [Indian] company was not in violation of sanctions. A contract that mentions the price cap could serve as such proof," the expert assumed.
Vedomosti: EU, Eastern European countries reach agreement on Ukrainian grain transit
The European Commission has reached an agreement "in principle" with five Eastern European nations to unblock the transit of grain exports from Ukraine. The move comes in exchange for the payment of another 100 mln euros in compensation to the five countries’ farmers. The EC will also assess the damage that European producers have suffered from unrestricted imports of Ukrainian food products, Vedomosti writes.
In late 2022, Eastern European governments began complaining about the inflow of Ukrainian grain that was being imported above quota levels and other European limitations. Poland was the first Eastern European EU member to ban, on April 15, both the transit and import of agricultural goods from Ukraine (Kiev managed to agree with Warsaw, however, to unblock transit routes by April 18). Romania, Hungary, Slovakia and Bulgaria also banned imports from Ukraine but allowed the transit of Ukrainian food products by April 19.
The agreement reached on Ukrainian grain transit makes it clear that the Eastern European nations will not miss the opportunity to use the situation to their political and economic advantage despite their declarations of unconditional support for Ukraine, said Artyom Sokolov, a researcher with the European Studies Institute at Moscow State Institute of International Relations (MGIMO University). According to him, the issue has actually exposed a standoff between the European bureaucracy in Brussels and the Eastern European national governments in their respective capitals. For now, it is possible to talk about a temporary compromise, but the struggle will continue.
The issue of grain supplies to global markets was triggered by hidden anti-Russian sanctions targeting the agricultural sector, Eduard Zernin, chairman of the Russian Union of Grain Exporters, pointed out. "The situation has largely stabilized as Russian exports are in fact back on the market and prices have returned to their pre-crisis levels. Global demand has generally dropped, while major exporters are accumulating grain stocks, relying on them as a reserve," the expert explained.
Izvestia: Cash volume in Russia rises to record high level
The volume of cash in circulation in Russia increased to the record high level of 16.7 trillion rubles ($208 bln) in the first quarter of the year. The Association of Russian Banks explained that the rise was due to the public funding allocated for the country’s new regions, inflation and the overall mood of the population. However, the sharp jump in the volume of cash in consumers’ pockets will not trigger a general rise in prices, said experts interviewed by Izvestia.
One of the main reasons behind the increase in the cash volume is the need to provide the necessary amount of rubles to the four regions that joined Russia in 2022, said Alexey Voilukov, vice president of the Association of Russian Banks. Organizing payment processes will require at least 900 bln rubles in cash ($111 bln), analysts said earlier. Other reasons include inflation and a rise in people’s overall level of anxiety, which has pushed them to adopt a savings-oriented model of behavior, preferring to keep money in cash at home. Additionally, demand for the national currency has grown amid a rise in dollar and euro exchange rates.
In theory, the increasing volume of physical money may serve to accelerate inflation, Natalia Bogomolova, a bank ratings analyst at the National Rating Agency (NRA), pointed out. However, the current economic uncertainty is affecting consumers’ willingness to make major purchases, so pressure on inflation is turning out to be not that strong.
The money supply went up in Russia in the past year because of the banking sector’s lending to the economy, Freedom Finance Global analyst Vladimir Chernov explained. In addition, budgetary spending increased in early 2023 following increases in the national minimum wage, pensions and social benefits. Still, the expert expects cash volume growth rates to decline in the coming months.
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