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Press review: America's new Russian envoy pick and Kremlin's potential US policy shift

Top stories in the Russian press on Thursday, July 20

Izvestia: Washington’s new envoy to Moscow to be more engaged in US-Russia relationship

Ex-Utah Governor Jon Huntsman, 57, who is expected to be approved by the US Senate as America’s new ambassador to Moscow, enjoys the respect of both Republicans and Democrats, and is known as a professional diplomat with huge political clout, Izvestia writes with reference to Russian and American experts. Yevgeny Minchenko, a political scientist and head of Minchenko Consulting, told the newspaper that Huntsman is "an experienced politician supported by both Republicans and Democrats" and may be referred to as "a moderate hawk."

In 1992, Huntsman headed the US diplomatic mission in Singapore at the age of 32, becoming the youngest US ambassador in over 100 years. The politician served as governor of the Utah state in 2005-2009. In 2009, US President Barack Obama appointed Huntsman US Ambassador to China. He held this office until 2011. Richard Weitz, Director of the Center for Political-Military Analysis at Hudson Institute, told Izvestia that Huntsman has never been involved in any scandals related to Russia, which is why he expects the Senate to easily approve his candidacy.

According to Yuri Rogulev, Director of the Franklin D. Roosevelt Foundation for United States Studies at the Moscow State University, "Huntsman’s political views are secondary" and he will carry out any instructions given to him by the President and Secretary of State. "Huntsman sticks to a tough stance and he served as ambassador to China with Barack Obama’s (administration). Those two factors will help get him easily approved by the Senate. I think this is what guided Trump," he said, adding that he considers it important that Huntsman’s appointment is not a politically motivated one.

Director of the Russian Academy of Sciences’ Institute of US and Canada Studies, Valery Garbuzov, thinks Huntsman’s key task will be to establish contacts between the two countries. "He will become one of the links for building efficient cooperation between Moscow and Washington even in a situation like today’s. So far it is no easy task to make conclusions since the state of the Russian-US relations remains unclear," the expert said.


Nezavisimaya Gazeta: Kremlin may be forced to adjust its US policy

Given the persistent media buzz about a brief dinner conversation between Russian and US Presidents, Vladimir Putin and Donald Trump, at the G20 summit on July 7, experts do not rule out that the Kremlin may be driven to alter its foreign policy tactics as it sees that relations between the two countries are coming under increasingly greater fire and getting boxed in, Nezavisimaya Gazeta reports.

“The Kremlin perceives it distinctly after Trump put forward a new ambassador to Moscow that we’re destined if not for confrontation, then at least for the cold shoulder treatment," Valery Solovey, professor and Chair of Public Relations department at the Moscow State Institute of International Relations (MGIMO) in Russia, told the publication. "Even if Trump wanted, and it looks like he did want at some point after he was elected, to move the relationship between Russia and the US closer, he does not possess an iota such power since his each step and look towards Russia is looked on with suspicion," he added.

Amid this background Solovey expects the Kremlin to try and change its foreign policy. "I think they are going to adjust it since a chill in relations still do not mean an active confrontation," he said, adding that "there is an understanding that we can cooperate on a number of areas, be it on Syria or North Korea, though it remains to be seen whether (such) cooperation will take place."

Speaking about the new US envoy to Russia Jon Huntsman, he said that his line will "depend on his first steps and his reputation." "It’s common knowledge that he is a supporter of a tough course, though the Kremlin is also going to send Antonov, a supporter of a tough course, to Washington to replace Kislyak. This is an equal exchange, and these kind of appointments - both Washington’s to Moscow and Moscow’s to Washington - show a clear sign of how Russia and the United States estimate the future of their relations," the expert told Nezavisimaya.


Media: Prosecutor General protests against Central Bank in Jugra case setting controversial precedent

Following a protest by Russia’s Prosecutor General against the Central Bank’s Wednesday decision to impose a temporary administration against Jugra Bank and a three-month moratorium on satisfying bank lenders’ claims, the Deposit Insurance Agency - a state corporation - sent a letter to agent-banks about the urgent suspension of payments, Kommersant writes on Thursday.

This leaves 260,000 Jugra depositors with insured liability amounting to 173 bln rubles potentially facing a nasty surprise, the newspaper says. There have been no official announcements on suspended payments as of yet. "Agent-banks, including VTB24, have to suspend the launch of payments to Jugra depositors, so we will not start payments on July 20," Chief Executive Officer of VTB24, a retail banking arm of Russia's second-biggest lender VTB, Mikhail Zadornov told Vedomosti.

This is the first case of an open conflict between the General Prosecutor's Office and the Bank of Russia. The money issue may have played a major role in this particular case, as the expected payments are to become the biggest insurance event in the history of the Russian market, Kommersant writes. However, the intervention by the General Prosecutor Office has made the situation around Jugra even more uncertain. Still, experts interviewed by the publication do not expect the protest to reverse the situation. Bain and Company partner, Yegor Grigorenko, said "the bank’s owners may be willing to postpone payments to depositors and solve some other issues." "f the temporary administration actions are suspended and the moratorium is lifted, and the moratorium is lifted, the owners will obtain access to the bank’s assets. However, I’m not aware of any precedents in global practice when a regulator would remove its principal decision as a result of such instructions," he added.

Founded in 1990 in Russia’s Tyumen Region, Bank Jugra entered the top-30 largest banks by assets and top-20 largest banks by retail deposits among the country’s lenders as of October 1, 2016. On July 10, Russia’s Central Bank imposed a three-month moratorium on meeting creditor claims of Bank Jugra and authorized the Deposit Insurance Agency with provisional administration functions to manage the lender for a six-month period. The key objective of the provisional administration function is to carry out an inspection of the bank’s financial situation, the regulator stated.


Izvestia: Ukrainian lawmakers to consider restoring economic ties with Russia

Due to Kiev’s anti-Russian crusade which has squashed economic ties with Russia costing millions of Ukrainians jobs and income, Ukraine has been hit by a wave of employee protests at a number of factories demanding a restoration of trade relations with Moscow. They have even requested a reply from President Pyotr Poroshenko and the Verkhovna Rada (national parliament) and the issue may indeed return to the country’s political agenda. "This topic will be discussed after September 5," Oppositional Bloc MP Tatyana Bakhteyeva told Izvestia.

"The breach in relations is negatively affecting the economy. It is essential to return economic ties with Russia to the levels when joint ventures had operated. Trade has to be brought back to those previous level as soon as possible. Many MPs, not only those from the Oppositional Bloc understand it, and attitudes on the issue from an economic viewpoint are changing. Even certain lawmakers inside the coalition (Pyotr Poroshenko’s Bloc and the People’s Front) consider it necessary to establish work relations with Russia for economic reasons," Bakhteyeva said.

However, though most lawmakers realize that the country is struggling to get out of an economic rut, opinions on whether the needs of common Ukrainians should be fulfilled are split. A source in the Pyotr Poroshenko Bloc told Izvestia that the party is well aware of what perpetuates people’s unrest and the link between the country’s economic challenges and a breakdown with Russia. It is hardly possible to avoid a response to people’s demands now that two years are left before new elections, though there is still time to "try and convince people to wait until Ukraine refocuses on other markets," the source said.

"Some Verkhovna Rada members view this from an economic viewpoint, and some from a political one. The truth is actually somewhere in the middle. Economic tasks can be solved to the extent of physical capacity. Ukraine has to learn how to replace business relations it used to have with Russia with ties with other countries, which will take time," Nina Yuzhanina, an MP from the Pyotr Poroshenko Bloc and the Chairman of the Parliamentary Committee on Taxation and Customs Policy told the newspaper. She added that the ruling party still sticks to the principle implying no relations with Russian whatsoever.

Yevgeny Murayev of For Life party told Izvestia that Ukraine’s southeastern part is facing major challenges, while such sectors are aviation, rocket construction, and other heavy industries are facing losses. "The problem is definitely worth discussing. It is necessary to differentiate between politics and economics, to end the conflict, restore economic cooperation and remove sanctions as it is Ukraine that is being hurt the most. I would like four million Ukrainians to be employed in their homeland instead of Russia. Now we are getting to the point of no return as Russia is developing its import substitution program, searching for an alternative, while it is the Ukrainian economy that is suffering," he emphasized.


RBC: Leading Chinese global online retailer to boost its presence in Russia

AliExpress, China’s online retailer, plans to substantially build up its business in the Russian off-line market and it has launched negotiations on opening showrooms in VimpelCom retail outlets operating under the Beeline brand, RBC business daily reported citing a source familiar with the talks, and another one close to the telecommunication holding. "Currently, AliExpress is studying VimpelCom’s locations in Russia’s biggest cities where it may become a sub-tenant. The parties have also been considering jointly selecting new locations," one of the sources told the newspaper.

A final decision on the number of outlets provided to the Chinese retailer will be made this coming autumn. Estimates have it that without rent, 2-3 mln rubles will be poured into opening one store. "One of the reasons for expanding the chain using the mobile retailer’s capacities is the traffic of a retail store or an outlet where consumers intentionally come to most likely to buy something or perform some sort of transaction," one of the sources said.

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