MOSCOW, June 14. /TASS/. Upcoming NATO summit may be critical turning point for Ukraine crisis; the EU tries again to approve latest anti-Russian sanctions package; and Iranian president kicks off inaugural Latin America tour in Venezuela. These stories topped Wednesday’s newspaper headlines across Russia.
Izvestia: How NATO’s upcoming summit may prove pivotal for Ukrainian crisis
Talk is increasing in the West that Ukraine must score some successes in its counteroffensive before the next NATO summit in July. Otherwise, military and financial support for Kiev may start to shrink, Izvestia writes.
The annual NATO summit will take place in the Lithuanian capital of Vilnius on July 11-12. For the past several years, Kiev has been demanding clear-cut decisions from the bloc, primarily regarding Ukraine's accession to the North Atlantic Alliance. In response, however, Kiev has received only fulsome assurances that support would continue "for as long as it takes." But, as for NATO membership itself, that issue would not be discussed until Ukraine "wins."
Notably, fully 45.3% of the "collective" assistance to Ukraine overall comes from the United States. However, the problem for the White House is that it is running out of time. The US presidential election campaign has now begun in earnest and incumbent President Joe Biden is the only one of the four main candidates from the two major parties who insists that Washington must continue to lend full support to Kiev.
The more funds are allocated without producing the desired results, the less value the Ukrainian project will have for the Americans, Viktoria Zhuravlyova, head of the Center for North American Studies at the Russian Academy of Sciences’ Institute of World Economy and International Relations (IMEMO RAN), pointed out. "Next year, Biden will have to show successes. Even today, it’s rather hard to paint the situation as a foreign policy victory, which is why there is so much talk about the West’s unity and the United States’ leading role in the process. Still, it’s not enough to outweigh domestic political problems," the expert noted.
If the Ukrainian armed forces fail on the battlefield, Washington will face a limited menu of options to choose from, said Vladimir Vasilyev, senior research fellow at the Institute for US and Canadian Studies. "The first option is to start a domestic debate on ways to reformat the conflict that distracts from the containment of China, while military assistance is ineffective. The second way out is to try to shift the narrative to downplay Kiev’s failures in a certain sense. Additionally, there is always the possibility of making the current Ukrainian leadership out to be a scapegoat. As for the US political class, it has the option of ‘sacrificing’ the Biden administration, especially since grounds to do so are readily available," the expert stressed.
That said, the Vilnius summit, which will be taking place a month after the upsurge in active military operations, will not only indicate the level of future support for the Kiev regime, but will also shed light on the viability of the European security project that favors freezing the conflict immediately or as soon as possible. But, the strategic goals that Russia seeks to achieve in the conflict are another question altogether. According to President Vladimir Putin, they have not changed.
Izvestia: EU tries once again to approve latest anti-Russian sanctions package
On June 14, the European Union will once again try to adopt its 11th package of sanctions on Russia, which failed to gain the required unanimous approval of all 27 member states last week due to opposition from Hungary and Greece. The two countries are unhappy about the blacklisting of some of their companies. Brussels intends to blacklist a total of 90 entities for allegedly assisting Russia in bypassing Western restrictions. However, experts have no doubt that the package will ultimately be agreed upon, albeit with concessions to Budapest and Athens, Izvestia notes.
The main goal of the 11th package is not to introduce any new restrictions but rather to strengthen enforcement of and compliance with existing ones. Brussels’ key goal is to obstruct the governments of third countries from helping Russia. Still, European diplomats are concerned that the mechanism may turn out to be so streamlined that it will prove difficult to put into practice. Europe also worries that new sanctions against Russia, based on the extraterritoriality of EU rules, will only serve as an additional irritant in the EU’s relations with those countries to be targeted by specific measures, and could also push some nations toward pursuing further rapprochement with Russia.
However, the new package is certain to be approved even if Brussels has to make concessions to Budapest and Athens because this is the logic of the sanctions mechanism, Sergey Shein, a researcher at the Center for Comprehensive European and International Studies of the Higher School of Economics (HSE University), pointed out. "As for the policy of ever-tightening sanctions, the key thing is to keep things in motion, pursue the same course and adopt more restrictions. Bargaining about specific companies is a technical aspect, while Brussels is determined to adopt the package one way or another, even though European officials will probably have to yield to the demands of Hungary and Greece," Shein noted.
In the meantime, the current situation makes it clear that it will prove increasingly difficult to agree upon new packages of restrictions on Russia because any further sanctions could already touch upon areas that are quite sensitive for certain EU members. Experts admit that the European Union still has room for maneuver, which includes the nuclear energy sector and the diamond industry, among others, but such sanctions would not be painless for all EU members.
Media: Iranian president begins Latin American tour in Venezuela
Venezuela and Iran signed a number of memorandums pertaining to mining operations, the petrochemical industry, transport and agriculture on June 13 during Iranian President Ebrahim Raisi’s first tour of Latin America, Vedomosti writes.
Tehran believes that the Iranian president’s trip is in line with the "positive" trend in its relations with the countries of the region. Raisi is also expected to visit Cuba and Nicaragua.
"Raisi’s tour should be viewed as part of a negotiation process between countries under sanctions, and there are so many of them now that they can form some economic association. However, the US has signaled that the Venezuelan government’s talks with the opposition may pave the way for another easing of sanctions or their lifting altogether. Washington may seek to tap the country as a backup source of oil supplies if relations with Saudi Arabia sour," Otkritie Investment analyst Alexey Kokin pointed out.
Meanwhile, Venezuela could benefit from Iran’s experience in bypassing sanctions. Tehran cannot offer technologies suited to Venezuela’s heavy and extra-heavy oil, but it does have a large tanker fleet that could help Caracas boost export activities, St. Petersburg State University Professor Viktor Kheifets explained. According to him, the oil production situation in the South American country remains difficult not just because of sanctions but also due to the military’s inefficient management of the industry.
"Raisi’s trip could have more of a political meaning as dealing with heavy Venezuelan oil does not require high-level visits. However, both countries need to communicate," Andrey Shchelchkov, chief researcher with the Center of Latin American Studies at the Russian Academy of Sciences’ Institute of World History, told Nezavisimaya Gazeta. "The Iranians aren’t actually capable of properly upgrading Venezuela’s oil industry, which would in any case require bringing in Western oil majors. Still, the US company Chevron, for instance, is unwilling to do anything despite having a license. Meanwhile, there are opportunities for private companies, namely from the Iranian food industry," the expert added.
Vedomosti: Russia stands to become attractive new jurisdiction for crypto investors
The capitalization of the crypto currency market fell and all top 10 crypto currencies except stablecoin plunged after the US Securities and Exchange Commission (SEC) filed lawsuits against the world’s largest crypto exchange, Binance, and the Coinbase cryptocurrency exchange platform, Vedomosti writes.
The SEC’s main claim against the crypto exchanges concerns the trading of securities without the necessary licenses from the US regulator. According to SEC Chair Gary Gensler, the US financial markets regulator views almost all cryptocurrencies except bitcoin as securities.
The SEC is now working consistently to bring the crypto industry under domestic laws as it is fighting hard to block any potential rivals to the US dollar that the regulator cannot control because of their decentralized nature, said BitRiver Government Relations Director Oleg Ogiyenko. The outcome of the SEC’s lawsuits will be a signal for all crypto companies around the world. However, progress cannot be stopped as distributed ledger technology has really become an element of the financial system; only the center of attraction for the crypto world may now shift to other parts of the globe.
US regulators are making a mistake because many exchanges will likely search for new jurisdictions, Alexander Brazhnikov, executive director of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (RACIB), emphasized.
Russia offers competitive advantages for developing crypto, primarily the bitcoin mining industry, Ogiyenko stressed. He says that the situation in the US market is only increasing Russia’s chances of leadership in the digital economy through the harmonious use of blockchain technologies in the financial system. However, taking advantage of this opportunity requires balancing the rules of crypto currency mining and circulation, the expert said.
Media: Russian currency tumbles to year-to-date low on market pressures
The Russian ruble fell sharply against the US dollar and the euro after the long June 12 holiday weekend. Moreover, the dollar has risen to a level not recorded in over a year. The ruble is being pressured by an imbalance in the currency market, oil prices and expectations for the US Federal Reserve’s next meeting on interest rates, Rossiyskaya Gazeta writes.
"The main driver of the ruble’s decline is the imbalance created by the insufficient inflow of foreign currency to the market. It is due to a decrease in export revenues because of rather low oil and gas prices," said Dmitry Babin, a stock market expert at BCS World of Investment.
"Wednesday’s meeting of the US Federal Reserve will be the main event of the week for global markets. We expect the US regulator to keep the key dollar rate at the current level of 5.25% and send a signal that it may be raised later in the year. If the Federal Reserve uses tougher rhetoric, the dollar may strengthen in global markets, putting pressure on commodity prices and the ruble," Sovcombank Chief Analyst Mikhail Vasilyev pointed out.
Head of Economics and Sector Research at Promsvyazbank Yevgeny Loktyukhov, in turn, told Kommersant that currency market developments could be due to demand from importers and increased activities by private investors, seeking to make up for high volatility in the oil market.
Demand for the US currency could have also increased among those foreign companies that are exiting Russia. "Although most major non-residents have already withdrawn from Russian projects, smaller companies are now undergoing the process," Head of Analytics at Zenit Bank Vladimir Yevstifeyev noted.
Given the situation in the market, the ruble may continue to weaken but more slowly, analysts say. According to Yevstifeyev, the trend may change either if there is profit taking on speculative positions or when exporters start to actively convert foreign exchange earnings at a favorable rate.
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