© AP Photo/J. Scott Applewhite/TASS

Top stories from the Russian press on Friday, July 22nd, prepared by TASS

Izvestia: Ankara hopes Russian-Ukrainian grain talks to be followed by dialogue on peace settlement

Turkey expects that Russian-Ukrainian talks on grain may lead to a renewed dialogue along political lines, the country’s parliament told Izvestia. According to Turkey’s presidential administration, a document on the grain issue will be signed in Istanbul on July 22 at 16:30 Moscow time. The UN Secretary General’s office said that Antonio Guterres had already left for Turkey. Meanwhile, Kiev’s representatives have already submitted their roadmap on grain exports.

Program Director at the Valdai Discussion Club Oleg Barabanov told Izvestia that Russia may raise the issue of confidence with the Turkish side. "On the other hand, it is necessary to understand that this grain will mainly go to Turkey. Ankara has a commercial interest in the normal functioning of this channel. It is hardly in their interests to risk it over possible arms supplies," the expert noted.

Turkish political scientist Onur Sinan Guzaltan noted that the grain initiative is an important step towards peace in the region. He added that the agreement on grain would prevent external provocations by such countries as the US. The expert pointed out that in this context it is important for Moscow and Kiev to accept Ankara’s mediation since the three countries are neighbors and need stability in the region, therefore, they should develop regional solutions against provocations by the West.

Barabanov also thinks that the possible relaxation of EU sanctions is not directly linked to the prospective grain agreement between Russia and Ukraine. "The European Union has simply realized that it went too far with sanctions against food products. Or, rather, their fear of getting entangled with Russian trade vessels, freighters and insurers, so as to, God forbid, not to get sanctioned, led to a number of problems. Now they understand that their decision impacts global food security. And on some issues they will backpedal as it has already happened with Kaliningrad," the expert asserted.

Izvestia: How relaunching Nord Stream 1 will impact the market

The price of gas in Europe may continue dropping to $1,000-1,200 per one thousand cubic meters against the background of the relaunched Nord Stream 1, according to experts polled by Izvestia. On July 21, amid the news of Nord Stream’s renewed operations, gas prices in Europe started trading at $1,580 which was lower by more than 3% than on July 20 yet by 18:00 Moscow time they rebounded to $1,611. Gas deliveries over Nord Stream reached the pre-maintenance levels which is about 40% of its maximum capacity, according to the project’s operator Nord Stream AG. Until all turbines are serviced, the pipeline will be able to operate at 60% capacity at the most and won’t reach its full capacity earlier than late autumn, the experts think.

According to Finam analyst Sergey Kaufman, if there are no new shocks with gas supplies from Russia, it is expected that for the next couple of months gas prices will gradually return closer to the $1,000 benchmark. Dmitry Alexandrov of IVA Partners thinks that gas will continue to get cheaper albeit insignificantly since the EU’s current stock is not substantial enough to not to worry about problems in the winter and the pipeline has not reached its full capacity.

In order for it to reach its full capacity in late fall, written guarantees are needed from Western partners that all the turbines will be repaired and shipped back to Russia, according to leading expert of the National Energy Security Fund Stanislav Mitrikhovich. Head of the analytical department of AMarkets Artyom Deyev concurs saying that it’s not enough to get the turbine back, it also needs supporting documents permitting its use and confirming its maintenance is in compliance with international requirements. "The issue of scheduled repairs of other units - there are five of them - still hasn’t been resolved. Siemens did not specify the timeframe of the repairs, and as a result, out of eight Nord Stream gas turbines only two are functioning. There will be three of them when the turbine from Canada is received next week," the expert said.

Alexey Grivach, Deputy Director General of the National Energy Security Fund concurs: "Some sort of agreement is needed which will return the situation with Russian gas supplies to the legal field which provides for mutual, not unilateral, compliance with commitments."

According to Deyev, currently the pipeline may not be launched at its full capacity until the beginning of the heating season in Europe. And, given the current anomalously hot weather there, the situation with filling storage facilities remains critical, BitRiver Financial Analyst Vladislav Antonov added.

Nezavisimaya Gazeta: Pelosi pushing Biden to revive bid to label Russia ‘sponsor of terrorism’

US House of Representatives Speaker Nancy Pelosi has practically presented an ultimatum to the administration of her fellow party member Joe Biden: either the executive branch declares Russia a ‘sponsor of terrorism’ or the legislative branch will do so. At least, this is how American media outlets recounted her conversation with US Secretary of State Antony Blinken. Placing Russia on an equal footing with Cuba, Syria, North Korea and Iran would very likely mean the severing of diplomatic ties between Russia and the United States. However, the White House may not go for it. It is not excluded that Pelosi’s initiative has been triggered by the upcoming elections.

Senior Research Fellow at the Russian Academy of Sciences’ Institute for US and Canadian Studies Vladimir Vasilyev in his commentary for the newspaper suggested that this initiative had been coordinated with the White House and can be explained by two factors. First of all, Biden’s team thinks that current anti-Russian measures did not have the desired effect and decided to raise the stakes. Besides severing diplomatic relations, the Americans then can easily confiscate Russia’s frozen currency reserves which amount to about $300 bln.

Secondly, Biden wants to return Ukraine to the American media airwaves before the midterm elections in November, "Currently, the domestic US agenda remains the top American news. Biden is being criticized for economic failures and his toughness with regards to Russia goes seemingly unnoticed. Yet, if the issue of declaring Russia a state sponsoring terrorism is raised in Congress, Ukraine will return to the American information field. Moreover, September 11, the anniversary of attacks on the Twin Towers is coming up soon," the expert said.

If the speaker’s ultimatum has a pre-election nuance, it is explainable why the White House entrusted precisely Pelosi to present it. In a way, she is a kamikaze politician. She will most likely cease to be the speaker after the elections so she is not afraid of being accused of pre-election populism. "Currently, a struggle is underway among the US leadership whether or not to sever ties with Russia. As opposed to the lackluster Biden who is wary of sudden moves, Pelosi thinks she has nothing to lose," Vasilyev says.

Vedomosti: Italy faces early election, potential right-wing victory

After taking a second stab at resigning, Italian Prime Minister Mario Draghi has stepped down. On July 21, the country’s President Sergio Mattarella accepted his resignation. Now Italy is heading towards early elections this September instead of March 2023.

A change in Italy’s leadership will mean more for Brussels than for Moscow, Director General of the Russian International Affairs Council Andrey Kortunov asserts. Following Draghi’s departure, right-wing parties will gain strength and their coalition may come to power. Draghi’s government united almost all spectrums represented in the parliament and was essentially non-partisan. Considering that Italian right wingers have a Eurosceptic stance, this situation might rattle the EU leadership, the expert explains.

According to him, Draghi’s successors are likely to continue his policy with regards to Moscow rather than reconsider it.

Professor at MGIMO’s Department of Diplomacy Tatiana Zonova concurs that the right-wing parties will play an important part in the early elections. According to her, they hope to gain 40% of the seats and form a government. The expert notes that the current political crisis was caused by strong intra-party differences and the ambitions of the right-wingers. The largest party at the moment, the Five Star movement, is on the verge of breaking up while the overall situation in the country is difficult, since Italy is hit by soaring inflation. The expert added that if right-wing parties win in Italy, one shouldn’t expect them to suddenly turn towards Russia.

Kommersant: European Central Bank toughens its monetary policy

The European Central Bank (ECB) has raised key rates for the first time in the last 11 years and by 0.5 percentage points at once which pulled the deposit rate out of the negative zone. The toughening of the monetary policy which was twice as high as previously expected was caused by the continued rise of the Eurozone’s inflation - in June it soared to 8.6%.

Earlier, the ECB had refrained from raising the rates for a long time over the debt crisis in the Eurozone, low inflation and the pandemic. The future rates of the ECB’s toughened policy will depend on the state of the economy in Europe. So far, the regulator only registers a decrease in business activity yet does not anticipate a recession neither this year, nor the next year. Experts, however, think that the period of increased rates won’t be long.

"An acceleration of the rates indicates that the bank is wary that the ‘window’ for toughened policy will close soon," the ING Bank told the newspaper. It noted that the decision won’t have an immediate impact on inflation. Prices are more likely to go down over the risk of a recession.

"With inflation currently at 8.6%, the growth of the rate from 0% to 0.5% is unlikely to be palpable, prices are more likely to react to slowing demand over high inflation, the toughened loan conditions at banks and the general uncertainty," Investment Director at Loko-Invest Dmitry Polevoy thinks. He notes that core inflation which amounts to 3.7% is almost double the goal of 2%, while long-term inflation expectations remain near 2%. Considering the state of the Eurozone’s economy, due to recession risks the space of opportunity to raise the rate may be narrower than markets think who allow for raising the rate by 1.5% in the next year and a half.