Press review: Russia-US standoff in Arctic intensifies and coal demand rises / News / News agency Inforos
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Press review: Russia-US standoff in Arctic intensifies and coal demand rises

Press review: Russia-US standoff in Arctic intensifies and coal demand rises

Top stories from the Russian press on Monday, September 27th, prepared by TASS

Media: No clear victor in Germany's parliamentary election

By the time polling stations closed in Germany and exit polls emerged on Sunday night, it was difficult to see which of the parties could be viewed as the winner of the Bundestag election, although it is clear that Germany will have a three-party coalition, Rossiyskaya Gazeta writes.

In fact, most of the political struggle is yet to come. The ARD TV channel said, citing exit polls, that the conservative bloc of the Christian Democratic Union of Germany (CDU) and the Christian Social Union in Bavaria (CSU) was almost neck and neck with the Social Democratic Party (SDP), the Greens were well behind them in third place, followed by the Free Democratic Party (FDP) and Alternative for Germany.

German political analyst Alexander Rahr believes that "the crucial question is whom the Free Democrats will be willing to join." "The Greens will definitely make it into the government, which will create difficulties for Russia because the party takes a tough position on some issues, including the Nord Stream 2 project. However, I think that at first, they won't have enough weight to go on a rampage against Moscow," Rahr pointed out.

"German-Russian trade and economic relations are primarily defined by economic factors such as changes in oil prices and Russia's economic situation. Major projects like Nord Stream 2, where Angela Merkel's policies played an important role, are an exception," Janis Kluge, an expert with the Berlin-based Foundation for Science and Politics, explained to Kommersant.

According to Chairman of the Management Board of the German-Russian Chamber of Commerce Matthias Schepp, apart from the political aspect, relations between Germany and Russia also include economic and cultural ties. In this regard, Russia's ties with Germany are stronger than with any other Western country, Schepp emphasized, adding that German companies were still interested in the Russian market. However, in his view, deep-seated differences between Russia and the European Union will still be there regardless of who is at the top of the political pyramid.

Nezavisimaya Gazeta: Pentagon seeks to increase presence along Northern Sea Route

The Russia-US standoff in the Arctic is intensifying. The US lacks icebreaker ships and seeks to employ submarines and aircraft to control the Northern Sea Route, which Russia considers an important passage. According to the US media, unmanned aerial vehicles capable of operating in the Arctic autonomously for over 40 hours will soon be put to use, Nezavisimaya Gazeta writes.

As global warming creates greater opportunities to use the Arctic region, the Pentagon plans to increase its presence there, including along the Northern Sea Route. Military aircraft have already stepped up their activities. American planes have once again been deployed to the Keflavik base in Iceland, which was shut down 15 years ago. The P-8 Poseidon patrol aircraft and the B-2 bombers have recently been stationed at the base, and now there also are the B-2 Spirit stealth bombers.

Military expert retired Colonel Vladimir Popov points out that "Russia's S-400 Triumf air defense systems are on combat duty on the Novaya Zemlya Archipelago and anti-aircraft missile units equipped with the S-300 systems are deployed to the northern part of the Sakha region." "They are capable of destroying not only US unmanned aerial vehicles but stealth bombers as well," he added. According to the Russian Defense Ministry, military airfields are being established along the Northern Sea Route where interceptor aircraft are planned to be deployed.

"The Americans are forcing Russia to increase its military spending and spend more resources on ensuring the military security of the Northern Sea Route," military expert retired Lieutenant Colonel Vladimir Ovchinnikov noted. "However, I think that these expenses will be justified. The traffic of goods through Russia's Arctic ports has grown this year," he explained. According to the expert, the Arctic's share in Russia's port freight traffic currently stands at about 11%. "It's not bad but there is hope that the Defense Ministry's activities aimed at ensuring the Northern Sea Route's safety will bring the figure up," Ovchinnikov said.

Izvestia: Entrepreneurs expect US, Russia to resume business dialogue at 2022 SPIEF

Russia and the United States may resume business dialogue at the 2022 St. Petersburg International Economic Forum (SPIEF), President of the American Chamber of Commerce in Russia Alexis Rodzianko told Izvestia.

According to him, it is a matter of will because much of the groundwork required before holding a meeting of this kind has already been completed. Rodzianko pointed out that the US delegation to the SPIEF was one of the largest ones every year and included major US business leaders.

Rodzianko believes that incumbent US President Joe Biden has more freedom to act than his predecessor and faces less pressure from lawmakers. When speaking about improvements in bilateral relations, he cited the US ambassador to Moscow who had said that he was promoting, with the backing of the US president, a plan to convene a meeting of Russian and US business leaders. The president of the American Chamber of Commerce in Russia noted that it would be a very positive signal, particularly from the US government, because discussions for such a meeting had been underway for four years. According to him, US investors are particularly interested in the Russian energy industry as more than half of all planned US investment in the Russian economy this year is intended for this sector. And historically, Exxon Mobile is the biggest US investor among those active in Russia.

The president of the American Chamber of Commerce in Russia emphasized that visa issues remained the main obstacle hampering business activities. Hundreds of thousands of Russians work for American companies in Russia and senior officials - about 20,000 people - need to make business trips to meet with their colleagues, including in the United States. So, when they are unable to receive visas, it hinders such meetings, adding to the coronavirus restrictions, Rodzianko explained, stressing that it was easier for Americans to get Russian visas at the Russian embassy in the US. In his view, the visa issue is probably a bargaining chip for the US government.

Rossiyskaya Gazeta: Coal demand rising despite green agenda

The standstill in wind energy production due to a protracted lack of wind in the North Sea and a record spike in gas prices have dramatically increased Europe's demand for coal. Although high carbon taxes apply to coal energy generation, raising its costs, it is still cheaper than using gas, Rossiyskaya Gazeta notes.

The economic growth that followed the 2020 decline is adding fuel to the fire, and rising demand for electricity and steel (whose production requires coal) has more than doubled coal prices in the past year. According to the Russian Energy Ministry, the export of Russian coal to European countries increased by 2.4% in January-June of 2021.

Meanwhile, the European Union's goal to achieve carbon neutrality remains unchanged. Still, green plans may play into the hands of Russia's coal industry, Deloitte CIS expert Grigory Grapendaal pointed out. In his view, given the current spike in gas prices and a high electricity demand, Europe's consumption of coal may grow in the next few years. However, in the long run, the EU's ambitious plans to decarbonize the economy should be taken into account as exports may drop.

Finam analyst Alexei Kalachev has a similar view of the situation. He believes that the rise in coal prices in Europe this year was caused by several factors, which include recovering energy consumption, weather anomalies, gas shortages and high gas prices. None of these factors is permanent so they won't make the EU abandon its decarbonization policy. According to Kalachev, the coal industry's future mostly lies with Southeast Asia countries. Given their high rates of economic development, the region's coal consumption will continue to grow for at least several years, even if coal's share in energy production declines.

Kommersant: Cryptocurrency prices drop to two-month lows

The value of the world's top ten cryptocurrencies by capitalisation dropped by 3-15% last week. According to Coinmarketcap, bitcoin and ether prices fell to two-month lows. Expectations of a tougher monetary policy by the US Federal Reserve System and China's strict position on cryptocurrency transactions are the causes of the market pressure, Kommersant notes.

Market participants remain mainly concerned about the phasing out of a monetary stimulus program in the United States. According to Chief Data Analyst at CEX.IO Broker Yuri Mazur, Federal Reserve Chairman Jerome Powell made a clear hint at such plans. The market also faced additional pressure from the Chinese regulator. Founder of the STASIS stable cryptocurrency platform Grigory Klumov explained that the People's Bank of China had delivered a blow to the market by declaring all cryptocurrency transactions illegal. After that, all exchanges of Chinese origin announced that they would no longer register clients from China. "It made the tokens of Chinese exchanges nosedive, triggering the sales of cryptocurrencies, including bitcoin and ether," the expert noted.

However, in Klumov's words, Beijing's harsh stance will not affect cryptocurrency markets in the long term. "They will continue to integrate into the financial system, becoming more and more popular in terms of asset allocation among major investors, only outside China," he said.

That said, there continues to be a sustained interest in third-generation platforms with no Chinese roots, such as Avalanche and Cosmos. According to Klumov, they "still look strong against most of the market." Mazur added that bitcoin's current price range stands at between $40,000 and $45,000 and though "investors made attempts to reach the lower end of the range, they were unable to break it."

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