MOSCOW, October 23. /TASS/. The Cairo Peace Summit failed to produce a joint final declaration as representatives of 30 countries, the UN and the EU sought to find elusive common ground between Israel and Hamas to end the ongoing Middle East standoff; France is planning to provide air defense systems to Armenia, as Yerevan seeks out new defense partners; and Sofia’s surtax on transit of Russian gas is putting Bulgaria at odds with Serbia and Hungary. These stories topped Monday’s newspaper headlines across Russia.
Media: Cairo Peace Summit seeks to find elusive common ground between Israel, Hamas
Participants in the Cairo Peace Summit, dedicated to resolving the military conflict between Israel and Palestinian movement Hamas, failed to adopt a joint final declaration. Participating Arab countries called for an immediate ceasefire, while Western nations focused on the need to address the humanitarian problems facing Gaza Strip residents, Vedomosti writes.
The summit brought together representatives of 30 countries, the UN secretary general and the European Council president. Russia was represented by Deputy Foreign Minister Mikhail Bogdanov. However, Lebanon and Syria, Israel’s neighbors, were absent, as was Hamas ally Iran. According to Middle East expert Ruslan Suleimanov, the Egyptian authorities did not invite Iranian and Syrian officials, primarily in order to avoid annoying the US and Israel.
According to the expert, it was primarily an image-building initiative for Egypt aimed at increasing its global weight. Cairo also wanted to show that it remained a key player in the Arab world. Other participants, in Suleimanov’s words, did not expect a declaration to be adopted. "Everyone understands that it’s impossible to ease regional tensions without engaging the conflicting parties," he explained.
The Cairo summit took place amid Israel’s preparations for a ground operation in the Gaza Strip. Such an incursion could lead to huge civilian casualties, Igor Polyanchenko, head of the Department for International Cooperation at the State University of Management, told Izvestia. "Israel will try to cause as much damage to the Palestinians as possible, and it doesn’t seem to be selective in terms of targets," he explained.
Artyom Adrianov, researcher with the Institute for International Studies at the Moscow State Institute of International Relations (MGIMO University) and project manager at the Primakov Center for Foreign Policy Cooperation, believes that it is too early to talk about a peaceful solution to the conflict. "The current Israeli government would not have accepted such agreements even before Hamas attacked civilians, and, now, Israeli public opinion would not let it do so," he noted.
Vedomosti: France stepping in to provide air defense systems to Armenia
France will provide Armenia with weapons, including air defense systems, said French Defense Minister Sebastien Lecornu. After the relevant contracts are signed, which was planned to take place on October 22, Armenia will be able "to protect its skies," he added. This is not the first time that Yerevan has raised the issue of looking to Paris for military assistance, Vedomosti notes.
A short while ago, on September 28, the unrecognized Nagorno-Karabakh Republic (NKR) announced its self-dissolution effective January 1, 2024. The decision came as the result of Azerbaijan’s "counter-terrorism operation" in the region with Baku blaming Yerevan for violating the 2020 trilateral peace accords, which also involved Russia.
Armenia is currently facing serious defense challenges, which is prompting Yerevan to search for new security partners, said Vadim Mukhanov, head of the Caucasus Department at the Center for Post-Soviet Studies. An escalation of the Armenian-Azerbaijani conflict, which has expanded beyond Nagorno-Karabakh, is the reason. The Armenian government is interested in significantly enhancing the country’s defense capabilities so it comes as no surprise that Yerevan, disappointed with relations with Moscow, is now making a military and political pivot to the West, Mukhanov said.
Armenia has received French-made weapons in the past. Even before the Second Nagorno-Karabakh War in 2020, Greece had provided the French-made Milan anti-tank systems to the Armenian army, Center for Analysis of Strategies and Technologies Director Ruslan Pukhov noted. Given the high price of French weapons, this time around the discussions are focusing on the cheapest systems. They are most likely being purchased through a loan from French banks, Pukhov said.
Given its drift away from Russia, the Armenian leadership is clearly counting on building closer ties with France through weapons purchases. Yerevan believes that Paris may help it in its standoff with Azerbaijan, but such hopes may well prove to be in vain, the expert cautioned.
Izvestia: Russian gas supplies putting Bulgaria at odds with Serbia, Hungary
A gas scandal has broken out between Serbia and Hungary on one side and Bulgaria on the other. It was sparked when Sofia introduced a surtax on the transit of Russian gas supplies, thus causing outrage in Budapest and Belgrade, Izvestia writes.
The situation can be described as stemming from Bulgaria’s desire to make up for lost profit, St. Petersburg State University professor Natalya Yeryomina pointed out. She highlighted that the energy crisis has seriously affected the development potential of the Balkan country, where inflation is currently off the charts and the unemployment situation is pressing.
Bulgaria’s place in NATO’s system of military and political ties is more important now that Russia’s special military operation has changed the geopolitical environment. The Balkan country’s transport and logistics potential has increased, Yekaterina Entina, head of the Center for Black Sea and Mediterranean Studies at the Russian Academy of Sciences’ Institute of Europe, stressed.
In her view, the European Union and NATO are putting pressure on Sofia in order not just to shore up its pro-EU and pro-NATO positions but also to bolster the anti-Russian orientation of its domestic and foreign policies as much as possible. "It’s certainly a decision that comes from Brussels and Washington. This is a tool for putting indirect pressure on Serbia and Hungary," the expert said.
Entina assumed that Belgrade and Budapest would pay the surtax. However, it will affect end-user prices, boosting domestic inflation both in Serbia and Hungary. Clearly, the EU and NATO expect that a rise in end-user prices will make Belgrade and Budapest reduce their economic ties with Moscow, thus leading to a decline in Russian energy supplies, which will then have to be replaced by other sources, the expert noted.
RBC: Experts expect Central Bank of Russia to raise key rate once again
The Board of Directors of the Central Bank of Russia may raise the regulator’s key interest rate by 100 basis points, from 13% to 14%, at its October 27 meeting, said most participants in an RBC consensus forecast, which involved analysts from major banks and investment companies. Some of them are even expecting the regulator to take the rate as high as 15%.
Accelerating inflation is the main reason behind these expectations, although the ruble’s decline has not yet fully affected the inflation rate.
In September, inflation accelerated to the highest monthly rate recorded since April 2022, Olga Belenkaya, head of macroeconomic analysis at Finam, said. According to her, the Central Bank of Russia will raise the key rate to 14%. Any higher rate hike would increase the cost of public debt servicing and loans for corporate borrowers, affecting the financial stability of business.
"Rising inflation requires an increase in the key rate, which is what the regulator has repeatedly emphasized. The fact that the rate was raised by just one percentage point at the previous meeting increases the odds that there will be another rate rise this year," Georgy Vashchenko, deputy director of analytics at Freedom Finance, noted.
A 14% rise would not come as a surprise as market players have already priced it in, said Viktor Tunev, head of corporate business analytics at bank DOM.RF.
Expobank Chief Financial Officer Ernst Bekker, in turn, expects the rate to be increased to 15%. Sovcombank analyst Mikhail Vasilyev also does not rule out such a development. However, Vaschenko points out that raising the rate to 15% would be an extreme measure, only possible if inflation forecasts for the first quarter of 2024 deteriorate.
Vedomosti: Russia more than doubles metallurgical coal supplies to India
Russia’s export of coking (metallurgical) coal to India rose by 2.3-fold year on year in the first eight months of 2023 to 4.3 mln metric tons, Vedomosti writes, citing data from the Indian Ministry of Commerce and Industry. Russia’s share in the South Asian country’s coking coal imports grew from 5% to 11.2%.
Russian coal exports began to rise sharply last year as companies redirected export flows away from markets in the sanctions-happy and coal-shy European Union. The EU banned Russian coal imports starting on August 10, 2022, as part of its fifth package of sanctions on Moscow due to the special military operation in Ukraine.
The Yakov and Partners consulting firm (formerly McKinsey Russia) expects India to become the main consumer of Russian metallurgical coal in the long term. In particular, according to the consultancy’s estimates, over 60% of exports will be directed to India.
Boris Krasnozhyonov, head of security market analysis at Alfa-Bank, points out that the global market is experiencing a shortage of high-quality metallurgical coal grades. India is the main purchaser of premium coking coal because steel production and consumption are rapidly growing in the country, Krasnozhyonov said. India, in his words, is actively searching for an alternative to Australian coal supplies, so its demand for Russian coal will keep increasing.
The current prices in the global market and the ruble’s decline against the dollar guarantee the high profitability rates of Russian export companies, experts say. Global coal prices will continue to grow amid declining Australian exports, Akhmed Aliyev, an analyst at BCS World of Investment, added. However, cost reduction remains an important goal for Russian coal producers, Dmitry Baranov, leading expert at Finam Management, noted. It will allow them to significantly strengthen their position in the global market in the future, he explained.
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