Press review: Putin launches an operation to denazify Ukraine and its economic implications – Press review
MEDIA: Russia launches “special military operation” in Ukraine
On the morning of February 24, Russia officially launched a “special military operation” against Ukraine, intended, as Russian President Vladimir Putin explained, to “demilitarize” and “denazify” the neighboring state. The aim of the operation is to protect residents of the Donetsk and Luhansk People’s Republics (DPR and LPR), he said. Ukrainian authorities subsequently severed diplomatic ties with Russia, urging its partners to create an “anti-Putin” coalition against Russian troops entering Donbass and bombing military infrastructure across the country. The United States, a member of NATO and the European Union, as well as many other countries, have strongly condemned Moscow’s actions, while few countries have backed Russia unambiguously. Unprecedented sanctions will be imposed on Russia.
On the evening of February 24, the press service of the Ministry of Defense reported that DPR and LPR troops had advanced 6-8 km from the front line with the Ukrainian armed forces and that the armed forces Russians had completed all assigned tasks that day. . In addition, two Su-27 and two Su-24 aircraft, as well as a helicopter and four Bayraktar TB-2 UCAVs belonging to Ukraine were shot down, and 83 ground military infrastructure facilities of Ukraine were destroyed. decommissioned, writes Vedomosti. In addition, the press services added that the Russian armed forces had unblocked the northern Crimean channel and restored the water supply to the Crimean peninsula.
Experts interviewed by Izvestia estimate that the Russian army can complete the operation in five days. “That’s the baseline. That’s how long major activities should take outside of major cities. Judging by what’s happening now, [Ukraine’s] The eastern, central and southern regions can be liberated,” Center for Strategic Communications chairman Dmitry Abzalov told the newspaper. Meanwhile, the Kremlin did not provide a date, saying it would be determined by the Head of State, taking into account the current situation.
Until now, the question of when the DPR and LPR will liberate their territories within the borders of the Donetsk and Lugansk regions, as stated in their Constitutions, remains open, writes Nezavisimaya Gazeta. “For Russia it is extremely important to liberate not only Donbass from the occupation forces of the Kiev regime, but also the entire left bank of Ukraine, as well as its Black Sea regions. Dnepr, Zaporozhye, Mariupol , Odessa, Ochakov, Nikolaev, Kherson and other cities that have industrial and defense enterprises essential to the Russian Federation. If they are controlled by Moscow, it means that Russia has defeated the West and taken out its Slavic partner from the sphere of influence of the United States and NATO,” retired military expert Colonel Nikolay Shulgin told Nezavisimaya Gazeta.
MEDIA: Russian stock market crashes amid military operation and series of Western sanctions
The West responded to the Russian military operation in Ukraine with a chorus of condemnation, reacting to it with a new round of sanctions, affecting the country’s largest state-owned banks and a number of private credit organizations. The US, UK, Canada and other countries are also considering other options, ranging from terminating Schengen visas for Russians to disconnecting the country from the SWIFT system. Analysts say extreme measures are still unlikely. For now, the restrictions will focus on the energy and banking sectors. Meanwhile, politicians and pundits have assured that Russia is well prepared for these possible restrictive measures and has a certain cushion.
US President Joe Biden has announced sanctions against several major Russian banks, namely VTB, Otkritie, Novikombank and a private bank, Sovcombank. All US financial institutions have been ordered to close their correspondent accounts at Sberbank within 30 days, the US Treasury Department said. At the same time, 11 state-owned companies (several state-owned banks, Gazprom, Gazprom Neft, Transneft, Rostelecom and others) were prevented from entering the US capital market. This list also includes the private Alfa-Bank and the Credit Bank of Moscow.
The UK has also imposed sanctions on VTB, which include freezing assets in the country. Biden said the sanctions were also intended to limit Russia’s ability to settle in dollars, euros, pounds and yen.
None of the experts previously interviewed by Vedomosti expected a military scenario, considered unlikely, so it is still difficult for analysts to provide accurate forecasts. No one expected such events, “given the response of Western countries in the form of severe economic sanctions and thus significant damage to possible measures for the Russian financial sector”, write analysts from Raiffeisenbank.
Current developments will also affect Western markets, Tinkoff Investments analyst Kirill Komarov told Vedomosti. Sanctions against Russia could have a boomerang effect on European economies and could also lead to higher commodity prices. Further supply chain failures are possible, leading to further inflation and risks to GDP growth, Komarov concluded. The Russian economy will suffer severe damage leading to high inflation, Alfa Bank chief economist Natalia Orlova told the newspaper. Moreover, according to her, economic growth will slow considerably or not happen at all.
The Russian stock and currency market crashed on Feb. 24, with major indices falling 45-50%, and the ruble devalued against the dollar and euro, approaching 90 and 101 rubles respectively. Experts interviewed by Izvestia admit that it is difficult to predict the behavior of the markets and try to guess the “bottom”. According to their estimates, a further drop in the MOEX index of 20-30% to 1,250-1,500 points is very real. There is less panic in the forex market than in the stock market, but further weakening of the ruble is inevitable, analysts say.
Meanwhile, the Federation Council told Izvestia that sanctions against Russia are expected, the country has a safety net that will help it deal with them. “We assumed that there would be measures, there is nothing unexpected for us there,” the first deputy chairman of the Federation Council’s Foreign Affairs Committee, Vladimir Dzhabarov, told the newspaper. , “I believe that our country, judging by the declarations of the officials, the government, and the financial structures, is ready”, he added.
Vedomosti: America will not fight for Ukraine
Foreign supporters of Ukraine reacted to Russia’s operation to protect residents of the Donetsk and Luhansk People’s Republics (DPR and LPR) mainly with political comments and threats of sanctions, writes Vedomosti. On the evening of February 24, US President Joe Biden declared that the US military would not be involved in the conflict with Russia. But the United States and its allies intend to impose sanctions against Russia, which will affect the restriction of imports of high-tech products and the banking sector.
European Council President Charles Michel and European Commission President Ursula von der Leyen demanded that Russia respect Ukraine’s territorial integrity. German Chancellor Olaf Scholz also expressed solidarity with Ukraine, French President Emmanuel Macron also condemned Russia. But not all international partners have come forward to condemn Russia’s actions. In particular, Foreign Ministry spokeswoman Hua Chunying refused to call the events in Ukraine a Russian “invasion” during a briefing.
The consequences of Russia’s actions against Ukraine in terms of international politics will not last “forever, but in the long term”, said Dmitry Stefanovich, a researcher at the Center for International Security at the Institute of World Economy. and International Relations, at Vedomosti. At the same time, statements by international leaders show that NATO intervention is excluded, the expert believes.
Russia needs to prepare for a new sanctions package, says program director of the Russian Council for International Affairs Ivan Timofeev. It will be a priority issue for the US Congress next week, he noted, and the European Union is likely to introduce restrictions similar to those in the United States.
Vedomosti: Germany freezes Nord Stream 2 gas project
New US sanctions against Nord Stream 2 have halted the launch of the much-talked-about gas pipeline, according to German Economy Minister Robert Habeck. He stressed that Berlin’s decision to end certification of the pipeline was unrelated to sanctions. The project’s risks increased significantly after Russia recognized the independence of the Donetsk and Luhansk People’s Republics (DPR and LPR) on February 21, writes Vedomosti.
Maria Belova, research director at Vygon Consulting, noted that the freezing of major gas projects is extremely rare for Russia. In theory, Gazprom can challenge the decision, as it is linked to the actions of German authorities, Art de Lex’s lawyer, Marat Samarsky, told the newspaper. “Another question concerns the prospects for such a trial and the arguments of the parties, as well as the question of which interests for the EU – political or economic – will prevail here,” the lawyer said.
Samarsky noted that Gazprom, for its part, did everything possible to launch the project and complied with the demands of German regulators. Therefore, the foreign partners of the project – European energy majors Uniper, Wintershall Dea, Shell, OMV and Engie, according to the lawyer, have no reason to demand any compensation from Gazprom itself.
Nezavisimaya Gazeta: China walks the tightrope of the Russian operation in the Donbass
China’s permanent representative to the United Nations, Zhang Jun, neither endorsed nor condemned Russia’s actions at a Security Council meeting, but called for a peaceful resolution to the conflict. Experts told the newspaper they believe that despite any resolution on Ukraine, Russia’s dependence on China will only grow.
The director of the Institute of Asian and African Studies at Moscow State University, Alexei Maslov, told the newspaper that “China has not changed its position on Ukraine. China will not participate in no military operations and will not make any harsh statement condemning Ukraine”. is beneficial for China that Russia further expands its market for Chinese products. Taking into account the events around Ukraine, China is also calculating its economic strategy. It is extremely important for them not to damage good relations with Europe – after all, trade with in 2021 it amounted to almost 800 billion dollars.”
China can expand investment cooperation with Russia. “However, Russia will have to give guarantees against non-payment of debts in the form of shares of the largest Russian companies. China can profitably increase the supply of mobile communications and high technologies to Russia and can also increase purchases of oil and gas. But Moscow’s negotiating position on supply prices is falling,” the expert added.
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