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Press review: Erdogan keeps power with runoff win and Biden, GOP cut deal, skirt default

Top stories from the Russian press on Monday, May 29th

MOSCOW, May 29. /TASS/. Erdogan wins re-election in Turkey’s second-round runoff election; Biden and McCarthy skirt default, agree on a deal to raise the US debt ceiling; and Russia learning from combat experience to adjust tactics in Ukraine. These stories topped Monday’s newspaper headlines across Russia.


Media: Erdogan re-elected in Turkey, places first in second round to stay in power

Incumbent Turkish President Recep Tayyip Erdogan edged out opposition challenger Kemal Kilicdaroglu by a margin of 4% to win the second-round runoff election. Even as the opposition had a historic opportunity to take power, Erdogan, who has ruled as prime minister or president for 20 years already, managed to pull out a win after a fierce fight. The expert community thinks that Erdogan received a significant boost from enormous media resources as well as his rival’s lack of charisma. The election results also mean that Ankara’s foreign policy will not undergo any serious changes, including on the Russian track.

Turkey specialist Yury Mavashev told Kommersant that no sudden changes should have been expected in any event as regards Ankara’s relations with Russia. However, the incumbent’s victory automatically guarantees that the previous level of bilateral ties will be retained, at least at first. "Erdogan wouldn’t have been able to begin with a clean slate anyway given that, just in time for the election, the Kremlin literally gifted him with the grain deal and a resolution of the Karabakh issue. Now it’s time [for him] to pay the bill for that. Additionally, Turkey and Russia have agreements on energy that extend for years into the future. However, on the Ukrainian track there may be many unpleasant surprises for the Russian side. Military and technical cooperation between Ankara and Kiev has been established and, of course, nobody is going to pull the plug on it. And another surprise, which is actually no surprise at all, will be Ankara ultimately giving its consent to the expansion of NATO to include Sweden. While Kilicdaroglu promised to support the [North Atlantic Alliance’s] expansion, it will be Erdogan who actually extends such support," the expert concluded.

Erdogan’s re-election was in large part brought about by the incumbent’s aggressive rhetoric toward his opponents, Eastern studies scholar Ruslan Suleymanov told Vedomosti. "The propaganda effect played its role. One must understand that about 90% of all media outlets in Turkey belong to Erdogan’s inner circle. Through them, the president promoted his agenda to voters and actively exploited the threat of terrorism in the country in the event of an opposition win," the expert noted.

That said, such fiery rhetoric was not typical of Erdogan in the past, says Ikbal Durre, associate professor at Moscow State Linguistic University. "He came to power vowing to resolve the Kurdish issue, which had an effect. Now, on the wave of anti-Kurdish attitudes he used the opposition’s cooperation with the Kurds against it," the expert noted.

According to Suleymanov, Erdogan could potentially revive the process of amending the current constitution to give himself even greater powers. At the same time, social and economic problems continue to deepen in Turkey, the expert noted. "During his campaign, Erdogan did not talk much about the economy; this is an issue where he has not presented a well-thought-out program. And now he has nothing to offer. I think, in the future, the economic crisis will lead to political instability. Even with all of its extensive powers, the position of the leadership will prove to be rather shaky," the expert concluded.


Vedomosti: Biden, McCarthy agree to raise debt ceiling for next two years to avoid default

Kevin McCarthy, Speaker of the US House of Representatives, after a phone conversation with US President Joe Biden announced on the evening of May 27 local time that he had reached an agreement in principle with the White House on preventing a US default. It was expected that the text of the debt ceiling agreement would be ready by May 28, and the House of Representatives would most likely vote on it on May 31. According to McCarthy, the agreement provides for "historic reductions in spending" and "reforms that will lift people out of poverty."

McCarthy and the Republican opposition achieved their desired scenario for the further course of talks on raising the debt ceiling, said Russian International Affairs Council expert Alexey Naumov. Initially, Biden wanted to raise it without any preconditions and only then discuss the spending reductions while the Republicans rejected this path, the expert reiterates. According to him, the Republicans wanted to prolong the debt ceiling standoff as long as possible in order to show that Biden is impossible to negotiate with and cannot ensure competent governance while, at the same time, avoiding any blame themselves for triggering a default given the harm such an outcome would cause ordinary American working families. Therefore, the expert thinks that while Biden may have lost the standoff, the Republicans failed to obtain everything they wanted, although Naumov does not foresee any serious repercussions for McCarthy as a result.

Vladimir Vasilyev, senior research fellow at the Institute for US and Canadian Studies, notes that after this agreement has been reached, the critical situation in the US will move from the financial and economic realm to the political and legal sphere. The country has overcome the crisis of a looming default, but the political fallout from the deal may be quite serious. According to the expert, Biden and the Democrats outmaneuvered McCarthy and the Republicans because the ceiling is raised for two years at a time, or, in this case, until after the next presidential election would have already taken place, which was the Democrats’ main idea. The amount of the intended increase in the debt ceiling has not yet been disclosed, but there is information that it may be up to $4 trln, meaning that other budget cuts would mainly be cosmetic.

The expert thinks that the increase in the debt ceiling will be easily approved by the Senate, while in the House of Representatives a bipartisan majority will vote for the document. Some Republicans may not support McCarthy, but Democrats will make up for their votes. In Vasilyev’s opinion, McCarthy’s speakership in the lower house is now under threat because he could not achieve the acceptance of the terms he has previously been pushing. Biden may also suffer some damage because he strengthened his position from the point of view of Democrats overall, but not with the party’s powerful left wing due to the agreed restrictions on social welfare for the most disadvantaged social classes combined with a simultaneous increase of the military budget, the expert concludes.


Nezavisimaya Gazeta: Russia learns from combat experience, ramps up strikes on Ukraine

Russia continues nighttime air and rocket strikes on Ukraine. Overnight on Sunday, the most massive strike on Kiev since the onset of the special military operation was delivered by several waves of strike drones. According to Ukraine’s air force, 54 kamikaze drones were launched at the capital. There were no official reports as to which military targets were hit. These attacks can be viewed as Russia’s strikes on the adversary’s decision-making centers given the Kiev regime’s announced readiness to launch a counteroffensive.

Media outlets are discussing a report by military experts at the UK’s Royal United Services Institute (RUSI). The study, titled "Russian Tactics in the Second Year of Its Invasion of Ukraine," is devoted to the adaptation of Russian troops and arms to combat. It is reported that the Russian army has learned some lessons and made significant improvements in a number of areas. The analysts note that this is seen in the way combat is organized without wide advances detached from the rear and in the use of artillery where shells are being used more rationally and precisely, as well as in the more efficient use of electronic warfare systems, aviation, tank defenses, engineering construction, communications and other areas.

The authors of the RUSI report conclude that in the long-term perspective, the biggest threat for Ukraine is the situation where some third country provides Russia with the opportunity to create additional industrial capacities to produce munitions. "In other words, military aid to Russia on the part of, say, China, scares the British more than anything," concludes political scientist and former Verkhovna Rada (Ukrainian parliament) member Oleg Tsarev.


Kommersant: LNG supplies may reroute to Asia after prices plummet in Europe

The sharp drop in gas prices in Europe seen last week triggered a substantial Asian "premium" on the LNG market for the first time since late January. If this trend persists, a portion of spot deliveries may be redirected to Asia, which could serve to gradually stabilize European prices. However, demand for gas in Asia remains undefined: China is not increasing purchases of spot LNG this year while other developing Asian countries, such as India, Bangladesh and Pakistan, will boost their imports only if prices drop further.

Michal Meidan of the Oxford Institute for Energy Studies (OIES) thinks that Chinese traders may increase spot purchases to fill up storage facilities before winter, given China’s plans to double the volume of underground gas storage by 2025. However, the prices should be sufficiently low while Chinese companies have the opportunity to cover practically all of their needs with long-term contracts as well as supplies not delivered in 2022. The expert thinks that a sudden deficit may emerge in the summer or before the winter season, which would trigger short-term spot LNG purchases.

However, so far, demand for gas both in Europe and Asia remains weak and it is not quite clear how low the prices should drop in order to stimulate consumption after the 2022 price shock. That said, exports remain highly profitable for US LNG plants, thanks to plummeting domestic gas prices.


Izvestia: Russia planning to draw up rules for crypto-exchanges

Russia plans to develop rules for setting up and operating a crypto-exchange instead of creating a national crypto-exchange, Anatoly Aksakov, chairman of the State Duma Committee on Financial Markets, told Izvestia.

The lawmaker explained that crypto-exchanges will be used for cross-border transactions. According to him, it is possible that the Central Bank of Russia will have regulatory oversight of their operations, while the rules will be established in a bill on experimental legal regimes.

Ivan Chebeskov, head of the financial policy department at the Finance Ministry, told Izvestia that the ministry is proposing to regulate digital currencies comprehensively by finding a compromise with the Central Bank through creating a legal framework for crypto mining and making it possible to conduct international transactions and exchanges with cryptocurrency within the framework of an experimental legal regime.

Alexey Guznov, deputy governor of the Central Bank of Russia, told the newspaper that, in the future, crypto-exchanges will facilitate interactions between exporters and importers and cross-border payments in digital currencies. For example, Russian companies may use them to pay for parallel imports.

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