Russia weighs countermeasures to US missile deployment in Germany; newly re-elected European Commission President Ursula von der Leyen vows to militarize the EU; and Joe Biden may use his COVID diagnosis as an excuse to withdraw from the US presidential race. These stories topped Friday’s newspaper headlines across Russia, according to TASS News Agency.
Izvestia: Russia weighs countermeasures to US missile deployment in Germany
The Alternative for Germany faction may hold an extraordinary meeting of the Bundestag to discuss US plans to deploy missiles in Germany in 2026. The deployment could lead to a serious escalation of tensions across Europe because Russia will certainly not just sit back and watch as its national security is threatened. The Russian Foreign Ministry suggested that Moscow could roll out its own nuclear-capable systems in response, Izvestia writes.
The German authorities say that no decision has been made yet on where to station the US missile systems; however, they point out that these will be conventional weapons. Experts believe that they will include Typhon and Dark Eagle systems. The Typhon advanced mobile missile launcher is designed to fire the SM-6 standard missile, which has a range of up to 450 kilometers, while the new version has a range of up to 700 kilometers. It is also capable of launching Tomahawk cruise missiles with a range of up to 1,800 kilometers, Dmitry Kornev, editor of the MilitaryRussia website, specified. Thus, the Americans will be able to target parts of Russia that are in Europe from Germany as the distance between Moscow and Berlin is about 1,500 kilometers. SM-6 missiles also pose a threat as they can reach Russia’s westernmost Kaliningrad Region. Besides, all systems planned to be deployed in Germany will be mobile and it will be possible to move them to any other NATO country, including Finland and the Baltic nations.
"We have the means to counter such missiles. Of course, no one is guaranteeing that every missile will be downed but we have weapons capable of hitting the deployment sites of launchers," military analyst Colonel (Ret.) Viktor Litovkin said. He stressed, however, that Russia would not strike first because "this is not our goal." "A new ballistic missile with a range of up to and over 1,000 kilometers is highly likely to be created on the basis of engineering and operational practices of the Iskander-M missile system," Kornev maintained.
The White House’s plans to deploy missiles in Germany result from the failures that the US is facing in implementing its Ukraine policy. It seems that the West is doubling down on efforts to deter Russia, Dmitry Stefanovich, a researcher with the Center for International Security at the Russian Academy of Sciences’ Institute of World Economy and International Relations, pointed out. Meanwhile, the US stationing missiles in Germany does not mean that the White House is ready to downgrade diplomatic relations with Russia because this could set off a chain of escalation that no one is ready for, Sergey Oznobishchev, director of the Institute for Strategic Assessments, emphasized.
Media: Newly re-elected European Commission president von der Leyen vows to militarize EU
European Commission President Ursula von der Leyen has been re-elected for another five-year term. She pledged to focus on building a true European Defense Union, while continued support for Ukraine is, in her view, the best investment in European security, Vedomosti writes.
The European Union’s foreign policy strategy will not change. "Brussels will continue to pursue a course to contain Russia and provide military and financial assistance to Ukraine," Vladislav Belov, deputy director of the Russian Academy of Sciences’ Institute of Europe, noted.
Von der Leyen and her team are ardent advocates of supporting Kiev, so they should not be expected to change their policy towards Ukraine and sanctions, Alexander Kamkin, senior researcher at the Russian Academy of Sciences’ Institute of World Economy and International Relations, agrees. "Even if the US reduces assistance to Ukraine in case Donald Trump wins [the presidential election], it will not affect this policy. On the contrary, the Europeans will see this as a reason to increase support for Kiev," the expert noted. Kamkin suggests that for that purpose, EU bureaucrats will try to pry more funds out of EU member states. "Naturally, European citizens will be less than thrilled about this. Certain countries, namely Hungary and Slovakia, will likely try to throw a wrench in the process, putting on full display the deep divide that exists within the EU on the Ukraine issue," the expert explained.
Belov does not expect the EU to make any great strides in creating a European defense union. In his opinion, Brussels will rather seek to boost cooperation within the European defense industry as part of efforts to militarize the economies of member states.
French political scientist Nikola Mirkovic told Izvestia that von der Leyen is an Atlanticist who subscribes to the idea that US hegemony keeps global order. Speaking of the Americans, the analyst said that they are all for the EU becoming more military-oriented, as this aligns with their interests. However, wars are expensive and the EU will find it very difficult to build a defense union because it simply lacks the money to do so. The paradox is that the European Union was founded on promises of peace, prosperity and stability for Europe and now that all of those promises have gone by the wayside, the EU plans to establish a defense union.
Izvestia: Biden’s COVID diagnosis may be precursor to him dropping out of US presidential race
US President Joe Biden has been diagnosed with coronavirus and will spend the next few days at his Delaware residence, working remotely. Meanwhile, pressure on Biden has begun to mount again following a brief lull amid the assassination attempt on former President and Republican presidential candidate Donald Trump. Top Democrats are now talking about the need to replace Biden in the race, Izvestia writes.
Notably, Biden has previously said the only reason he would agree to pull out of the race was if his health failed. Right after the president left for Delaware, reports emerged that the COVID diagnosis was just a sham, staged by the administration to prepare for the president’s announcement of his withdrawal.
There are 110 days left before the election, but the Democratic National Convention, where the party will elect its presidential candidate, is only a month away. The party needs to figure out a strategy before time runs out, and it seems that Vice President Kamala Harris is their best bet to challenge for the presidency. Meanwhile, the Washington Post reports, citing sources, that ex-President Barack Obama, one of Harris’s biggest supporters, believes that Biden needs to consider the viability of his candidacy.
Withdrawing from the campaign because of the coronavirus would allow Biden to save face, Dmitry Suslov, deputy director of the Center for Comprehensive European and International Studies at the Higher School of Economics, noted. "This is at least an eloquent attempt to buy time or even prepare the ground for his potential withdrawal from the presidential race," the expert said.
"As we can see, the pressure that Biden is facing seems to have had an effect. We all know that the coronavirus can cause complications, particularly in elderly people. This probably is the reason the president will cite. So he will be pulling out because of this force-majeure, and not because of the dementia that everyone thinks he has. Withdrawing under pressure would mean losing face, but dropping out after a pause caused by the coronavirus is a far more dignified step in terms of his image," Suslov concluded.
Nezavisimaya Gazeta: Moldova starts receiving US military equipment
Moldova has started to receive military equipment from the US. Defense Minister Anatolie Nosatii claims that these supplies are meant for army exercises. However, this is not very believable as Moldova’s new National Defense Strategy was approved on Wednesday, and Russia was identified as the main source of threat to the country, Nezavisimaya Gazeta notes.
NATO announced at the recent summit in Washington D.C. that it would increase political and material support for Moldova. Meanwhile, a recent opinion poll revealed that 65% of the country’s citizens see neutrality as the best guarantee of Moldova’s security. If a referendum is held on Moldova’s accession to NATO, 31% of respondents would say "yes," while 51% would say "no."
Founder of Platform Moldova Irina Vlah, who has announced plans to run in the presidential race, points to a large number of signals indicating that "the country is gearing up for war." "Officials are coming out and saying that we need to join NATO. All initiatives aimed at strengthening Moldova’s neutral status are being blocked. <...> This confirms that the authorities don’t rule out the worst scenarios that will undermine peace in Moldova," the politician noted.
Notably, President Klaus Iohannis of Romania and President Vladimir Zelensky of Ukraine signed a defense agreement at the NATO summit in the US. The document stipulates that the parties will seek to boost multilateral cooperation with other countries of the region, including Moldova, in order to enhance regional security. Moldovan politicians and experts anticipate that Bucharest and Kiev may use the country’s territory to move aircraft and ground equipment from Romania to Ukraine.
Anatol Plugaru, former Moldovan minister in charge of national security, told the newspaper that President Maia Sandu "dragged Moldova into the conflict some time ago when she opened the country’s airspace to Ukraine and NATO countries." "Thus, Russia gained the legitimate right to carry out strikes on military facilities on our soil," Plugaru noted. He does not rule out that "the F-16s provided [to Ukraine] by Romania will take off from and land at Moldovan airfields."
Izvestia: Analysts expect Russia’s Central Bank to raise key rate to 18%
Russia’s Central Bank will raise the key rate to 18% at its meeting on July 26, said experts interviewed by Izvestia. The regulator’s move will support the ruble and make bank deposits even more appealing but it may create risks for the Russian economy in the long term.
The main reason behind the potential tightening of the monetary policy is that inflation has significantly surpassed the Central Bank’s recent forecast, Olga Belenkaya, head of macroeconomic analysis at Finam, said. The regulator expected prices to rise by 4.3-4.8% by the end of the year but inflation reached 4.68% in early July.
Staff shortages and record-low unemployment, which stood at 2.6% in May, continue to push salaries up, Sovcombank Chief Analyst Mikhail Vasilyev added. According to the Federal State Statistics Service, salaries grew by 17% in April year on year. The rising incomes of Russians are also impacting demand in the economy and, consequently, the prices of goods and services, Sergey Grishutin, managing director of the NRA rating agency, explained.
Besides, additional inflation risks have emerged, which stem from declining imports due to payment complications, Igor Rapokhin, debt market strategist at SberCIB Investment Research, noted. Another reason why the key rate may go up is that the already high rates have failed to cool the lending market, which continues to grow at a high pace, Bogdan Zvarich, Banki.ru chief analyst, pointed out.
Another key rate hike is supposed to support the ruble in the short-term as it would make ruble deposits increasingly attractive, Vasilyev pointed out.
In the meantime, if the key rate is raised further after July 26, the Russian economy may face the risk of a slowdown or even a recession, Belenkaya warned.
Gazprombank economist Pavel Biryukov believes that after the key rate goes up to 18%, the rise in prices may significantly slow down by the end of the year and the need to clamp down on monetary policy will decline. Andrey Vanin from Gazprombank Investments agrees that the upcoming key rate hike will be the last one in the policy tightening cycle.
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