Brussels formally recommends the start of EU accession negotiations with Ukraine and Moldova; the US is seeking ways to transfer frozen Russian assets to Kiev; and the Central Bank of Russia weighs in on the future of artificial intelligence in the finance sector. These stories topped Thursday’s newspaper headlines across Russia, according to TASS news agency
Izvestia: Brussels formally recommends start of EU membership talks with Ukraine, Moldova
The European Commission issued a recommendation that Ukraine and Moldova begin membership negotiations with the EU, while Georgia may be granted candidate status in December. However, even the formal launch of such talks does not guarantee anything, as illustrated by the case of Turkey, which has been conducting EU accession talks since 2005, Izvestia writes. Furthermore, experts interviewed by the newspaper said they foresee future conflicts potentially emerging between Kiev and Brussels.
Experts believe that joining the EU is not a real possibility for Ukraine in the near future, but the accession negotiations themselves may serve as a means of pressuring Kiev while the military conflict continues on Ukrainian soil, political scientist Boris Mezhuev believes. According to him, initiating a peace process with Moscow may become one of the bargaining chips for bringing talks with Kiev about potential EU membership to a new level. Even so, the entry requirements for Ukraine remain rather ambiguous.
Moreover, the expert told Izvestia, he believes another issue could come into play. Following the end of hostilities in Ukraine, discord may emerge between Kiev and Brussels. Ukraine will then be a post-war society with a very strong national identity and very weighty claims toward Europe, including an inclination to take a deeper look into how much military assistance the EU actually provided, or promised but failed to deliver on. All of this would make the integration process that much more difficult.
The European Commission's recommendation accurately reflects the existing situation in the context of the Ukrainian conflict. After the clear failure of the Ukrainian counteroffensive and the emergence of a public debate in the media about the Ukrainian military's ability to advance on the battlefield, the country's population and some of its elites need additional external incentives to motivate them to continue fighting the Russian forces, Artyom Sokolov, researcher at the Center for European Studies at the Moscow State Institute of International Relations (MGIMO University), told the newspaper.
"All this is intended to show that they (the EU - TASS) are not abandoning Ukraine; that despite the failures of the Kiev government, the country still has support from EU member states, which are even prepared to see Ukraine join their ranks one way or another," Sokolov said.
Media: US unlikely to hand frozen Russian assets over to Kiev, or return them to Moscow
While Democrats and Republicans in the US Congress cannot agree on allocating additional military aid for Kiev, conservative Republicans in the lower chamber House of Representatives have proposed another means of helping Ukraine, namely by transferring some of Russia's frozen foreign assets to Kiev. While other Western countries are also considering such a move, thus far no specific steps to transfer frozen Russian funds have been taken. Against the backdrop of US legislative initiatives, the Group of Seven (G7) adopted a decision on Russian sovereign assets, agreeing that no frozen funds should be released to Russia until Moscow pays compensation to Kiev for damage caused by the armed conflict.
Thus far, the only thing that Kiev's Western partners have agreed on regarding Russian sovereign assets is that they should be completely frozen until Moscow agrees to pay Ukraine compensation for damages caused during the conflict. The G7 countries reached this conclusion on November 8, according to a joint statement issued by their foreign ministers during a two-day summit in Tokyo, Kommersant writes.
According to analysts interviewed by Izvestia, however, the US is unlikely to transfer frozen Russian assets to Kiev but may tap the funds itself. According to analysts’ estimates, no more than 10% of the funds may end up specifically in Ukraine. Bogdan Bezpalko, a member of the Russian Presidential Council for Interethnic Relations, told the newspaper that the money would not be transferred to Ukraine, but instead would be directed toward paying down Ukraine's debt to the United States. There is also the possibility of using it to pay for supplies of military equipment, but the money would still very likely be spent in the United States, he believes.
Meanwhile, Vladimir Vasiliev, chief research fellow at the Institute for US and Canadian Studies, believes that such legislative maneuvers in Congress reflect an effort by the US to avoid having to hold discussions about the return of frozen funds to Russia. "None of the [Russian] financial assets that were frozen in the United States currently exist. They were all stolen and directed toward other purposes related to the general economic situation in the US. The US will not agree to return these assets to Russia under any circumstances. This is not in Washington's current interest and would run counter to its entire strategy," he told Izvestia.
Izvestia: US trying to put together coalition on Korean Peninsula
The US is strengthening its alliance with South Korea against North Korea and Russia's partnership with China. Secretary of State Antony Blinken visited South Korea for the first time in 2.5 years against the backdrop of the G7 foreign ministers' summit in Tokyo, the main purpose of which was to remind the world of the existence of Ukraine, Izvestia writes. According to experts, the US is trying to strengthen its position in the region in order to oppose not only North Korea, but also the Russia-China alliance.
Given the recent negotiations between Russian President Vladimir Putin and North Korean leader Kim Jong Un, as well as the recent visits to Pyongyang by Russian Defense Minister Sergey Shoigu and Foreign Minister Sergey Lavrov, Washington and Seoul believe that the parties are increasing military cooperation, the newspaper writes. Specifically, the allies have cited the passage of ships between the ports of the two countries, which they believe were carrying containers full of weapons. Although the contents of such containers could not be determined, the US believes that North Korea is sending weapons to Russia for use in Ukraine.
"The visit to South Korea should certainly be interpreted as a signal to China. The US is putting pressure on Beijing through Taiwan, South Korea and Japan. The purpose is to show that the US has its finger on the pulse and that South Korea is an indispensable strategic ally in the Asia-Pacific region," Kirill Kotkov, director of the Center for the Study of Far Eastern Countries in St. Petersburg, told Izvestia.
"Seoul doesn't really want to get involved in this confrontation between blocs, because it has earned healthy profits from trading with Russia," Alexey Maslov, director of the Institute of Asia and Africa at Moscow State University, told Izvestia. He also believes that the G7 foreign ministers’ summit in Tokyo is simply an attempt to refocus flagging international attention back on Ukraine.
Nezavisimaya Gazeta: Central Bank of Russia weighs in on future of AI use in finance
Artificial intelligence is becoming a basic technology comparable to steam engines or electricity, Bank of Russia Governor Elvira Nabiullina said at the Finopolis financial technology forum. But the technology also poses significant threats to the financial system, according to a recent report by the Bank of Russia. For the time being, however, the regulator will not go after artificial intelligence "with fire and sword," Nezavisimaya Gazeta writes.
According to Boris Kopeikin, first deputy director of the Center for Strategic Research, any innovation in the financial market requires an assessment by the regulator. "AI technologies are developing rapidly, they are already being actively used by financial institutions and will undoubtedly become more widespread in the near future. The Central Bank now states that there is no urgent need for any special regulation of AI. However, based on the results, it does not rule out the possibility that [such regulation] will be necessary in the future," the expert told the newspaper.
In general, the process of automating decision-making on the basis of AI currently does not violate the Bank of Russia’s existing regulatory standards. "As soon as the use of AI goes beyond the scope of regulatory requirements, or precedents appear related to the implementation of the risks of using AI in the banking sector, the Bank of Russia will, of course, take additional measures for standardization and regulation," Denis Perepelitsa, professor at the Plekhanov Russian University of Economics, told Nezavisimaya Gazeta.
Nevertheless, some members of the financial community remain optimistic. The implementation of AI and broader process automation is not only desired by the industry, but also necessary, Alexey Lazutin, general director of Mosgorlombard, noted. Such tools, he believes, are equally relevant for financial market players who have previously operated primarily offline.
Kommersant: Russian state nuclear power giant Rosatom gains control over shipper FESCO
The Russian government has transferred shares in the Far Eastern Shipping Company (FESCO), seized from FESCO shareholders, to state nuclear power corporation Rosatom. The state nuclear corporation has been preparing to take control of FESCO-owned Vladivostok Commercial Port for three years, but its cooperation with FESCO has been limited. Rosatom's plans for the new asset are thus far unknown, Kommersant writes.
Shares in FESCO (constituting a 92.4% stake) were seized by the state in early 2023 after FESCO co-owner Ziyavudin Magomedov, who had been detained since 2018, was sentenced to 19 years in a maximum security prison on December 1, 2022.
To date, Rosatom's cooperation with FESCO has focused primarily on the transportation of equipment for Rosatom projects by a FESCO subsidiary and the creation of a transport and logistics hub at the Port of Vladivostok for container transportation along the Northern Sea Route with an investment of 18 bln rubles ($195.6 mln).
According to Inna Chalchenkova, managing partner at infrastructure industry expert center HeadWork Analytics, given the country's "specific geographical location and the state corporation's status as the owner of the only nuclear icebreaker fleet in the world," bringing FESCO into its portfolio would allow it to "take advantage of the positive effect of a significantly shorter route through the Arctic."
At the same time, the nationalization of FESCO is constantly being challenged in other countries. The Magomedov brothers filed a lawsuit in a UK court against FESCO's former executives, current and former shareholders, Transneft and Rosatom, accusing them of a "global conspiracy" to transfer their assets to government agencies and themselves. But, even if the plaintiffs win this case under English law, the transfer of FESCO to Rosatom will not be reversed, lawyers say.
"At the moment, it's difficult to imagine anyone in Russia challenging the transfer of assets on the basis of a presidential decree," Maria Lyubimova, a partner at Regionservice, told the newspaper.
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