Top stories from the Russian press on Tuesday, May 17th, prepared by TASS
Nezavisimaya Gazeta: Hungary’s oil needs force EU to truncate sixth package of sanctions
The Council of EU Foreign Ministers in Brussels admitted that the upcoming, sixth package of sanctions against Russia will be truncated, without an embargo on the supply of Russian oil due to Hungary's unyielding position. Budapest is determined to extract the most favorable concessions from the European Union in exchange for agreeing to support anti-Russia sanctions. However, Hungarian Prime Minister Viktor Orban is unlikely to slow the process of imposing further sanctions on Russia, Nezavisimaya Gazeta writes. Regardless of Hungary's stance, the majority of EU members will wean themselves off Russian oil by the end of the year.
On May 16, Hungarian Foreign Minister Peter Szijjarto revealed that no agreement had been reached. He reiterated that the Hungarian economy is extremely reliant on Russian oil, and that the embargo on its supplies would cause major issues, and he added that Hungary does not reject anti-Russian sanctions in general. The Hungarian stance, according to Lithuanian Foreign Affairs Minister Gabrielius Landsbergis, is holding the European Union hostage. Landsbergis was the sole minister to openly denounce Hungary. In general, EU officials are attempting to avoid dramatizing the situation.
Associate Professor of the Department of Integration Processes at MGIMO Alexander Tevdoy-Burmuli believes the Hungarian veto cannot be regarded as something insurmountable. "We can assume that Hungary will eventually transform anger into mercy, having received a concession within another negotiation track," the expert told Nezavisimaya Gazeta.
Another negotiation point for Hungary is now linked to the penalties that the EU is imposing on it. Hungary and Poland lost a lawsuit in an EU court in February against a mechanism that ties funding from the EU's common budget to "democratic standards". Budapest was facing the loss of 22 bln euro, yet the amount that Sijjarto announced earlier - 15-18 bln euro - looks like compensation for these losses.
Meanwhile, Bloomberg, citing sources, claims that the German government intends to abandon Russian oil by the end of the year, even if the sixth package is rejected.
Nezavisimaya Gazeta: Lukashenko urges CSTO leaders to join Russia-NATO standoff in Ukraine
On May 16, Moscow hosted the anniversary summit of the Collective Security Treaty Organization (CSTO). The leaders of the member states of the organization signed multilateral documents, including the anniversary statement of the CSTO Collective Security Council. At the suggestion of Russian President Vladimir Putin, the CIS will receive observer status at the CSTO. In private, he discussed the situation in Ukraine with his colleagues, Nezavisimaya Gazeta writes.
The attendees noted the significant role of the CSTO and peacekeeping forces in quashing the January insurrection in Kazakhstan, and also assessed the global situation and the topic of NATO’s expansion. President Alexander Lukashenko of Belarus noted that the members of the organization do not have unity. Some of them support the West’s actions against Moscow. He stated that "Russia should not fight alone against the expansion of NATO."
Director of the East-West Strategy analytical center Dmitry Orlov told Nezavisimaya Gazeta that the CSTO is still not active enough. "In general, the CSTO still justified itself, but with some nuance. Not all members of the organization quickly and unconditionally decided to participate in peacekeeping missions. In particular, Kyrgyzstan argued for a long time whether to send their military to quell the protests that erupted over economic problems. The CSTO showed that the only guarantor of the security of the Central Asian region is Russia, because it had the largest contingent," the expert said, adding that the post-Soviet security bloc did not become a serious alternative to NATO.
However, the organization may have a future, Belarusian Defense Minister Viktor Khrenin predicted the expansion of the association. According to him, the number of participants will increase to dozens of countries.
Kommersant: Russia's Arctic Council chairmanship under fire over operation in Ukraine
This week marks the end of the first year of Russia's two-year chairmanship in the Arctic Council, an intergovernmental organization that has been dubbed the "shadow government of the Arctic". The results for Moscow are "deplorable", Kommersant writes, but this is not directly related to the Arctic. To protest Russia’s military operation in Ukraine, work in the Arctic Council was suspended by seven of the eight countries in the organization. While Russia continues to implement its program alone, the Western Arctic states are considering whether it is still possible to salvage the council created in the mid-1990s, or is it time to create a new one without Russia.
Against Russia’s military operation in Ukraine, work in the council was frozen by seven countries. That is, everyone except Russia itself: Denmark, Iceland, Canada, Norway, the United States, Finland, and Sweden. The Russian Foreign Ministry called the position of the Western member countries of the Arctic Council "politicized and clearly irrational."
Lately, Russian officials have increasingly expressed concerns about the possible transformation of the Arctic from a territory of cooperation into another hotbed of conflict. Especially due to the recently launched process of Finland's and Sweden's accession to NATO. Western countries, on the contrary, accuse Russia of militarizing the Arctic and hold it responsible for the rising conflict potential in the region.
In any case, all members of the Arctic Council now face the question of the future of this organization. On the one hand, officials from a number of Western Arctic countries have made it clear that they would like to return to work with Russia in this format in the future. On the other hand, representatives of the Western Arctic countries have been discussing what to do if their standoff with Russia over Ukraine drags on. The seven-member organization could carry on without Russia’s direct participation, which would maintain contact through the the council’s secretariat. Official representatives of the seven countries, however, have not yet spoken about a new organization without Russia, at least publicly.
Izvestia: Who will get McDonald's assets in Russia
A large Russian restaurant holding may buy McDonald's, which will close the deal with the help of a bank and the state, Izvestia's market source said. On May 16, it was reported that the US-based fast food chain is selling its business in the country. The new owner will rebrand, but will keep the menu close to the previous one. However, the new owner may have difficulties with rent, since it may be raised, which may lead to growing price of meals, experts believe.
After more than 30 years in the country, the fast food restaurant chain has decided to sell its business in Russia, and the process has already begun, McDonald's said on May 16. The new owner will not have the right to use the logo, name, trademark, or traditional names from the menu.
The company’s intellectual property is protected, and if local buyers do not violate the agreement, they will have to make changes to the company: change the menu, the names of meals, their recipes, and so on, Restcon CEO Elena Perepelitsa told the newspaper.
A restaurant market source told Izvestia that equipment, technologies and contracts with food suppliers will be transferred to the new owner. The new brand will be as similar as possible to McDonald's, and the names of the dishes will be close to the usual menu items of the chain, the source believes.
"The question is what is being sold, since McDonald's does not want to leave either the brand or recipes. It seems like real estate and infrastructure are being sold, so the price can have a big discount," a source from a consulting company told Izvestia.
Another source suggested that the buyer may be a large Russian restaurant holding, which will close the deal with the help of the bank and the state.
However, Perepelitsa did not rule out that as soon as Russia is freed from sanctions that hinder McDonald's production process, the company will be able to return to the country. Presumably, this will happen in 5-10 years, she believes.
Izvestia: Russia might revive Soviet-era car as Renault exits
The automaker Renault has transferred its Russian assets to state structures with the right to buy its former share within six years. Lada car production will continue at Togliatti, and the Soviet-era Moskvich brand will be revived at the company's Moscow plant. Experts warned Izvestia that in order to preserve output at these plants, the authorities must immediately find new partners.
Renault’s Russian assets are being transferred to state ownership, according to the Ministry of Industry and Trade's press service. Renault Russia became fully controlled by the Moscow government, 67.69% of AvtoVAZ shares were transferred to the ownership of the Russian Federation, while the state corporation, Rostec, kept the remaining 32.31% of shares.
Experts believe that transferring assets from the Moscow Renault plant to the local authorities will help maintain social stability. However, they argue that technological collaboration with KamAZ is insufficient for a full-fledged resumption of automobile production at the capital's enterprise. According to independent automotive industry specialist Sergey Burgazliev, a production volume of 50,000-60,000 vehicles per year is sufficient for this car plant to be profitable. Even with the potential introduction of Kama electric vehicle manufacturing there, he feels it will be difficult to attain such numbers.
"A strategic partner is needed for the plant." For example, Chinese crossover and pickup manufacturers with whom KamAZ has previously negotiated," Burgazliev told Izvestia.
Meanwhile, the Ministry of Industry and Trade anticipates that car production under the Moskvich brand will begin before the end of the year.
