Tag: sanctions

Berlusconi calls EU leaders irresponsible towards Russia

Italy’s former Prime Minister and leader of the right-wing opposition party Forza Italia Silvio Berlusconi on Sunday accused NATO and Western leaders of irresponsible attitudes towards Russia.

“We are strangled by a most profound economic crisis, the situation is only worsening and it the situation is being aggravated by the international situation and the decisions of European leaders, heads of Western countries, the United States and NATO, who were irresponsible and unthinking to make null and void of the enormous work done after the signing of the Pratica di Mare agreement [on the establishment of the Russia-NATO Council] that ended the 50-year-long Cold War,” he said.

He said that the recent development around the Ukrainian crisis, the United States’ and the European Union’s policy of sanctions against Russia were irresponsible decision of the world leaders. “Russia cannot but defend Ukrainian citizens of the Russian origin who are like brothers for Russians,” he noted.

At the NATO summit Kiev has reached an agreement on sending Western military advisers to Ukraine and on the delivery of modern weapons from five countries, including Italy.

Yuri Lutsenko, an adviser to Ukrainian President Pyotr Poroshenko and leader of the Pyotr Poroshenko Bloc party, said on Sunday agreements were reached at the NATO summit.

“Agreements were reached at the NATO summit on Western military advisers and the delivery of modern weapons from the United States, France, Italy, Poland and Norway,” Lutsenko wrote on his Facebook page.

The Ukrainian president said last Friday on the results of the NATO summit in Wales that some countries were ready to supply weapons to Ukraine. Poroshenko declined then to specify the counties, offering Kiev these “newest types of weapons,” for confidentiality reasons.

New EU sanctions to target Russian oil, defence

The FT reports that Europe’s latest sanctions will target a number of key Russian oil and defense industry companies and banks. The new round of economic sanctions is due to be imposed by Brussels Tuesday.

The Wall Street Journal also reported on the latest round of sanctions, referring to leaked EU documents.

Rosneft, Gazpromneft and Transneft are among the oil sector companies, included in the sanction list the Wall Street Journal said it examined. They will reportedly be banned from raising funds with the maturity period exceeding 30 days. The same restriction will be imposed on five Russian state-controlled banks, including Sberbank and VTB Bank, already forbidden from raising bank loans in the European Union member states for longer than 90 days, the newspaper said Sunday.

Russian defense industry access to the EU capital markets will also be seriously complicated, according to the documents cited by the Wall Street Journal. Oboronprom aerospace holding, United Aircraft Corporation and Uralvagonzavod scientific industrial corporation are among the defense industry companies Wall Street Journal said would be able to get a bank loan with maximum maturity of 30 days in the European Union.

Nine companies, producing equipment for the Russian army, including Kalashnikov, Sirius and Stankoinstrument, will reportedly no longer be able to purchase dual-use technology (with possible military applications) from the EU member nations.

Brussels and Washington started to impose economic sanctions against Moscow since Crimea’s reunification with Russia in March, which the West considers illegal, and Russia claims to be fully legitimate. The latest round of restrictions has, in particular, limited capital raising in the European Union for a number of Russian banks.

As a responsive measure, Moscow issued a one-year ban on certain food products importation from the United States, the European Union, Australia, Canada and Norway.

New Sanctions against Russia in energy or finance sectors could trigger an asymmetric response from Moscow, such as closing its airspace, Russia’s Prime Minister Dmitry Medvedev told the Vedomosti newspaper in an interview released Monday.

“It is them [the West], who should be asked whether there will be new sanctions. But if there are sanctions, linked with energy, [or] further restrictions on our finance sector, we will have to respond asymmetrically. For instance, [with] restrictions in transport area. We act on the premise of friendly relations with our partners, and this is why the sky above Russia is open for flights. But if we are restricted, we will have to answer,” Medvedev added.

The prime minister argued that certain Western airlines could go bankrupt in case they are banned to use Russia’s airspace.

“But this is a bad option. I just would like our partners to realize it at a certain moment. Especially, [considering the fact] that the sanctions do not help to establish peace in Ukraine. They miss [beside the mark], and an absolute majority of the politicians understand it. There are just an inertness of thinking and, unfortunately, the will to use force in international affairs,” Medvedev stressed.

Total CEO says sanctions against Russia a mistake

Implementation of sanctions against Russia is a mistake, French oil and gas company Total Chief Executive, Christophe de Margerie said in his interview to Sueddeutsche Zeitung newspaper.

“We cannot let them persuade us that Russia is our enemy. Our energy supply depends on this country. If Americans, based on the historical reasons and internal political motives, want to escalate the conflict, then it is their choice. But we, Europeans, have to deal with this crisis in a different way, not painting everything in black and white only,” de Margerie said as quoted by the Sueddeutsche Zeitung.

De Margerie also stated that he does not believe that Russian President Vladimir Putin plans to annex Ukraine.

Over the past few months, the United States and the European Union introduced several rounds of targeted sanctions against the Russian economy, unjustifiably blaming Moscow for meddling in Ukraine’s internal affairs.

As the Ukrainian crisis escalated, the United States persuaded its allies to add Russian individuals and entities to their own blacklists.

Earlier today, US Deputy National Security Adviser Ben Rhodes said that US President Barack Obama and leaders of several European countries agreed that more sanctions should be imposed on Russia.

Russia has repeatedly referred to the language of sanctions “counterproductive,” saying that such measures “threaten international peace and stability.”

Source: RIA Novosti

Lavrov: There will be no military interference in Ukraine

There will be no military interference to Ukraine, and Russia is for peaceful settlement. Sergei Lavrov, Russia’s Minister of Foreign Affairs, has made this statement on Monday at an annual meeting with students and teachers of Moscow State University of Foreign Affairs.

“There will be no military interference. We are committed exclusively to the peaceful settlement of this deep crisis, this tragedy,” Lavrov stated.

He noted that the demand to the militia to lay down arms was unrealistic.

The minister said that Washington and Brussels should demand that Kiev quit using heavy weaponry against civilians.

“The most important is that Washington and Brussels demand from Kiev the same that they demand in all other conflicts: to stop using heavy weaponry and aviation against civil facilities and civilians,” the minister stressed.

The demand to the militia to lay down arms is unrealistic, Russian Foreign Minister Sergei Lavrov said.

“Let’s sit for talks, but not threaten with sanctions against Russia and insist on quite unrealistic demands for the militia to lay down their arms and allow to kill them,” the minister said.

“Unfortunately, our western partners are blinded with the situation and give their support to any statements and actions of the current Ukrainian authorities,” Lavrov said adding that this position was biased and non-critical.

Moscow hopes that Contact Group at session in Minsk will discuss cessation of fire, Lavrov added.

“I expect that the talks started earlier in the day will be dedicated to a task of fixing, immediately and without preconditions, terms for a ceasefire,” the minister said.

The foreign minister noted that it was possible and necessary to return to pragmatic cooperation in relations of Russia with the United States and the EU.

“We believe that in relations with the European Union and the United States it is possible and necessary to return to pragmatic cooperation based on equality of rights and mutual respect. But for this, it is necessary to give up the absolutely hopeless policy of ultimatums, threats and sanctions,” the minister said.

I believe the Ukraine crisis should show everyone the absolute harmfulness of a stance, which puts particular countries, especially those close to us, like Ukraine, before a choice: ‘either you go to us or you go to Russia and then we’ll build new dividing lines and walls between us,” Lavrov said.

This choice of either with us or against us, which Brussels sometimes demands from Ukraine and other countries of the post-Soviet space, “is prevocational,” the Russian foreign minister said. “I would say this is worse than a crime, this is a big mistake,” Lavrov said.

The Russian foreign minister said that “you can’t make a stake on a military force, especially in the 21st century.” “I hope that we’ll move away from a dangerous line as far as the Ukraine crisis is concerned,” Lavrov said.

“As far as the WTO is concerned (namely, Russia’s withdrawal in reply to possible new sanctions), we shall not withdraw. On the contrary, we want more actively to master the WTO instruments, including those concerning trade disputes,” Lavrov said. “We have already used those instruments in order to overcome, what we believe, the EU’s discriminatory policy with regard to anti-dumping procedures”.

Investigators must also be returned to the Boeing crash site in Ukraine, Russian Foreign Minister Sergei Lavrov said.

“No facts are given to us. They persuade us to believe their words,” he said.

“The European Council wrote in a document that it demanded immediate access to the site of the Malaysian Boeing crash. Where have they been until now. There was no threat from the militia,” Lavrov said.

“There was a demand of the UN Security Council to ensure ceasefire in the area of the crash. But Kiev stated the same day that they would stop firing after taking control of the area,” the minister said.

Prospects for abrogation of visa formalities between Russia and the European Union countries are not very reassuring, Russian Minister of Foreign Affairs Sergei Lavrov stated.

“The prospects are not very reassuring, frankly speaking,” the Minister pointed out. “A not very numerous but pushy group formed in the European Union. That group came out against abrogating visas. They made no bones of speaking about that”.

Source: Itar TASS

Economic expectations collapse as sanctions hit German consumers

It starts out un-alarmingly. The optimism of German consumers weakens somewhat, according to the forward-looking Gfk survey, conducted on a monthly basis for the European Commission. So the overall index fell to 8.6 for September, from 8.9 in August. It was the first decline since January 2013.

The index bottomed in late 2008 below 2, after a breathtaking crash during the financial crisis. In late 2007, it had hovered above 9. Early 2014 was the first time since the prior bubble that the index broke above 8. And August’s level of 8.9 represented an “extremely optimistic economic outlook,” as Gfk calls it. German consumers have been feeling good, and according to the headline index, they’re still feeling good up there somewhere in the rarefied air above 8.

But beneath the surface, there is serious trouble. Gfk reports that the sub-index of economic expectations, “in light of the intensified state of international affairs, completely collapses.”

It plunged 35.5 points to 10.4. The worst monthly plunge since the beginning of the survey in 1980. In a single month, it nearly wiped out all the gains of the boom of the last 12 months. Gfk cites the escalation of the situation in Iraq, Israel, the Eastern Ukraine, and particularly “the faster rotating sanctions spiral with Russia.”

Since there appears to be no sustainable solution to any of the trouble spots, consumers are showing increased uncertainty about the possible consequences for the German economy, Gfk reports. “Particularly the sanctions against Russia, which have already hit exports noticeably, could become a real danger for the German economy.”

The two sub-indices for income expectations and propensity to spend have been spared so far this type of brutal collapse, though they both fell from their lofty perches. Income expectations hit an all-time record in August. But for September, the index dropped 4.6 points to 50.1. The propensity to spend dropped 1.7 points to 49.3. At these levels, both are still “relatively robust.”

Gfk credits “the continued stable domestic conditions, stable employment levels, good income development, and low inflation” for limiting so far the impact of collapsing economic expectations on income expectations and the propensity to spend.

ECB President Mario Draghi, along with inflation mongers in the new French government, at the Fed, on Wall Street, and elsewhere should take note: inflation, as the report points out repeatedly, is important to Germans. Watch what happens to German consumer attitudes – and spending – if you steal their income and scarce savings one bite at a time.

But dark clouds have already appeared over German consumer spending: Gfk cites the increase in the propensity to save in August as “the first indicator that the consumer will be more careful in the future and that the impulses for the propensity to consume could decline.”

For this still “relatively robust” propensity to spend to continue, “it is necessary from the consumer’s point of view, that the situation in the crisis regions does not escalate further, but that sustainable solutions are found.” Gfk then warns: “If domestic conditions deteriorate significantly in the wake of a possible further escalation, difficult times loom ahead for the economy.”

Given the new economic malaise in Germany [Sanctions Are Eating their Lunch: Russian CEO Begs for Bailout, German Economy Swoons], any decline in consumer spending, which grew at a measly 0.9% last year, could wreak real havoc, not just in Germany, but also in its most critical trading partner France, in Italy, and other struggling economies in the Eurozone. German consumers are infamous for closing their wallets. And if they do it again, after they finally started spending more, they’d quickly prick any remaining hopes for a “recovery” in the Eurozone.

Even the folks at the German Ministry of Finance very belatedly admit that the sanctions spiral caused Germany’s current economic problems.

Source: testosteronepit

US, EU have yet to answer questions on how MH17 led to sanctions

Russia released military monitoring data in late July, which shows Kiev military jets tracking the MH17 plane shortly before the crash – and posed yet another set of questions to Ukraine and the US over the circumstances of the tragedy.

The plane crash has led to a series of sanctions against Russia from the US and the EU, but disconcerting details of how the the accident occured have yet to be answered.

Military officials – chief of General Staff of the Armed Forces Lt. Gen. Andrey Kartopolov and chief of the Air Force Main Staff Lt. Gen. Igor Makushev – posed a number of questions to Kiev and Washington concerning the possible causes of the catastrophe in Eastern Ukraine that killed almost 300 people.

1. Why did the MH17 plane leave the international corridor?

“Please note that the plane stayed within the corridor until it reached Donetsk but then it deviated from the route to the north,” said Kartopolov.

2. Was MH17 leaving the route a navigation mistake or was the crew following instructions by Ukrainian air traffic controllers in Dnepropetrovsk?

“The maximum deviation from the left border of the corridor was 14 km. Following that, we can see the plane maneuvering to return to the corridor, yet the Malaysian crew did not get a chance to complete the maneuver. At 17.20, the plane began to lose speed, and at 17.23 it disappeared from Russian radars.”

3. Why was a large group of air defense systems deployed to the militia-held area if the self-defense forces have no planes?

“As far as we know, the Ukrainian military had three or four air defense battalions equipped with Buk-M1 SAM systems deployed in the vicinity of Donetsk on the day of the crash. This system is capable of hitting targets within the range of 35 km at the altitude of up to 22 km.”

4. Why did Kiev deploy BUK missile systems on the edge of militia-controlled zones directly before the tragedy?

“We have satellite photos of the places where Ukraine had its air defense units deployed in the southeastern parts of the country. The first three photos were made on July 14. The first photo shows Buk launchers 8 km northwest of Lugansk. You can clearly see a TELAR and two TELs. The second photo shows radars 5 km north of Donetsk. You can see two TARs along with other equipment and technical structures. The third photo shows air defense systems north of Donetsk. You can clearly see a TELAR launcher and about 60 military and auxiliary vehicles, tents for vehicles and other structures.

“Here’s a photo of the same area made on July 17. Please note that the launcher has disappeared. The fifth photo shows a battery of Buk missiles at the village of Zaroshchenskoye 50 km east of Donetsk and 8 km south of Shakhtyorsk on the morning of the same day. The sixth photo shows the same area on July 18. As you can see, the battery has left.”

No Buk missile defense units in Donetsk Region, 5km north of Donetsk city, on July 17, 2014.

5. On the day of the crash Kiev intensified Kupol-M1 9S18 radar activity, key BUK system components. Why?

“Also, July 17 saw increased activity on the part of Ukraine’s Kupol-M1 9S18 radars, which are part of the Buk system. Here on this chart you see that there were seven radars operating on July 15, eight radars operating on July 16, and nine radars operating on July 17 in the area. Then, starting with July 18, the intensity of radar activities radically decreased, and now there are no more than two or three radars operating a day. The reason behind this is yet to be found.”

6. What was a military plane doing on the route intended for civilian flights?

“There were three civilian planes in the area performing their regular flights at this time. There was a flight from Copenhagen to Singapore at 17:17, there was a flight from Paris to Taipei at 17:24, and then there was the flight from Amsterdam to Kuala Lumpur.”

“Also, Russian monitoring systems registered that there was a Ukrainian Air Force jet, probably Su-25, climbing and approaching the Malaysian Boeing.”

“The Su-25 was 3-5 km away from the Malaysian plane. Su-25 is capable of climbing to the altitude of 10,000 meters for a short period of time. Its standard armament includes R60 air-to-air missiles, which are capable of locking and hitting targets from 12 km and which are guaranteed to hit the target from the distance of 5 km.”

7. Why was the military jet flying at so close to a passenger plane?

“At 17:21’35, with [the Boeing’s] velocity having dropped to 200 kilometers per hour, a new mark detecting an airborne object appears at the spot of the Boeing’s destruction. This new airborne object was continuously detected for the duration of four minutes by the radar stations Ust-Donetsk and Buturinskaya. An air traffic controller requested the characteristics of the new airborne object, but was unable to get any readings on its parameters – most likely due to the fact that the new aircraft was not equipped with a secondary surveillance radar transponder, which is a distinctive feature of military aircraft,” said Makushev.

“Detecting the new aircraft became possible as it started to ascend. Further changes in the airborne object’s coordinates suggest that it was hovering above the Boeing 777’s crash site, monitoring of the situation.

“Ukrainian officials earlier claimed that there were no Ukrainian military aircraft in the area of the crash that day. As you can see, that is not true.”

8. Where did the launcher – from the video circulated by Western media and showing a Buk system being moved allegedly from Ukraine to Russia – come from? As the video was made on the territory controlled by Kiev, where was the launcher being transported?

“I’d like to say that the information we have presented here is based on objective and reliable data from various technical systems – unlike the groundless accusations made against Russia,” said Kartopolov.

“For example, media circulated a video supposedly showing a Buk system being moved from Ukraine to Russia. This is clearly a fabrication. This video was made in the town of Krasnoarmeisk, as evidenced by the billboard you see in the background, advertising a car dealership at 34 Dnepropetrovsk Street. Krasnoarmeysk has been controlled by the Ukrainian military since May 11.”

9. Where is it right now? Why are some of the missiles missing on the launcher? When was the last time a missile was launched from it?

Screenshot from video posted on Ukraine’s Ministry of Interior account, showing a Buk system supposedly being moved from Ukraine to Russia with two out of three missiles.Screenshot from video posted on Ukraine’s Ministry of Interior account, showing a Buk system supposedly being moved from Ukraine to Russia with two out of three missiles.

10. Why haven’t US officials revealed the evidence supporting claims that the MH17 was shot down by a missile launched by the militia?

“US officials claim they have satellite photographs proving the Malaysian airliner was shot down by a missile launched by the militia. But no one has seen these photographs so far. As far as we know, there was indeed a US satellite flying over southeastern Ukraine on July 17 from 17:06 to 17:21 Moscow time.

“This satellite is part of an experimental system designed to track and monitor the launches of missiles of various ranges. If our US colleagues have imagery from this satellite, they should release it for the international community to examine it in detail. This may be a coincidence, but the US satellite flew over Ukraine at exactly the same time when the Malaysian airliner crashed.”

Buk missile defense units in Zaroschinskoe, 50km south of Donetsk city and 8km south of Shakhtyorsk, on July 17, 2014.Photo courtesy of the Russian Defense MinistryBuk missile defense units in Zaroschinskoe, 50km south of Donetsk city and 8km south of Shakhtyorsk, on July 17, 2014.Photo courtesy of the Russian Defense Ministry

This is not the first time Russia asks questions about the plane crash. No explanations have followed with Kiev insisting they have full evidence of Russia being behind the attack, but so far only releasing fake tapes.

The USA, putting the blame on the self-defense forces and Russia, has refused to release any intelligence material.

So far the US and the EU has been backing its statements and sanctions by social media and “common sense.”

Source: RT

German economy shrinks as result of Russian sanctions

Germany’s sudden second-quarter economic contraction was probably due to Russian sanctions and confidence eroded by the crisis in Ukraine, Reuters news agency quoted the finance ministry as saying on Friday.

The ministry’s monthly report obtained by Reuters shows that Europe’s largest economy shrank by 0.2% between April and June after growing 0.7% in the first quarter thanks largely to an unusually mild winter that gave a boost to construction activity at the start of the year.

“The decline in gross domestic product (GDP) goes beyond the expected counter-effect to the very strong weather-related performance in the previous quarter,” the finance ministry said in its report, attributing this “to the effect of sanctions and negative effects on confidence due to the Ukraine crisis”.

Uncertainty over Ukraine was likely to have resulted in the dampening of industrial activity in the second quarter, it said, adding that “other geopolitical tensions” and “weaker economic development in the euro zone” had also contributed to the contraction.

“If the Ukraine crisis does not escalate further and no further serious stages of sanctions are imposed, it is to be expected that the current economic slowdown is only temporary,” the finance ministry said, noting that if this was the case, investment was likely to pick up as the year progressed.

China says sanctions could aggravate Ukrainian crisis

Ukraine’s crisis can only be settled politically, and sanctions might only aggravate the situation, Chinese diplomats told ITAR-TASS on Friday.

Earlier, US Department of State coordinator for policy issues Daniel Fried said in an interview with Lithuanian media that the USA was urging different countries to join sanctions against Russia over Ukrainian events.

“The Ukrainian crisis requires a political solution. In a real situation, sanctions do not solve the problem; on the contrary, they might cause new problems which do not meet the interests of all sides and the initial intention to resolve the crisis,” the spokesman for the Chinese Foreign Ministry said in a written response to the ITAR-TASS request to comment on Fried’s remarks.

“China calls upon all the parties to keep calm and exercise restraint, helping to promote peace talks, seek a political solution of the existing problems, and avoid the actions fraught with aggravation of contradictions and escalation of tensions, in order to ensure peace and stability in the region,” the Chinese Foreign Ministry said.

EU will lift sanctions on Russia says Danish bank

The European Union will lift the sanctions it has imposed on Russia over the situation in Ukraine in one to three months, according to research conducted by the Danske Bank.

“We believe an escalating trade war would be unbearable for both Russia and the EU and that the EU will revoke the sanctions within one to three months,” the bank said in a report released Tuesday, adding that Russia will also lift the trade restrictions it has imposed on Europe.

According to the analysis, the Ukrainian crisis will only have a “modest” direct impact on the European economy. Of the Nordic countries, Finland was named the most vulnerable due to its trade, tourism and foreign direct investments links with Russia. However, Norway’s economy might even strengthen due to the potential EU gas substitution from Russia toward the country.

The report suggests that it is highly unlikely that the European sanctions will be able to influence the current political situation in Russia, as support for President Vladimir Putin inside the country is currently “very strong.” It also notes that Russia is currently strengthening its ties with its Latin American and Asian partners.

Danske Bank is the part of the Danske Bank Group, the largest bank in Europe and one of the leading financial organizations in Europe. Danske Bank Group is headquartered in Copenhagen.

Obama plans new sanctions if Russia delivers humanitarian aid

In case Moscow proceeds with its plans to deliver humanitarian aid without the authorization from the authorities in Kiev further sanctions are likely to be imposed in regard to Russia.

Russia’s planned humanitarian aid for the embattled southeastern regions in Ukraine must is possible only with the consent from the authorities in Kiev, the White House said in a statement following President Barack Obama’s telephone talks with Italian Prime Minister Matteo Renzi on Monday.

“The [US] President and [Italian] Prime Minister considered the developing situation and reiterated that any intervention under the guise of “humanitarian” assistance must be provided only with the formal, express consent and authorization of the Government of Ukraine,” the statement said.

In case Moscow proceeds with its plans to deliver humanitarian aid to the war-torn Ukraine without the authorization from the authorities in Kiev further sanctions are likely to be imposed in regard to Russia, according to the statement.

“They [Obama and Renzi] agreed that any Russian steps not in accordance with these requirements would be unacceptable, would violate international law, and would lead to additional sanctions,” the statement added.

In a telephone conversation with European Commission President Jose Manuel Barroso on Monday, President Vladimir Putin said Russia in cooperation with the International Committee of the Red Cross would send a humanitarian convoy to Ukraine.

Meanwhile Moscow’s calls for the evacuation of children from eastern Ukraine are not being answered, Russia’s UN envoy Vitaly Churkin said. He stated that over 1,200 orphans have been abandoned in the region, which is under continuous shelling from Kiev troops.

Churkin spoke at the UN Security Council (UNSC) meeting in New York on Friday.

The UN diplomats assembled to discuss a UN report on human rights in Ukraine. He blasted the document while conveying that children have had to remain in Donetsk after Kiev’s forces intervened into the region. According to Moscow, there are 1,223 orphans in the Donetsk and Lugansk regions.

“It seems that UN philanthropists believe that children rather thrive under fire,” Churkin stated. A bus carrying a group of 16 orphans seeking shelter was stopped at a Russian checkpoint in June.

Due to the ongoing fighting in the region, they were transferred to a Donetsk refugee camp, where they spent the night and were sent back to Ukraine on Kiev’s request. According to local authorities, an act stating that both sides had no objections was signed at the time.

The Organisation for Security and Co-operation in Europe (OSCE) has also stated its readiness to support the humanitarian efforts in Ukraine.

Swiss President and OSCE Chairperson-in-Office Didier Burkhalter welcomed the ICRC announcement that it would step up activities for the affected population in south-eastern Ukrainian regions and deploy additional teams there.

Russia, Egypt discuss Gaza

Russian President Vladimir Putin is due to meet with his Egyptian counterpart, Abdel Fattah Sisi, in the Russian resort city of Sochi to discuss a wide range of political and economic issues, including the ongoing Gaza conflict, Egypt’s food deliveries to Russia and Russian military exports to Egypt, according to the Kremlin.

“The discussion will address urgent matters, linked to the development of Russian-Egyptian relations in various spheres,” a Kremlin official said.

The leaders are expected to study in great depth a wide range of bilateral economic issues, such as the creation of a free trade zone between Egypt and the Russia-led Customs Union, which also includes Belarus and Kazakhstan.

“The last year’s trade turnover was roughly at $3 billion. In the first half of this year, [this figure] almost doubled [some $2.5 billion],” the Kremlin said.

Following its embargo on agricultural products from the United States and the European Union, Russia has been looking for alternatives, and Egypt said it was willing to boost its fruits and vegetables exports. In return, Russia could profit from Egypt’s high demand for wheat.

Moscow and Cairo are also discussing deliveries of Russia’s high-tech military products, including 24 Mikoyan MiG-29 fighter jets, as well as its Kornet anti-tank missile systems, attack helicopters Kamov Ka-25, Mil Mi-28 and Mi-25.

Russia and Egypt, which is brokering an end to the ongoing Gaza armed conflict, have been keeping in touch on the situation in this highly volatile region, with the Russian president praising Cairo’s efforts toward a long-term armistice between the Israeli and the Palestinians.

Last week, President Putin in a phone conversation with Abdel Sisi lauded Egypt for mediating negotiations between the warring parties. Both leaders agreed to “encourage a nationwide dialogue, aimed at settling contentious issues through political means,” according to the Kremlin.

Source: RIA Novosti

Germany, Switzerland oppose blind EU sanctions against Russia

German Foreign Minister Frank-Walter Steinmeier insists on continued talks with Russia over Ukrainian crisis resolution.

Trust between the West and Russia “is doubtlessly undermined seriously,” the German foreign minister said in an interview with German Sunday edition Frankfurter Allgemeine Sonntagszeitung published on Sunday. However, this should be realised that “without co-operation with Moscow this is hardly possible to reach a political solution in Ukrainian conflict,” he said.

Commenting on EU sectoral sanctions imposed on Russia, the minister added that EU states had different histories of co-operation with Russia “which determines their relations with Russia also in different ways.” Moscow may take retaliatory measures, therefore, “no one should be surprised that sanctions will take some costs.”

The Malaysia Airlines Boeing 777 airliner’s crash in Ukraine’s Donetsk region on July 17 has changed the situation dramatically, the German minister said. “But fury and indignation cannot and should not be the last say in foreign policy,” Steinmeier added.

Switzerland opposes blind duplication of EU anti-Russian sanctions. It will make Switzerland’s position weaker as a neutral-status country, said chief of the Swiss Federal Department for Economic Affairs, Education and Research.

Johann Schneider-Ammann said in an interview with Swiss newspaper Schweiz am Sonntag published on Sunday.

“This role will be weakened, if we duplicate EU sanctions,” Schneider-Ammann said, recalling that Switzerland presides in the Organisation for Security and Co-operation in Europe (OSCE) this year.

BP, Siemens, Renault face downturn on EU sanctions

BP Plc (BP/), Siemens AG (SIE) and Renault SA (RNO) are among European companies preparing for a downward turn in their Russian business following the European Union’s decision to impose its widest-ranging sanctions yet over President Vladimir Putin’s involvement in eastern Ukraine.

EU leaders announced plans yesterday to restrict the export to Russia of equipment to modernize the oil industry and forbid the sale of machinery, electronics and other civilian products with potential military uses. New arms contracts with Russia are also not allowed.

The sanctions will have a direct impact on companies like Siemens, which may no longer be able to sell oil equipment to Russia, and an indirect effect on many others like Renault, which expects the country’s auto market to contract more than 10 percent in 2014 as consumers hold back purchases. BP, owner of 20 percent of state-backed OAO Rosneft (ROSN), yesterday warned of risks to its profit and production due to the crisis.

“In Europe, for some companies this is becoming a major problem, and they can see it becoming an even bigger one,” said Andrew Kenningham, an economist at research firm Capital Economics. “The long-term impact of a standoff, if it continues, is clearly very bad for business confidence and future investment in Russia.”

Despite targeting oil production, the EU sanctions have steered clear of the natural-gas sector — leaving unscathed so far companies like BASF SE, the world’s biggest chemical producer, which gets about half its natural gas from state-controlled Gazprom, and other utilities like E.ON AG (TAG1Y) and RWE AG. On average, EU countries get 24 percent of their gas from Russia, according to Deutsche Bank — meaning that confronting Gazprom could result in supply cut-offs.

Source: Bloomberg

France, Germany, Italy block US sanctions on Russia

France, Germany, and Italy are among EU members who don’t want to follow the US lead and impose trade sanctions on Russia. US sanctions are seen as a push to promote its own multibillion free-trade pact with Europe.

“France, Germany, Luxembourg, Austria, Bulgaria, Greece, Cyprus, Slovenia, and EU President Italy see no reason in the current environment for the introduction of sectorial trade and economic sanctions against Russia and at the summit, will block the measure,” a diplomatic source told ITAR-TASS.

In order for a new wave of sanctions to pass, all 28 EU members must unanimously vote in favor. EU ministers plan to discuss new sanctions against Russia at their summit in Brussels on Wednesday, July 16. Even if only one country vetoed, sanctions would not be imposed. With heavyweights like France and Germany opposed to more sanctions the measure will likely again be stalled, the source said.

According to the source, the US sees slapping Russia with sanctions as a way to promote its own trade agenda with Europe, a side rarely explored in mainstream media. The Transatlantic Trade and Investment Partnership (TTIP) between the US and Europe would create the world’s largest free trade zone, but some worry it could balloon into an “economic NATO” or could end up putting corporate interests above national.

“Last year the EU and the US started difficult negotiations on a free trade agreement, which would force the EU into serious concessions, in particular, agricultural quality standards and regulation on genetically modified products. In this circumstance, restrictions against Russia will force EU countries to expand trade with the US,” the source said, citing shale gas as an example.

On June 20, Czech President Milos Zeman came out against sanctioning Russia, saying there is “no reason” to further “isolate” the country.

America was successful in getting Europe to toe its sanctions agenda at the height of the Ukraine crisis, but now Russia has removed its troops from the Ukraine border and promised peace in the region, Europe isn’t interested in further sanctions.

The EU initially followed the US cue when it imposed sanctions on Russia after the reunification of Crimea in March, but these measures were limited to politicians and businessmen. The EU unleashed a second round which expanded the list to over 72 individuals, who cannot enter the EU or access any assets there.

Russian officials maintain that sanctions are counterproductive, and will end up hurting the West more than they will Russia.

Another reason EU countries are wary of slapping Russia with economic sanctions is the possible spillover effect. Unlike the US, European countries rely heavily on Russia as a trading partner, especially for natural gas. The World Bank estimates that if sanctions escalate European gas prices could jump 50 percent.

Europe clearly has much more to lose by punishing its neighbor, with annual trade in goods and services worth $330 billion. American trade with Russia, by contrast is just a tenth of that at $38.1 billion.

Deals with UK-based BP, US-based Weatherford International, and ExxonMobil, continue to show that most countries continue to do business with Russia, politics aside.