MOSCOW, November 8. /TASS/. Russia has formally withdrawn from the Conventional Armed Forces in Europe (CFE) Treaty; the EU’s executive branch may approve commencing membership accession talks with Ukraine; and Moscow is set to oppose designating Hamas and Hezbollah as terrorist organizations at the UN. These stories topped Wednesday’s newspaper headlines across Russia.

 

Vedomosti: Russia finalizes withdrawal from CFE Treaty, which West never actually ratified

Russia formally withdrew from the Treaty on Conventional Armed Forces in Europe (CFE), the validity of which Moscow suspended in 2007. "Russia bids farewell to the CFE Treaty without any regret and with full confidence that it is in the right," the Russian Foreign Ministry said in a press release as it gave its assurances that it would build on the experience, both positive and negative, gained during the creation and implementation of the document.

According to Russia’s diplomatic agency, given NATO’s direct responsibility for igniting the Ukraine conflict as well as the admission of Finland to the North Atlantic Alliance and the process of considering Sweden’s NATO bid, "even the formal preservation of the CFE Treaty has become irrelevant in terms of Russia’s key security interests."

Russia suspended its participation in the CFE long ago, and thus the current withdrawal merely represents the formal de jure settlement of the longstanding de facto situation, Andrey Kortunov, research director at the Russian International Affairs Council, said. He added that, by formally withdrawing from the CFE, Russia has pulled out of a treaty that was never even ratified by the West.

Moreover, it will not be possible to revive the CFE Treaty, as the material base of weapons has changed dramatically in Europe. According to the expert, there are now almost no trust-based mechanisms left between Russia and the West on conventional arms. However, new agreements may well be formulated at some point down the road, as neither side is seeking to generate new risks or spur an arms race. As regards the so-called OSCE Vienna Document, the general geopolitical situation is not conducive to its functioning, Kortunov said. Also, it is worth noting that Russia maintained its dialogue with the West mostly through the NATO-Russia Council, rather than through the Organization for Security and Cooperation in Europe (OSCE).

As an agreement, the CFE Treaty had been dead long before Russia officially withdrew from it, Alexander Yermakov, a research fellow at the Russian Academy of Sciences’ Institute of World Economy and International Relations (IMEMO RAS), explained. While the idea to agree on a renewed version of the CFE dates back to the turn of the century, the validity of the treaty was suspended in 2007, and Moscow’s move to exit from it now is just another step to demonstrate the degree to which Russia is dissatisfied with Western policies via the formal denunciation of treaties with the West, he said. Meanwhile, NATO suspending its participation in the CFE Treaty "for as long as necessary" is merely an attempt to "somehow respond to Russia’s actions," the expert concluded.

 

Vedomosti: EC may approve starting EU accession talks with Kiev, but move largely symbolic

The European Commission (EC) will likely recommend opening formal negotiations on Ukraine’s accession to membership in the European Union (EU) upon the completion of reforms by Kiev, Bloomberg reported, citing documents seen by the news agency, with passing domestic legislation on minorities, anti-corruption, "de-oligarchization" and lobbying being among the key conditions for Ukraine. This may be reflected in another assessment by the EU’s executive branch of progress made by EU candidate countries later today. On November 6, Reuters also reported that Ukraine and Moldova can expect the EC to issue positive recommendations.

As soon as there is a recommendation from the EC, the EU leaders will have to sign off on the decision at their summit in December. If they do so, the EU executive will then embark on the technicalities, in particular a roadmap will be drafted and an assessment will be made of whether Ukraine has aligned its laws with EU standards. A candidate country must also meet all the necessary conditions, hold talks, and conduct reforms in line with the 35 chapters of the acquis, or "acquis communautaire," the aggregate body of EU legislation, regulations and judicial rulings that have comprised EU law since 1993, covering everything from the free movement of capital to social welfare and from transportation to anti-corruption efforts. Even under the best-case scenario, such an in-depth process can last for years.

Any recommendation to open accession talks with Ukraine would essentially be a symbolic gesture, but the actual process of negotiating membership can take an eternity, said Russia in Global Affairs Editor-in-Chief Fyodor Lukyanov. Depending on what the EU wants from Ukraine, the bloc will either contribute to Kiev’s integration or discreetly delay the process. And, in reality, the EU will seriously consider Ukraine’s membership bid only after the current hostilities end, Lukyanov insists. For the time being, Brussels is merely seeking to demonstrate its political support for Kiev in its conflict with Russia, the outcome of which will largely determine Ukraine’s position within the EU orbit in the future, he said.

Although Ukrainian President Vladimir Zelensky has already signed amendments to the Ukrainian law on education that should alleviate the situation for ethnic Hungarians in Ukraine’s Transcarpathia region, which borders on Hungary, the problem with the Magyar minority will nevertheless persist, Kirill Teremetsky, an expert at the Center for Comprehensive European and International Studies at the Higher School of Economics (HSE University), noted. Overall, Budapest will likely only be satisfied if Kiev meets its three requirements, i.e. completely canceling the law on education, removing Hungary’s OTP Bank from the Ukrainian blacklist, and signing a ceasefire and starting negotiations with Russia. And if Ukraine refuses to make any concessions on these points, Hungary may move to block any accession talks independently, but, in fact, the sides may reach a compromise through bargaining, the expert surmised.

 

Izvestia: Russia set to oppose designating Hamas, Hezbollah as terror organizations at UN

One month has passed since the outbreak of the latest escalation between Israel and radical Palestinian group Hamas, and it is still difficult to discuss any diplomatic solution to the crisis, with the international community striving to find a way toward a ceasefire. On November 2, US Secretary of State Antony Blinken set off on his latest tour of the Middle East, during which he visited Israel, Jordan and Turkey. The top US diplomat tried to persuade Israeli Prime Minister Benjamin Netanyahu to take a "humanitarian pause," but the proposal was rejected out of hand.

The United Nations, as well, is looking for a peaceful resolution. The UN is expected to convene another Security Council meeting on Thursday to discuss, among other things, the humanitarian crisis that the embattled Gaza Strip is facing. For its part, Russia has put forward two resolutions on a ceasefire, but both were blocked by the US. However, as Russian First Deputy Permanent Representative to the United Nations Dmitry Polyansky told Izvestia, the UNSC will not consider any proposals to officially designate Hamas or its prime supporter, Lebanon-based Shiite group Hezbollah, as terrorist organizations.

Earlier, Israel demanded that Russia designate members of the Palestinian radical movement as terrorists.

"Such initiatives are not currently being considered. Hamas is inseparable from the Palestinian national liberation movement, while Hezbollah is a powerful Lebanese political force, whether anyone likes it or not," Polyansky said.

Moreover, Russia maintains a political dialogue with both groups. In 2021, news came that the head of Hezbollah’s political wing had a meeting with Russian Foreign Minister Sergey Lavrov, and a Hamas delegation visited Moscow for talks in late October. Russia explains its ties with Hamas by the need to maintain communication with all parties to the Palestinian-Israeli conflict.

"The UNSC is unlikely to pass a resolution on adding Hamas or Hezbollah [to the list of designated terror groups], as Russia and China are against it. And this proposal would hardly make it to the General Assembly as the Global South will refuse to support that," Sergey Ordzhonikidze, former Russian Deputy Foreign Minister and former UN Deputy Secretary General, told Izvestia. "Amid today’s conflict, any proposal that would mean giving a radical assessment of either side would hardly help usher in a ceasefire," he added.

Moreover, designating Hamas and Hezbollah as terrorist organizations would not only imply a moral condemnation of one party to the conflict, but also pave the way for an international military incursion, the expert believes.

 

Nezavisimaya Gazeta: Kiev urges allies to keep up support, as Zelensky rules out elections

On Monday, Ukrainian President Vladimir Zelensky ruled out holding scheduled parliamentary and presidential elections, saying that now was not the time for them amid the ongoing military conflict. Meanwhile, Andrey Yermak, head of the Ukrainian presidential official, criticized Western countries for showing their fatigue amid the ongoing hostilities. In turn, Mikhail Podolyak, adviser to Yermak, cautioned the West against freezing the conflict. Moscow would use any pause to upgrade its armed forces, he insisted, urging more weapons supplies for Ukraine "as the only right way."

Against this backdrop, Zelensky’s latest video address, in which he declared inadmissible any public debate on the issue of holding the presidential vote amid hostilities was noteworthy. In it, he urged all military and civilian officials to focus on the current challenges and purely defense-related issues.

In the wake of Zelensky’s speech, it became clear that the Kiev regime neither intends to hold elections amid the hostilities nor would it accept any peace settlement that did not impute victory to Ukraine, even though such an outcome is getting increasingly unattainable given Ukraine’s futile counteroffensive. This would appear to be a sort of trap, as the Ukrainian leadership is demanding more assistance from its Western allies while cautioning them against any peace initiatives or attempts to engineer a government shake-up in Kiev.

However, Rostislav Ishchenko, president of the Center for Systems Analysis and Forecasting, told Nezavisimaya Gazeta that he saw no underlying conflict with the Western leadership here. "As long as Kiev continues fighting with Russia, the West will support it. For it is Ukraine that is doing the fighting, not the West," he maintained. As regards elections, the relevant Ukrainian law forbids holding any during martial law, he added.

Incidentally, a bill to extend martial law until mid-February has been submitted to Ukraine’s Verkhovna Rada (parliament). Once approved, it would mean that no vote would be held in March 2024 either. However, should martial law be lifted in mid-February, a new election campaign could be held in May, Ishchenko said. Commenting on whether martial law may be cancelled, the analyst said that after Ukraine is defeated in the military conflict, both subsequent elections and the coming to power of a new leadership will be possible.

 

Izvestia: Commercial, retail lending exceeds $1 trln in Russia for first time ever

In the first nine months of 2023, the total volume of loans to households and businesses in Russia grew by 19% to hit a record 101.2 trln rubles at the end of September, according to Central Bank of Russia data analyzed by Izvestia. Commercial loans reached 70.5 trln rubles ($763 bln), while retail lending amounted to 30.7 trln rubles ($332 bln), with mortgages constituting the bulk of it, or 17.1 trln rubles ($185 bln).

While corporate demand for lending has been prompted by a revival of business activity in the economy and external debt substitution, retail lending is already showing signs of overheating amid consumer and investment demand among households.

According to Rosstat, in 2022 Russia’s GDP exceeded 151 trln rubles ($1.63 trln in current terms), and this year, according to an Economic Development Ministry estimate, it will grow by 2.8%. This means that the total volume of loans issued to households and businesses so far stands at some 67% of GDP.

However, a cause for concern will emerge only if the portfolio of one group of borrowers exceeds 80% of GDP, Freedom Finance Global leading analyst Natalia Milchakova argues, while now, business lending amounts to just 45%. This means that companies have enough resources to implement their investment projects, she insists. In addition, borrowings will most likely form the basis of economic growth in 2023 and 2024, the expert believes.

Businesses are lending more to satisfy domestic demand amid the exit of some foreign companies from the market, added Yegor Lopatin, deputy director of the NKR Agency’s financial institutions ratings group. At the same time, in the wake of the Central Bank’s hike in the key interest rate to 15% at the end of October, he expects a serious drop in lending, which will mostly reduce risks in retail portfolios.

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