Press review: US waiting for Kim’s Christmas ‘gift’ and Russia eyes de-dollarizing Ecuador / News / News agency Inforos
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Press review: US waiting for Kim’s Christmas ‘gift’ and Russia eyes de-dollarizing Ecuador

Press review: US waiting for Kim’s Christmas ‘gift’ and Russia eyes de-dollarizing Ecuador

Top stories in the Russian press on Wednesday, December 25, prepared by TASS

Izvestia: Upper house speaker vows retaliation for US scheme to stonewall Nord Stream 2

Washington’s sanctions will not stop the completion of the Nord Stream 2 project, even though the Switzerland-based Allseas Group had to halt work under its pressure, Speaker of the Russian Federation Council (upper house of parliament) Valentina Matviyenko told reporters at a news conference responding to a question from Izvestia.

"This is a project, which ensures energy stability for Europe and is an alternative avenue to supply hydrocarbons, and Europeans realize that. Of course, it will be completed and commissioned. However, bitter recollections will linger on," she said.

Matviyenko described the sanctions against this "economic, infrastructure project in distant Europe" as "the pinnacle of absurdity," stressing that Russia and other countries, with which Washington launched an economic war, would come up with tit-for-tat measures.

There is no danger that the Nord Stream 2 project could shut down despite Washington’s efforts to prevent the pipeline’s construction, Sergei Kalashnikov, first deputy chairman of the Federation Council Economic Policy Committee, told the paper.

"The decision by the United States and European companies can be challenged, while the remaining kilometers can be covered fairly quickly, and I believe we will be able to do that," he said.

The construction of Nord Stream 2 can be completed by either the Swiss company Allseas or Russia’s Akademik Chersky pipelaying vessel, Igor Yushkov, a senior analyst at the National Energy Security Fund, explained to Izvestia.

"However, the option, where Russia will complete the construction, is less likely, that’s Option B. Although many say that the Allseas Vessels left for good, in actual fact, they just floated to the German-Danish border, where they stand and wait. They did not even enter a German port," the expert stressed.

Kommersant: Asian powers rally around the Korean Peninsula

The South Korean, Japanese and Chinese leaders have wrapped up their first ever summit in China’s Chengdu, which focused on the situation on the Korean Peninsula and security problems in the Indo-Pacific region, Kommersant writes.

After the dialogue between the US and North Korea came to a standstill, the three top Asian powers took the lead. Their objective is to relaunch negotiations with Pyongyang and prevent the Korean crisis from spiraling into a "hot phase."

Although Japan and South Korea are among Washington’s leading allies, in the current environment they opted for pooling efforts with Beijing rather than being the US "belt" to contain China.

Both Seoul and Tokyo view their cooperation with Beijing as a strategically important window of opportunity to consolidate their positions in the region. In addition to security issues, whose resolution requires vigorous concerted efforts, another incentive for their rapprochement is these countries’ determination to remove barriers to multilateral trade cooperation.

Meanwhile, former South Korean Ambassador to Russia Park Ro-byug, who is currently the Secretary General of the International Conference of Asian Political Parties (ICAPP), explained to Kommersant that rapprochement between Seoul and Beijing was based on their geographical proximity and cultural similarities. That enables them to make the most of their business cooperation as well, he stressed.

According to the expert, turning the Indo-Pacific region into a free and safe trade zone, along with energy cooperation and transport routes are all in South Korea’s national interests. However, to achieve these goals, it is essential to secure an improvement in US-Chinese ties and positive changes in relations with North Korea, he concluded.

Izvestia: Russia, Ecuador in talks over moving to settlements in rubles

Moscow plans to switch to settlements in rubles with Ecuador, several sources familiar with the situation informed Izvestia. They noted that negotiations between both countries’ diplomats, government and business representatives were in progress. One of the options, which is currently on the table, is opening a branch of a Russian state-run bank in the South American country and linking it to the Russian Central Bank’s System for Transfer of Financial Messages (SPFS), an equivalent of the SWIFT system.

Ecuador, which has no national currency of its own, uses the US dollar. The US Federal Reserve System controls any dollar transactions, so local banks are reluctant to make payments to Russia because of the risk of being sanctioned, an Izvestia interlocutor close to the negotiations explained.

Meanwhile, a source in one of the top three state-owned banks told the paper on condition of anonymity that, although there is an interest in expanding ties with Ecuador, so far there is no final decision on easing payment rules.

South America is one of the most promising markets for Russian exports, the paper quotes Vyacheslav Ulasik, adviser to the National Committee for the Assistance to Economic Cooperation with Latin American Countries, as saying. He recalled that none of them backed the anti-Russian sanctions, which means that these countries are "mature" enough and ready to pursue an independent economic policy. Russian businesses are interested in stepping up cooperation, and banks are likely to follow suit, he noted.

For Russia, switching to settlements in rubles is an image-boosting move aimed at promoting its national currency, says Igor Nikolaev, Director of the FBK Grant Thornton Strategic Analysis Institute. Russia’s desire to disconnect itself from the US dollar is understandable. On the other hand, the dollar is convenient as a universal means of payment recognized by all. Thus, by switching to settlements in rubles with other countries, Russia minimizes its risks but makes the trade process more inconvenient to some extent, the expert stressed.

Nezavisimaya Gazeta: US waiting for ‘Christmas present’ from Kim Jong-un

The North American Aerospace Defense Command (NORAD) has been on high alert awaiting a missile to be launched from North Korea. Its leader Kim Jong-un promised to ‘present a gift’ to the Americans, if they refused to compromise at the denuclearization talks, Nezavisimaya Gazeta writes.

North Korea accused Washington of failing to meet it halfway in response to the DPRK’s goodwill gestures. Kim made it clear that his patience was running out and warned that his country would consider itself free from its obligations, if America took the "wrong steps."

Pyongyang is facing a dilemma: either discontinue the dialogue with the US, which President Donald Trump conducts taking into account how it will affect next year’s presidential election or take a wait and see attitude. The plenary session of the Korean Workers’ Party Central Committee scheduled to be held in late December could shed light on that.

The plenary session is likely to focus on the country’s foreign policy next year, Konstantin Asmolov, a Leading Research Fellow at the Russian Academy of Sciences’ Institute for Far Eastern Studies, told the paper. "The content of the ‘gift’ will be revealed there. If it is a good present, there is every likelihood that Kim will extend a moratorium on launching ICBMs and nuclear tests, portraying that as a sign of respect for Trump. As for everything else, that is, nuclear energy and short-range missiles, there were no agreements on that, so North Korea will continue to develop them," he said.

"Concerning the prospects for dialogue, they are not encouraging at all. The impeachment threat is hovering over Trump, so it will be better for him to refrain from any abrupt moves on the North Korean track," the expert added.

Kommersant: Kiev suggests it can double Russian gas transit tariffs

Ukraine has hinted for the first time what the price tag for Russian gas transit will look like under the new agreement in 2020-2024, Kommersant writes. According to Ukrainian Energy Minister Alexei Orzhel, tariffs for Gazprom will double on average compared to the current ones, and Russia’s energy giant will pay $3 bln annually. This amount will be divided roughly equally between the Ukrainian system’s operator and Naftogaz.

Judging by the minister’s remarks, under the new contract, the Russian company, despite the decrease in transit volumes to 65 bln cubic meters in 2020 and 40 bln cubic meters in 2021-2024, will pay Ukraine as much as in 2018-2019, that is, about $2.9 bln per year. The average tariff can be about $64 per 1,000 cubic meters. That’s at least three times higher than Nord Stream.

If Kiev’s statements on tariffs are true, the new contract may look like a necessary step for Gazprom, which had no time to complete the construction of its pipelines bypassing Ukraine by January 1 and had to agree to any terms and conditions to avoid even greater losses in the event of a transit interruption. If that is the case, once the Nord Stream 2 and the TurkStream pipelines are ready, Gazprom may be tempted to review the contract with Ukraine.

At the same time, it is too early yet to provide any estimates, since there is no clarification on the full picture of the deal. According to Maria Belova of Vygon Consulting, the high transit tariff rates, which are required to support Naftogaz’s financial condition, can be a condition for Russian gas supplies to Ukraine’s domestic market. Russia has always insisted on that, because such supplies are very profitable for Gazprom. However, if cheap Russian gas enters the market directly, Naftogaz, which is left without transit revenues, would also lose its only financially reliable consumer, that is, the Ukrainian industry.

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