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Press review: White House reaction to Douma and chances of Putin-Trump meeting

Top stories in the Russian press on Tuesday

RBC: US vows harsh response to alleged Douma chemical attack

US President Donald Trump said he would decide within 48 hours on Washington’s possible response to the alleged chemical attack in Syria’s Douma. The accusations of using chemical weapons may trigger a harsher round of sanctions against Russia, Editor-in-Chief of the Arms Export magazine, Andrei Frolov, told RBC. Given Trump’s tough rhetoric, the risk of a direct military confrontation between the United States and Russia in Syria is very unlikely, experts interviewed by the paper said.

After the US strike on Syria’s Shayrat airbase a year ago, the chemical attacks have not stopped and Washington found itself in limbo. Apparently, a single strike would not turn the tide, and large-scale steps against Damascus are costly given Moscow’s warning that the Russian task force in Syria is ready to repel US attacks if Russian servicemen come under threat, Andrey Baklitsky, PIR Center (an independent NGO) expert, said.

Speaking on the confrontation morphing into a global one, that would be possible if Israel or the US launched a long-term military operation and the attacks became regular, Leonid Isayev, an orientalist scholar and senior lecturer at the Higher School of Economics told the paper. "Now surgical strikes by Israel or the US are not swaying the power balance in the region and so there is no sense in starting a conflict," he said. According to Isayev, even if the US launches a strike on the Syrian army, it will be only a demonstration of Trump’s consistent policy emphasizing that the use of chemical weapons is a line that must not be crossed. Should the US attack the Syrian army’s positions, Moscow will only deliver a verbal response, and the Russian military won’t take any active steps, the expert noted.

Even if Moscow and Washington get embroiled in a confrontation, it will be through allied forces, not a direct one. The fighting between the armed opposition and Damascus and their allies may intensify in the southern provinces, where a de-escalation zone set up under an agreement with Russia, the US and Jordan, is in force, Anton Mardasov, an expert from the Russian International Affairs Council told the paper.

After the events in Khan Shaykhun and the bombing of the Shayrat base there has been no confrontation between Moscow and Washington, Ivan Timofeyev, Program Director at the Russian International Affairs Council, noted. However, starting last year, bilateral relations worsened and the threat of a military standoff between Russia and the US in Syria is real, according to the expert.


Kommersant: Moscow, Washington may start gearing up for Putin-Trump summit soon

On Friday, the US Senate will hold a confirmation hearing to consider former CIA chief Mike Pompeo for US Secretary of State. A source close to the State Department told Kommersant that after this the US and Russian diplomatic institutions may start preparing for a meeting between the two presidents - Donald Trump and Vladimir Putin. A source close to the Kremlin acknowledged that amid the current standoff it won’t be an easy task to convene a full-fledged bilateral summit, but did not rule out that the two leaders will meet only in late 2018 on the sidelines of the G20 summit in Argentina.

Trump suggested holding a meeting with Putin during their last phone conversation on March 20. A source close to the Kremlin noted that the US leader hinted that he would be ready to pay a visit to Moscow if Putin visited the US capital first.

White House Press Secretary Sarah Sanders told reporters that the US leader was planning to meet with Putin despite the new round of harsh sanctions imposed on Russia, which blacklisted 38 Russian businessmen and officials along with major companies.

Putin and Trump have not held a full-fledged bilateral summit so far. In July 2017, they had a two-hour-long meeting on the sidelines of the G20 summit in Hamburg, and in November they briefly met at the Asia-Pacific Economic Cooperation (APEC) summit in Da Nang. According to a source close to the Kremlin, given the current climate, which has become more tense over the past months, it will be difficult to arrange a bilateral meeting between the two presidents in the US, Russia or a third country.

Paul Saunders, Executive Director of the Washington-based Center for the National Interest, doubts that the meeting between the two presidents will be held in the coming months.

The downward spiral in Russian-US relations, new rounds of sanctions, the toughening rhetoric and the toxic Russiagate issue in US domestic politics as well as the appointment of the hawkish John Bolton as Trump’s new national security adviser do not encourage holding a full-fledged summit between the two presidents, said Valdai International Discussion Club expert Dmitry Suslov, who is deputy director of the Center for Comprehensive European and International Studies at the Higher School of Economics.

A source close to the Kremlin noted that against the odds, Putin and Trump will meet even if no separate summit takes place.


Media: How rattled Russian markets survived ‘black Monday’

The latest round of US sanctions has sparked the sales of assets on the Russian financial market. On Monday, stock indices plunged 8-11% and dollar and euro rates skyrocketed 3.7-4%. The RTS index renewed its seven-month minimum, reaching 1,094.98 points. At the close of Monday’s trade, many liquid stocks lost 12-20% in price.

The last time the Russian stock market was struck by such a fever was on the previous "black Monday"of March 3, 2014, Kommersant writes. Foreign investors saw the news on Crimea’s referendum to rejoin Russia as a signal for selling their ruble assets amid fears of sanctions by Western countries. However, no further significant plunge on the market is expected, the paper writes. According to Fitch analyst Alexander Danilov, the panic sale of debt securities of Russian companies, which are not on the sanctions list, will have a limited effect.

The latest sanctions stung their targets far more sharply, but they are unlikely to affect Russian economy the way the sectoral sanctions did, Brian O'Toole, a senior fellow with the Atlantic Council, told Vedomosti. The collapse of the Russian stock market is a response to the US sanctions and a possible escalation of the Syrian conflict, analysts told the paper. The response to the sanctions was unexpected, but it should not be compared with the situation of 2014, Renaissance Capital's chief economist Oleg Kouzmin said. "Then it was unclear how the sanctions would affect the Russian economy and how the budget would deal with this. Now there are no such questions. The economy’s reaction will be quite moderate," he said.

This downturn appears to be an emotional reaction, and the fundamental assessment of the Russian market remains unchanged, Darya Zhelannova, an analyst at Alfa Capital, told Izvestia. According to her forecast, if there is no other bad news, the ruble will return to the 57-58 per dollar benchmark, with the current oil price at around $67-70 per barrel of Brent.


Vedomosti: Russia to create domestic offshores to aid sanctions-hit oligarchs

Russian Prime Minister Dmitry Medvedev pledged to order the government on Monday to draw up measures to support Russian companies hit by the latest round of US sanctions. According to Vedomosti, the authorities are discussing a project of creating two territories with special conditions and similar to offshores - on the Oktyabrsky Island in Kaliningrad and on the Far East’s Russky Island, four federal officials and an individual who took part in the discussion said.

The Russian Economic Development Ministry drew up the bill and now the document is being discussed by the respective agencies and may be passed during the parliament’s spring session. A representative of Kaliningrad’s government has confirmed that the idea was being considered.

This initiative was put forward a long time ago, but its discussion only resumed after the US toughened its sanctions, an official told the paper, explaining that the Russian authorities are searching for mechanisms of returning and keeping capital in Russia.

Those seeking to return money to Russia will be able to do this quickly and without paying taxes, the officials said. The initiative makes it possible to move foreign structures to Russia from other countries, including offshores, while preserving their legal form. The residents of these zones will be able to obtain an international company status, which will allow it to register within just one day without disclosing some information, an official at the Economic Development Ministry said.

This project is similar to the offshore status the US state of Delaware offers, which envisages simple registration of businesses and a convenient legal arrangement, partner at Dentons Vasily Markov said.


Izvestia: Syrian prime minister to pay visit to Crimea

Syrian Prime Minister Imad Khamis has accepted an invitation to attend the fourth Yalta International Economic Forum, Crimean leader Sergey Aksyonov told Izvestia. One of the key issues to be discussed at the event will be the post-war restoration of the Middle Eastern country.

The Syrian delegation will consist of 100 people, including all key ministers of the economic sector and representatives of the country’s business associations, in addition to major entrepreneurs. "During the first Yalta conference, which will be held in the Livadia Palace [venue of the 1945 WWII Crimean conference] we plan to discuss scenarios for Syria’s restoration and the development of bilateral as well as regional-level cooperation," Aksyonov said.

"At this venue, we are bringing together our partners and experts from Europe and other countries to carry out joint efforts to contribute to Syria’s reconstruction. Later this effort will be conducted in the framework of the expert-level council of the Yalta International Economic Forum," he said.

The Yalta conference will be held on April 19-21, and will convene for the first time to discuss key issues regarding international relations.

Syria’s envoys to Crimea also plan to hash over the implementation of particular investment projects, including the development of the Black Sea peninsula’s agro-industrial sector.

A co-chairman of the forum’s organizing committee Andrey Nazarov said a number of investment agreements between Crimea and Syria would be signed.


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