(EUobserver) Thomas Borgen, the Norwegian CEO of Danske Bank, Denmark’s biggest lender, resigned Wednesday over allegations it laundered billions of illicit Russian money. “I really regret it … I have lived up to legal obligations, [but] I think it is best for all parties that I stop,” he said in a stock exchange notice. The bank published the “unpleasant” results of its internal probe into the affair on Wednesday.
(NYT) LONDON — In March, when British detectives began their investigation into the poisoning of Sergei V. Skripal, the former Russian spy, they had little to work with but mounds of CCTV footage. Heads bent over their desktop computers, they began the unglamorous work of poring through it, looking for an assassin.
Britain is one of the most heavily surveilled nations on earth, with an estimated one surveillance camera per 11 citizens. It has cutting-edge technology for visually identifying criminals, and software so sensitive it can scan an airport for a tattoo or a pinkie ring. And then there is that team of genetically gifted humans known as “super-recognizers.”
On Wednesday, the authorities announced that the effort had paid off: Two Russian intelligence officers had been charged with attempted murder, the first criminal charges in a case that has driven a deep wedge between Russia and the West.
Investigators released a cache of evidence, including security camera images that captured the progress of the two men from an Aeroflot flight to the scene of the crime, and from there back to Moscow. They also released photographs of the delicate perfume bottle that was used to carry a weapons-grade nerve agent, known as Novichok, to the quiet English city of Salisbury where the attack took place.
In the days leading up to the March 4 poisoning, the same two Russian men kept popping up on cameras.
“It’s almost impossible in this country to hide, almost impossible,” said John Bayliss, who retired from the Government Communications Headquarters, Britain’s electronic intelligence agency, in 2010. “And with the new software they have, you can tell the person by the way they walk, or a ring they wear, or a watch they wear. It becomes even harder.”
The investigation into the Skripal poisoning, known as Operation Wedana, will stand as a high-profile test of an investigative technique Britain has pioneered: accumulating mounds of visual data and sifting through it.
Neil Basu, Britain’s top counterterrorism police official, broke months of silence in a hastily convened Scotland Yard news conference on Wednesday, taking the unusual step of stripping journalists of their electronic devices to keep the news under wraps until arrest warrants for the two men, Alexander Petrov and Ruslan Boshirov, had been issued. Two hours later, Prime Minister Theresa May announced that British intelligence services had identified the men as officers in the G.R.U., Russia’s military intelligence service.
Russian officials responded witheringly, declaring in a Foreign Ministry statement that “we decisively reject these insinuations.”
“It is impossible to ignore the fact that both British and American colleagues act according to the same scheme: Without bothering themselves to produce any evidence, they announce a list of some ‘Russian agents’ in order to justify London and Washington’s witch hunt,” said Maria Zakharova, a Foreign Ministry spokeswoman.
Mr. Bayliss said that all along, investigators have been acutely aware that the suspects would be protected in Russia and never tried, though Interpol red notices and domestic and European arrest warrants were issued.
“There are a lot of people who would sort of give up on it, because what’s the point?” he said. “They’re in Russia, we’re not going to get them back. But the thing is, once you’ve got it to that point, that means those people can’t leave Russia.”
Beyond that, Mr. Bayliss said, “there is a satisfaction of getting to the truth, to be able to prove to the Western world that the Russians did this.”
The day of the attack, Mr. Skripal and his daughter, Yulia, were found barely conscious on a bench beside the Avon River. (They both recovered, but months later, two Britons, Dawn Sturgess and Charlie Rowley, fell ill after being exposed to the poison. Ms. Sturgess died.)
In the days that followed the Skripal attack, investigators began by collecting 11,000 hours of video from ports, train stations, shop windows, car dashboards and the roadways around Mr. Skripal’s house.
Before searching for a needle, investigators said wryly, they first had to build their own haystack.
The investigation drew on some of Scotland Yard’s most storied assets, like its Super-Recognizer Unit. Its officers are selected for their superior ability to remember faces — the opposite of prosopagnosia, also known as “face-blindness.”
“They don’t concentrate on the obvious: the graying hair or the mustache or the glasses,” the unit’s founder, Mick Neville, told Sky News last week. “They look at the eyes, the mouth, the ears — the things that don’t change. They can recognize a face from the tiniest glimpse of part of it.”
In cases such as the Skripal investigation, which begin with an enormous pool of potential suspects, super-recognizers can help by singling out people who seem to move suspiciously, experts say. Local police officers are often brought in to help them eliminate bystanders, like small-time drug dealers, who may also appear suspicious.
Those results were then overlaid with passport data for Russians who left the country shortly after the poisoning, bringing the pool of suspects down to a manageable number. The police were able to cross-reference suspects in other ways, mapping mobile phone and bank card use, for example.
“It’s a bit like a funnel, the top of the funnel has a vast amount going in, and by the time the liquid comes out at the bottom, it narrows down to a tiny stream,” Mr. Bayliss said.
Investigators had one bit of luck: Heavy snow fell through the weekend of the attack, reducing the number of people on the streets.
A big breakthrough took place nearly two months after the Skripals were poisoned, when the police arrived at the City Stay Hotel in East London, where the two suspects had spent the two nights before the attack. Officers took samples from the room where the two men had stayed, and sent them for laboratory testing. Two of them showed trace contamination for the nerve agent used in the attack.
On Wednesday, as news of the charges spread, neighbors peered curiously at the building, which had smeared windows and dingy artificial grass.
“I just got a shiver, a cold shiver,” said Debbie Weekes, 47, who lives nearby. “It’s just shocking, I’m at a loss for words. You never know who’s around.”
Some wondered why they had not received a warning in May, when the police found the nerve agent traces in the hotel.
“Obviously we don’t feel safe,” said Shehan Ravindranath, 43, the manager of a supermarket across the street. “We can only take protection if we know about it.”
In Salisbury, though, the announcement about the charges was greeted with relief. Matthew Dean, the head of Salisbury’s City Council and owner of a local pub, the Duke of York, said he hoped it would put to rest conspiracy theories circulating about the crime.
“This is a piece of closure,” he said.
Ceri Hurford-Jones, the managing director of Salisbury’s local radio station, saluted investigators for their “sheer skill in getting a grip on this, and finding out who these people were.”
It may not have been the stuff of action films, but Mr. Hurford-Jones did see something impressive about the whole thing.
“It’s methodical, plodding,” he said. “But, you know, that’s the only way you can do these things. There is a bit of Englishness in it.”
(Economist) Despite Donald Trump, Russia is being hit harder and harder
BARELY a week seems to pass without news of fresh Western sanctions against Russia. Sergei Elkin, one of Russia’s most popular cartoonists, recently captured the mood with a caricature of a hapless-looking Vladimir Putin holding a cell phone to his ear. “To hear more information about new sanctions, press one,” read the caption.
In August alone, America has slapped penalties on Russian shipping firms accused of trading oil with North Korea; imposed restrictions on the arms trade in connection with the poisoning of ex-Russian spy Sergei Skripal in Salisbury; and begun congressional hearings on two new pieces of legislation designed to punish Russia for its interference in elections. Further Skripal-linked measures may follow in three months’ time.
Markets have been scrambling to digest their impact. The greatest threat to Russia’s economy comes from the two proposed bills, the Defending Elections from Threats by Establishing Redlines Act of 2018 (DETER) and the Defending American Security from Kremlin Aggression Act (DASKA). Senator Lindsey Graham, one of DASKA’s six bipartisan co-sponsors, called it the “sanctions bill from Hell”. When details of its contents made their way into the Russian press in early August, the rouble slid to two-year lows (see chart) and the share prices of Russian state banks began falling.
Investors see several reasons to worry. Chief among them are proposed bans on trading new Russian government debt and limits on the operations of state banks. With state-owned lenders accounting for over 60% of the sector, bans on just a few could force a “restructuring of the financial system,” argues Natalia Orlova, chief economist of Alfa-Bank, Russia’s largest private lender. This would be painful, but stop short of the abyss: America cannot impose Iranian-style sanctions—such as banning the purchase of Russian oil and gas—without harmful effects on the global economy.
The Russian authorities, meanwhile, have been taking prudent steps to prepare. “They have both insulated and isolated the economy,” says Chris Weafer of Macro-Advisory, a consultancy. The Russian central bank has dumped or disguised ownership of four-fifths of its holdings of American government debt, following sanctions imposed in April. The government has been funnelling extra revenues from rising oil prices into refilling its National Welfare Fund and building up reserves. And a weaker rouble actually helps exporters, though at the cost of higher inflation.
Yet no policy moves, short of withdrawing Russian forces from eastern Ukraine, can lift the sanctions-created uncertainty that dampens investment and messes up budget planning. Compared with a year earlier, foreign direct investment fell by more than 50% in the first half of 2018. “When the risk is debt, you can build scenarios,” says Ms Orlova. “But when the risk is sanctions, it’s impossible to know.” Many see the peril increasing as America’s midterm elections approach.
The irony is that the risk of new sanctions now emanates not only from Mr Putin, but from Mr Trump as well. His subservience to Mr Putin at a July summit in Helsinki spurred senators to draft the DASKA bill, says Andrew Weiss of the Carnegie Endowment for International Peace. “[The bills] are born out of a deep distrust of the president when it comes to Russia,” a senior senate aide concurs. Even if Russia behaves this autumn, tweets from Mr Trump could well spur their passage.
MOSCOW, Aug 8 (Reuters) – The rouble slid towards its lowest level in nearly two years on Wednesday and investors sold off bonds and stocks after the Kommersant daily published what it said was the full text of a draft U.S. law detailing possible penalties against Russia.
Republican and Democratic U.S. senators introduced the draft legislation last week, the latest effort by lawmakers to punish Moscow for its alleged interference in U.S. elections and its activities in Syria and Ukraine.
Russian market reaction was muted at the time, however, and jitters only set in on Wednesday after Kommersant’s publication of the sanctions which cited potential curbs on the operations of several state-owned Russian banks in the United States and restrictions on holding Russian sovereign debt.
The rouble weakened beyond the psychological thresholds of 65 versus the dollar and 75 against the euro, briefly touching levels against the dollar last seen in April and within a few kopecks of a low last seen in November 2016.
“The rouble is hit by the sanctions theme. Even though there will be no real action until September, the signal is already there,” a dealer at a major Western bank in Moscow said.
As of 1255 GMT, the rouble was 2.2 percent weaker at 64.90 against the dollar. Versus the euro, the rouble was 2.1 percent weaker at 75.18.
Russia’s five-year credit default swaps (CDS), which reflect the cost of insuring Russian debt against default, rose to their late June high of 145, up from 133-134 earlier this week.
“There are a lot of geopolitical concerns investors have and that’s being reflected in a higher risk premium on Russian assets,” said Phoenix Kalen, director of emerging markets strategy, at Societe Generale in London.
“The probabilities are such that this bill is still relatively unlikely to become law and with that assumption in mind then I wouldn’t expect the rouble to sell off significantly from here,” Kalen added.
The U.S. measure’s prospects are unclear. It would have to pass both the Senate and House of Representatives and be signed into law by President Donald Trump.
“But even so, the document clearly shows the determination to go further than before in order to cause damage for Russia,” Barclays said in a note.
The jitters also sparked a sell-off in Russian treasury bonds, known as OFZs, sending their prices lower and lifting their yields. Yields in 10-year OFZ bonds jumped to 8.12 percent, their highest since mid-March 2017.
“The sanctions story will be one that resurfaces from time to time, especially with Republicans trying to figure out how to position themselves ahead of the mid-term elections in contrast to President Trump’s position, so it is likely that we will see these bursts of pressure on Russian assets,” said Societe Generale’s Kalen.
Shares in Russia’s largest lender Sberbank dropped to 192.50 roubles on the Kommersant report, losing more than 4 percent on the day and hovering at their lowest since mid-April.
Shares in Russia’s second-largest bank VTB were also down – by 2.1 percent – underperforming the benchmark stock index MOEX which declined 0.9 percent to 2,290.5.
Russian business conglomerate Sistema saw its shares tumble by 3.6 percent, hit by the threat of targeted sanctions after Republican Representative Ileana Ros-Lehtinen said on her Twitter account on Tuesday that an investigation was underway into Sistema’s chairman Vladimir Yevtushenkov for “operations in illegally annexed Crimea.”
Sistema’s spokesman said the company had no investments in Crimea, the Black Sea peninsula that Russia annexed from Ukraine in 2014.
(EUobserver) “Thank God without human casualties, but it is nevertheless extremely regrettable”, Estonia’s president Jueri Ratas commented after a Spanish fighter jet accidentally fired an air-to-air missile over Estonia on Tuesday during a routine Nato training mission. Estonia’s military is now searching the area around where it was fired, as it is potentially still armed, while the Spanish defence ministry has opened an investigation into the matter.
Greece Monday said it would respond “in an appropriate and proportionate manner” after Russia announced it was kicking two Greek diplomats out of the country in a retaliatory move over a decision by Athens to expel two Russian envoys.
Earlier in the day, the Russian Foreign Ministry said it had summoned Greek Ambassador Andreas Friganas and handed him a diplomatic note informing him of “tit-for-tat measures” taken by Moscow.
Two Greek Embassy staff as well as the director of Foreign Minister Nikos Kotzias’s political bureau, Giorgos Sakellariou, were ordered to leave, Kathimerini understands.
Speaking to Kathimerini on condition of anonymity, diplomatic sources described the Russian response as “asymmetric.”
They said the Greek decision was made on the basis of clear evidence that specific individuals from inside the Russian Embassy in Athens were engaged in activities intruding into Greece’s domestic affairs.
The same sources added that Greece will respond in “an appropriate and proportionate manner.”
In July, Athens expelled two diplomats based at the Russian Embassy in Athens and barred two more from entering Greece after evidence showed they tried to foment opposition to a name deal between Greece and the Former Yugoslav Republic of Macedonia (FYROM) which opened the path to the Balkan state’s EU and NATO membership.
Russian officials had at the time described the Greek move as “unjustified” and warned of an “in-kind” response.
(WSJ) Blackouts could have been caused after the networks of trusted vendors were easily penetrated
Hackers working for Russia claimed “hundreds of victims” last year in a giant and long-running campaign that put them inside the control rooms of U.S. electric utilities where they could have caused blackouts, federal officials said. They said the campaign likely is continuing.
The Russian hackers, who worked for a shadowy state-sponsored group previously identified as Dragonfly or Energetic Bear, broke into supposedly secure, “air-gapped” or isolated networks owned by utilities with relative ease by first penetrating the networks of key vendors who had trusted relationships with the power companies, said officials at the Department of Homeland Security.
“They got to the point where they could have thrown switches” and disrupted power flows, said Jonathan Homer, chief of industrial-control-system analysis for DHS.
DHS has been warning utility executives with security clearances about the Russian group’s threat to critical infrastructure since 2014. But the briefing on Monday was the first time that DHS has given out information in an unclassified setting with as much detail. It continues to withhold the names of victims but now says there were hundreds of victims, not a few dozen as had been said previously.
It also said some companies still may not know they have been compromised, because the attacks used credentials of actual employees to get inside utility networks, potentially making the intrusions more difficult to detect.
Experts have been warning about the Russian threat for some time.
“They’ve been intruding into our networks and are positioning themselves for a limited or widespread attack,” said Michael Carpenter, former deputy assistant secretary of defense, who now is a senior director at the Penn Biden Center at the University of Pennsylvania. “They are waging a covert war on the West.”
Russia has denied targeting critical infrastructure.
Mr. Homer said the cyberattack, which surfaced in the U.S. in the spring of 2016 and continued throughout 2017, exploited relationships that utilities have with vendors who have special access to update software, run diagnostics on equipment and perform other services that are needed to keep millions of pieces of gear in working order.
The attackers began by using conventional tools—spear-phishing emails and watering-hole attacks, which trick victims into entering their passwords on spoofed websites—to compromise the corporate networks of suppliers, many of whom were smaller companies without big budgets for cybersecurity.
Once inside the vendor networks, they pivoted to their real focus: the utilities. It was a relatively easy process, in many cases, for them to steal credentials from vendors and gain direct access to utility networks.
Then they began stealing confidential information. For example, the hackers vacuumed up information showing how utility networks were configured, what equipment was in use and how it was controlled. They also familiarized themselves with how the facilities were supposed to work, because attackers “have to learn how to take the normal and make it abnormal” to cause disruptions, said Mr. Homer.
Their goal, he said: to disguise themselves as “the people who touch these systems on a daily basis.”
DHS is conducting the briefings—four are planned—hoping for more industry cooperation. One thing the agency is trying to learn is whether there are new infections, and whether the Russians have figured out ways to defeat security enhancements like multifactor authentication.
In addition, DHS is looking for evidence that the Russians are automating their attacks, which investigators worry could presage a large increase in hacking efforts. “To scale, they’re eventually going to have to automate,” Mr. Homer said.
“You’re seeing an uptick in the way government is sharing threats and vulnerabilities,” said Scott Aaronson, a cybersecurity expert for Edison Electric Institute, the utility industry trade group. He said information sharing and penetration detection have gotten much better since the Dragonfly attacks began.
It isn’t yet clear whether the hackers used their access to prepare the battlefield for some future, devastating blow, investigators said. For example, many experts fear that a skilled technician could use unfettered access to change some equipment’s settings. That could make them unreliable in unexpected ways, causing utility engineers to do things that would result in extensive damage and potentially lengthy blackouts.
(Times) While the president stokes outrage, his government is remaking America.
I have many friends who hate Donald Trump. Most are liberal, academic types who hate him the way their parents or grandparents once hated Richard Nixon. Their hate is tempered by the fact that Trump is not currently bombing or invading a foreign country. Remember, it was the anti-Vietnam movement that elevated hating Nixon above the realm of party politics. (Even though Nixon insisted he was trying to end a war that Democrats had started, they never believed him.)
Far more visceral in their hatred of Trump are the “Never Trump” Republicans. Many of them are or were neoconservatives, so pacifism is not one of their defining characteristics. Indeed, I sometimes think that if Trump declared war on someone — ideally Russia, but they’d settle for Iran or Syria — they’d forgive him everything.
Never-Trumpers hate Trump for very different reasons from my liberal friends. Liberals hate Trump because they think he’s a sexist, a racist, a crook and a buffoon. Never-Trumpers don’t much like those things about him either, but they hate him because of his foreign policy. They believe in free trade. He’s a protectionist. They want to spread democracy. He likes authoritarians. In particular, he likes Vladimir Putin. Having come of age in the Cold War, Never-Trumpers loathe the former KGB agent Putin. In 2016 it was neocons, not liberals, who were the first to spot that something fishy was going on between Trump’s campaign and the Russians.
One of my Never-Trump friends frequently emails me articles from the publications he reads. They all say essentially the same thing: that Trump is the worst president in the history of the US.
Last week, in the aftermath of Trump’s meeting with Putin, his email subject lines said it all. “The moment called for Trump to stand up for America. He chose to bow — The Washington Post.” This was followed by: “What hold does Putin have on Trump? — The Atlantic.” Next came: “After Helsinki, any responsible member of Trump’s national security team must resign — Slate.” And: “Trump summit betrays his country for Russia in plain sight — New York magazine.”
For the first time in my life, I began to feel sorry for my poor, pummelled inbox: “The most bizarre part of Trump’s disastrous press conference was his deference to Putin — Slate”; “Trump is a sad, embarrassing wreck of a man — The Washington Post”; “Is this Trump’s most ridiculous denial yet? — The Washington Post”.
Finally, the coup de grâce: “The stench from Trump’s execrable performance grows ever more putrid — The Washington Post”.
Not since Jane Austen has a truth been so universally acknowledged: the Helsinki summit was an utter, unmitigated disaster. Even Newt Gingrich had to admit that Trump’s comments in Helsinki were “the most serious mistake of his presidency”.
It would certainly take the hide of a rhinoceros and a neck of solid brass to defend the president’s declaration in Helsinki on Monday that he was more inclined to believe Putin than his own director of national intelligence, Dan Coats, on the question of Russian interference in the 2016 election. But why bother doing so? By Tuesday, “I don’t see any reason why it would be [Russia]” had been amended to “I don’t see any reason why it wouldn’t be Russia”. Cue fresh outrage from liberals and Never-Trumpers alike.
How much outrage do people have left? I predict they will run out of outrage before Trump runs out of double negatives. They forget that this kind of utter, unmitigated disaster is a key part of Trump’s modus operandi. Remember Charlottesville? The statement that seemed to play down the role of white supremacists? The grudgingly contrite statement taking the original statement back? The statement undermining the contrite statement? That was 11 months ago. Remember Access Hollywood? Remember all the other utter, unmitigated disasters of 2016 that somehow didn’t prevent this man from becoming president?
Having no shame means that you don’t mind saying outrageous things and then contradicting yourself, and then contradicting yourself again. It’s one of Trump’s tried-and-tested techniques for maintaining his total dominance of the global news cycle. This is so complete now that there is almost no other political news. We are all Thai boys, trapped in a cave called Trump. The difference is, there are no rescue divers coming.
As long as the media accept that he alone is the story, the following two things are true. First, no one pays any attention to what any other branch of government does. The Supreme Court? The Federal Reserve? The Department of Defence? Does anyone actually know or care what these bodies have been doing in the past week?
Second, if no one pays any attention to the rest of the government, it can quietly get on with the substantive judicial, economic and strategic change for which the Trump presidency will eventually be remembered. While you were all obsessing about Trump, the Supreme Court was moving decisively to the right, the Fed was trying to cool down a galloping economy and the Pentagon was getting a complete overhaul under James Mattis, the defence secretary.
Future historians will mention Helsinki, but — if they are any good — the question they will ask is: what did Trump and Putin actually discuss in private, with only interpreters present? If I know Putin, it will have been the big-picture geopolitical stuff. Let me hazard a guess at what was said.
VP: What is the point of our constantly being at odds, Donald?
DT: Beats me.
VP: These sanctions are the work of your corrupt Congress. They are pointless. I am not giving back Crimea, and you know it.
DT: That’s a fact.
VP: True, I occasionally try to liquidate my political opponents, sometimes in foreign locations such as Salisbury, sometimes unsuccessfully, but your CIA has been doing that kind of wet job since time immemorial.
DT: There’s no denying it.
VP: Who are our real enemies?
DT: The Chinese. The Iranians. I’m kind of sick of the Germans too.
VP: You’re talking my language. I don’t much like those guys either. Here’s the way I see it. If you and I can work together, I can help you and you can help me. We cut a deal in the Middle East. We screw the Iranians — I don’t need them any more in Syria. We put the squeeze on the Chinese before they take over the world, including my back yard in central Asia. And we remind the Germans how much they fear us and need you.
DT: I like it.
VP: But just one thing, Donald.
DT: What’s that?
VP: No one must find out what we just agreed. So when we do the press conference, make sure you play your usual game with the press.
DT: Leave it to me.
VP: You know what the historians will call you and me one day, Donald?
DT: No — what?
VP: The Double Negatives.
DT: I don’t see why they wouldn’t!
Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford
(Economist) The summit offered up a graphic reaffirmation of what was already known
THE story of the meeting between President Donald Trump and President Vladimir Putin in Helsinki has a beginning and an end, but no middle.
It began with a statement from the American president. The lowly state of Russo-American relations, he tweeted, was not the fault of the Russian government for seizing Crimea, shooting down a passenger airliner, interfering in America’s presidential election or using a banned nerve agent to kill citizens of a close ally on its own soil. No, it was the fault “of US foolishness and stupidity and now, the Rigged Witch Hunt”.
It ended with a joint press conference that John McCain, a Republican senator, described as, “one of the most disgraceful performances by an American president in memory.”
In the middle was a void, in which the two presidents met with nobody else in the room but their interpreters. For those who watch Mr Trump daily and have observed his habit of being confrontational with other people when at a safe distance and then seeking to please them when face-to-face, this encounter seemed freighted with risk. Would he give away Crimea by mistake? Would he commit to some Russian-led military initiative in Syria? In fact this part seems to have gone relatively well. Both presidents reported that they talked about nuclear weapons, including the Intermediate-Range Nuclear Forces Treaty (INF) which covers short- and medium-range nuclear missiles. The chances of them signing an extension to the new Strategic Arms Reduction Treaty (START) are perhaps greater now than they were before the meeting. That is not nothing.
Yet it is hard to pinpoint a decisive change in American foreign policy that came out of the Helsinki meeting. What it offered instead was a reaffirmation of things that America already knew about its president. Mr Trump thinks that the world benefits when America and Russia have close relations, and that “the United States has been foolish” on this point. He takes the judgment of America’s intelligence services that Russia intervened in the 2016 election campaign to be a personal insult, an accusation that he needed outside help to beat Hillary Clinton. He will readily believe the word of a former KGB agent over the views of the CIA or FBI on this point. Americans who question this are liable to be described by their president as enemies of the people. The probe run by Robert Mueller is “a disaster for our country”. It was jarring to see Mr Trump say these things standing on a podium next to Mr Putin, but they are all things he has said before, countless times. This is not a performance. He really means it.
One part, near the end of the press conference, is worth quoting at length to give an unmediated sample of the president’s thinking:
REPORTER, Associated Press: President Trump, you first. Just now, President Putin denied having anything to do with the election interference in 2016. Every U.S. intelligence agency has concluded that Russia did. My first question for you, sir, is: who do you believe? My second question is: would you now, with the whole world watching, tell President Putin, would you denounce what happened in 2016 and would you want him to never do it again?
PRESIDENT TRUMP: So let me just say that we have two thoughts. You have groups that are wondering why the FBI never took the server. Why haven’t they taken the server? Why was the FBI told to leave the office of the Democratic National Committee? I’ve been wondering that. I’ve been asking that for months and months and I’ve been tweeting it out and calling it out on social media. Where is the server? I want to know where is the server and what is the server saying? With that being said, all I can do is ask the question. My people came to me, Dan Coats [director of national intelligence], came to me and some others they said they think it’s Russia. I have President Putin. He just said it’s not Russia. I will say this: I don’t see any reason why it would be. But I really do want to see the server but I have, I have confidence in both parties. I really believe that this will probably go on for a while but I don’t think it can go on without finding out what happened to the server. What happened to the servers of the Pakistani gentleman that worked on the DNC? Where are those servers? They’re missing. Where are they? What happened to Hillary Clinton’s e-mails? 33,000 e-mails gone, just gone. I think in Russia they wouldn’t be gone so easily. I think it’s a disgrace that we can’t get Hillary Clinton’s 33,000 e-mails. I have great confidence in my intelligence people but I will tell you that President Putin was extremely strong and powerful in his denial today and what he did is an incredible offer. He offered to have the people working on the case come and work with their investigators, with respect to the 12 people [GRU officers indicted by the Department of Justice]. I think that’s an incredible offer. OK? Thank you.
For readers who are rubbing their eyes at this point, it is important not to lose sight of a few things that will endure once this summit is over. Mr Mueller’s probe has gathered so much detail about the activities of the GRU that its future activities would seem to be compromised. Russia’s economy is weak, and American sanctions will not be lifted by the Senate anytime soon. Some of America’s institutions are not doing their job. But some of them quietly are.
US President Donald Trump has said getting on with Russia is “a good thing, not a bad thing” at the start of his first summit with Vladimir Putin.
Mr Trump said he hoped for an “extraordinary relationship” as the two presidents met in Helsinki, Finland.
Earlier Mr Trump denounced his predecessors’ “stupidity” for tensions.
US-Russia relations have been strained by Moscow’s annexation of Crimea in 2014 and by claims that the Kremlin helped Mr Trump win the 2016 election.
Some US politicians had called for the summit to be cancelled after 12 Russian military intelligence agents were charged on Friday with hacking the presidential campaign of Democratic candidate Hillary Clinton.
But in his tweet, Mr Trump put the blame for the deterioration in relations with Russia on “years of US foolishness and stupidity and now, the Rigged Witch Hunt”.
BBC diplomatic correspondent James Robbins says Mr Trump’s tweet is likely to alarm White House advisers, already nervous about the risks of giving too much ground to the Russian leader during the talks.
Many in the West have criticised Moscow for what they regard as its destabilising activities in Ukraine. The US, among others, has imposed sanctions on Russia over its annexation of Crimea.
The summit – in which the two leaders are being joined only by their interpreters – comes after a tumultuous European tour that saw Mr Trump criticise allies of the US over trade and military spending.
What are the main sources of tension with Russia?
Russia has been criticised in the US because of its military support for President Bashar al-Assad in Syria as well as its actions in Ukraine.
Tensions also are high as a result of accusations of Russian interference in the 2016 US election. The allegations are being investigated by Special Counsel Robert Mueller.
Mr Trump has consistently denounced the inquiry as a “witch hunt”.
The 12 Russians indicted on Friday were targeted as part of Mr Mueller’s investigation.
Top Democrats including party chairman Tom Perez have urged Mr Trump to cancel the talks, saying Mr Putin was “not a friend of the United States”.
On the Republican side, Senator John McCain said the summit “should not move forward” unless the president “is prepared to hold Putin accountable”.
Russia denies the hacking allegations, and says it is looking forward to the talks as a vehicle for improving relations.
What is being discussed at the summit?
US National Security Adviser John Bolton has said that both sides have agreed the meeting will have no set agenda.
But he said he found it “hard to believe” Mr Putin did not know about the alleged election hacking and the subject would be mentioned.
“That’s what one of the purposes of this meeting is, so the president can see eye to eye with President Putin and ask him about it,” he told ABC News.
Mr Trump has also been urged to raise the poisoning of two people in the UKwho came into contact with the nerve agent Novichok on 30 June. Investigators believe the incident is linked to the poisoning of a former Russian spy and his daughter in March.
Mr Trump elaborated on what would be discussed at the summit during a joint press conference with UK Prime Minister Theresa May last week.
“We’ll be talking about Syria,” he said. “We’ll be talking about other parts of the Middle East. I will be talking about nuclear proliferation.”
This is not the first time US and Russian leaders have met in Helsinki.
Finland remained politically and militarily neutral after World War Two, as US and Soviet Union went headlong into the Cold War, making it an attractive meeting spot for the two superpowers.
The city saw the signing of the 1975 Helsinki Accords, which are credited for improving relations between the Soviet Union and Western countries.
Helsinki remained a destination in the post-Soviet era, and the Trump-Putin summit is the fourth such meeting in the city.
What has Mr Trump been doing so far in Europe?
His tour has included a Nato summit in Belgium and a visit to the UK. Neither passed without controversy.
Following the Nato summit, Mr Trump said the allies had pledged to “substantially” raise their defence budgets but other leaders cast doubt on this claim.
The UK visit also had its ups and downs after Mr Trump told a newspaper the US would probably not give the UK a trade deal under the terms of Mrs May’s Brexit plans – and then later appeared to backtrack on this position.
He also said Europe was “losing its character” because of immigration from Africa and the Middle East.
On Sunday, just before he departed for Helsinki, Mr Trump described the European Union as a foe on trade.
He told CBS News that European countries were taking advantage of the US and not paying their Nato bills.
(BBG) U.S. President Donald Trump declined to brand his Russian counterpart Vladimir Putin as friend or foe ahead of the first full-fledged one-on-one summit between the two in Helsinki next week.
“I really can’t say right now. As far as I’m concerned, he’s a competitor,” Trump told reporters as he departed the White House for a European tour that will also include potentially tense meetings with leaders of the North Atlantic Treaty Organization and his first visit to the U.K. as president.
Amid criticism that the president has been harsher toward the U.S.’s NATO allies than toward the Kremlin — even in the face of evidence of attempted Russian election meddling — Trump defended his stance toward Moscow.
“I think that getting along with Russia, getting along with China, and getting along with others is a good thing,” he said Tuesday. “It’s not a bad thing.”
Senate Democratic Leader Chuck Schumer of New York said Tuesday he has heavy reservations about Trump’s meeting with Putin.
“When the president met with President Xi, when the president met with Kim Jong Un, they took him to the cleaners, it seems, and got what they wanted and we didn’t get much of what we wanted,” Schumer told reporters at the Capitol. “It’s even worse for him to meet with a very, very clever out-for-himself man like President Putin alone. And I am very much afraid what he would give away without any advisers to keep him in check.”
Also on Tuesday, a bipartisan group of 10 senators introduced a resolution condemning the Russian annexation and continued occupation of Crimea, and stating that U.S. policy should remain that Crimea is part of Ukraine. The lead sponsors of the resolution are Republican Senator Rob Portman of Ohio and Democrat Bob Menendez of New Jersey.
Trump told the assembled journalists that meeting with Putin may be the “easiest” leg of his trip and reiterated his demand that NATO countries shoulder a larger share of the alliance’s budget.
He also observed that the U.K. — and its embattled Prime Minister Theresa May — was in “somewhat turmoil” and was noticeably less effusive about May than he was about Boris Johnson, who resigned Monday over opposition to May’s plans to leave the European Union.
(Haaretz) Following Britain’s refusal to extend his visa, the Russian-Jewish billionaire businessman Roman Abramovich is seeking Israeli citizenship. Israel’s Ministry of Immigrant Absorption claims it has no such information
Abramovich, who owns the British Chelsea Football Club, landed Thursday in Israel to finalize his aliyah, or immigration to Israel. However, a spokeswoman at Israel’s Ministry of Immigrant Absorption told Russia’s state-owned Sputnik news agency that she had no such information.
Abramovich’s British visa expired last month, according to the Israel Hayom daily. His previous visa was granted before more rigorous regulations were instituted in April 2015.
Abramovich will have to explain the source of his wealth to receive the new visa, according to reports. There is no evidence that Abramovich has done anything wrong, but the United Kingdom has scrutinized Russian businesspeople and diplomats more carefully since the poisoning of former Russian spy Sergei Skripal and his daughter Yulia in Salisbury, England, in March. Several Russian diplomats were expelled following the incident.
Abramovich missed Chelsea’s Football Association Cup final victory over Manchester United at Wembley Stadium in London on Saturday night. He has owned the team since 2003 and has been present at nearly every game, until his visa problems began, The Jerusalem Post reported.
(BBG) Even when Donald Trump is threatening sanctions against a vital Russian energy project, President Vladimir Putin still has nothing but praise for his American counterpart.
“Donald isn’t just president of the United States, he’s also a good and strong entrepreneur,” Putin said at talks with German Chancellor Angela Merkel in Russia’s Sochi on Friday. “He’s also promoting the interests of his business to ensure sales in the European market of liquified American gas” by opposing the Nord Stream 2 gas-pipeline project linking Russia and Germany, Putin said.
The U.S. stepped up longstanding opposition to Nord Stream 2 this week by warning that the pipeline raises security concerns, including the prospect that Russia could install undersea surveillance equipment in the Baltic Sea. It threatened sanctions, saying the project would increase Europe’s reliance on Russian energy supplies and damage neighboring Ukraine, which would be bypassed and lose gas-transit revenue.
Royal Dutch Shell Plc, BASF SE’s Wintershall unit, Uniper SE, OMV AG and Engie SA have agreed to provide Russia’s Gazprom PJSC with financing for the project.
White House opposition to the pipeline is a rare example of continuity of policy between the Trump administration and that of former President Barack Obama, Putin said. It’s an “exclusively economic” project and Russia’s willing to talk about continuing to supply gas via Ukraine if it makes sense, he said.
While Germany regards Nord Stream 2 as a business project, “it has other implications” including the “strategic significance” of Ukraine’s transit role, Merkel said. “So we need to discuss the question of what sort of guarantees can be offered to Ukraine in this context.”
While he understands that Trump’s protecting U.S. business interests to seek adva
(GUA) Russian billionaire’s visa ran out weeks ago and it is unclear whether he will get a new one
Roman Abramovich’s UK visa has expired and British authorities have not yet issued him with a new one, according to Russian media reports and people who know the businessman.
The Russian oligarch and owner of Chelsea football club, who is the 13th richest person in Britain with a net worth of £9.3bn, according to the Sunday Times, held an entrepreneurial visa to the UK that expired several weeks ago. He has filed for a new visa, but has not yet been granted one, and it is not clear if or when he will be.
Abramovich was not seen at Saturday’s FA Cup final at Wembley, which ended in a 1-0 victory for Chelsea over Manchester United.
A person who knows Abramovich said he had not been denied a visa, but that it was taking longer than usual to renew and it was unclear why.
A representative for Abramovich declined to comment on the reports, calling it a personal matter.
Anglo-Russian relations have been strained since the double poisoning of the former Russian secret agent Sergei Skripal and his daughter in Salisbury in March. The UK expelled 23 Russian diplomats from the country in March, leading to a tit-for-tat expulsion by Russia later that month.
Russia shut down the activities of the British Council, which promotes cultural programmes between the two countries, and Britain’s consulate-general in St Petersburg. The prime minister, Theresa May, also said the government would look more closely at Russian investments in the UK.
The home secretary, Amber Rudd, said in March that the government would look retrospectively at Tier 1 visas, those given to applicants who want to open businesses in Britain and have at least £50,000 in investment funds, like the one Abramovich held. Nearly 700 Russians came to Britain between 2008 and 2015 on such visas.
The delay in Abramovich’s visa was first reported by the Russian news agency the Bell, which wrote on Sunday that it had expired three weeks ago and that his private Boeing 767 last travelled to London on 1 April. The report cited three people who know Abramovich.
A second person who knows him told the Guardian the report “looked correct”, but emphasised that the Russian businessman had not yet received a firm answer from British authorities.
The UK security minister Ben Wallace said: “We do not routinely comment on individual cases.”
Abramovich bought Chelsea in 2003 and has helped bankroll the club during a period of unprecedented success, including five league titles. He regularly attends the club’s matches at Wembley and was seen at previous cup finals.
Once considered Russia’s richest man, he said in a British court in 2011 that he had an extravagant lifestyle, including properties in London and France and the luxury 533ft super-yacht Eclipse.
The Russian, who does not hold UK residency, owns a £90m home in Kensington Palace Gardens, nicknamed Billionaires’ Row.
He owns Evraz, Russia’s largest steelmaker, and the metals producer Norilsk Nickel. He made his fortune in the 1990s in oil and gas in a period when state assets were privatised and sold off to a number of businessmen who made fantastic fortunes.
Abramovich sold his stake in the oil firm Sibneft to the state-controlled gas group Gazprom for £7.4bn in 2005, increasing the Kremlin’s control over the country’s energy assets.
His stake in the company became the subject of a £2bn lawsuit in a British court. Boris Berezovsky, a once-powerful businessman who lived in self-imposed exile under Putin, sued Abramovich in 2008 over claims that he was forced to sell his shares in Sibneft under the threat of violence. Berezovsky lost the case in 2012.
While Berezovsky fell foul of the Kremlin under Vladimir Putin, Abramovich has maintained good relations with the Russian government. He served as governor, and then as the chair of the legislature in the remote Russian region of Chukotka. He helped build infrastructure at the 2014 Sochi Olympics that became an important prestige project for the Kremlin.
A judge in the Berezovsky lawsuit ruling said that while Abramovich “enjoyed very good relations with Putin and others in power at the Kremlin”, he did not have enough influence to “pull the presidential strings”.
He was named on a list of Russian oligarchs supposedly linked to Putin released by the US Treasury Department earlier this year. But the list was ridiculed as a carbon copy of the Forbes list of all Russians worth more than $1bn.
(JN) O presidente russo afirma que a intervenção dos Estados Unidos, França e Reino Unido na Síria diminuiu as hipóteses de se chegar a uma solução política para o conflito naquele país.
O presidente russo Vladimir Putin avisou este domingo, 15 de Abril, que mais ataques do Ocidente na Síria trarão o “caos” às relações internacionais.
Segundo a Reuters, Putin deixou o alerta numa conversa telefónica com o seu homólogo iraniano Hassan Rouhani depois de os Estados Unidos, França e Reino Unido terem realizado, no sábado, uma série de ataques com mísseis contra três alvos associados à produção e armazenamento de armas químicas na Síria.
Um comunicado do Kremlin informou que Putin e Rouhani concordaram que os ataques ocidentais diminuíram as hipóteses de se chegar a uma solução política para o conflito que dura há sete anos e que já matou pelo menos meio milhão de pessoas.
“Vladimir Putin, em particular, enfatizou que, se tais acções cometidas em violação da Carta da ONU continuarem, isso inevitavelmente levará ao caos nas relações internacionais”, refere o comunicado do Kremlin, citado pela agência noticiosa.
Os ataques levados a cabo pelos Estados Unidos, França e Reino Unido atingiram o coração do programa de armas químicas da Síria, disse Washington, em resposta a um ataque com armas químicas realizado há uma semana. Os três participantes insistiram que a sua resposta não teve como objectivo derrubar o presidente Bashar al-Assad ou intervir no conflito.
Os bombardeamentos, descritos pelo presidente dos EUA Donald Trump como um sucesso, mas denunciados por Damasco e seus aliados como um acto de agressão, marcaram a maior intervenção dos países ocidentais contra Assad e a Rússia.
As palavras de Putin foram divulgadas pouco tempo depois de o ministro-adjunto dos Negócios Estrangeiros da Rússia, Sergei Ryabkov, ter feito uma nota mais conciliatória dizendo que Moscovo faria todos os esforços para melhorar as relações políticas com o Ocidente.
Questionado sobre se a Rússia estava preparada para trabalhar com as propostas dos países ocidentais nas Nações Unidas, Ryabkov disse à agência de notícias TASS: “Agora a situação política é extremamente tensa, por isso não farei nenhuma previsão”.
“Trabalharemos com calma, de forma metódica e profissional, aproveitando todas as oportunidades para que a situação saia deste pico político extremamente perigoso”, afirmou.
(Reuters) The prospect of Western military action in Syria that could lead to confrontation with Russia hung over the Middle East on Friday but there was no clear sign that a U.S.-led attack was imminent.
International chemical weapons experts were travelling to Syria to investigate an alleged gas attack by government forces on the town of Douma which killed dozens of people. Two days ago U.S. President Donald Trump warned that missiles “will be coming” in response to that attack.
The allies of Syrian President Bashar al-Assad were eager on Friday to lay blame for the crisis not with him but with Trump.
Russian Deputy Prime Minister Arkady Dvorkovich said international relations should not depend on one person’s morning mood, in apparent reference to Trump’s tweets.
“We cannot depend on what someone on the other side of the ocean takes into his head in the morning. We cannot take such risks,” said Dvorkovich, speaking at a forum.
Russia has warned the West against attacking Assad, who is also supported by Iran, and says there is no evidence of a chemical attack in Douma, a town near Damascus which had been held by rebels until this month.
Vassily Nebenzia, Moscow’s ambassador to the United Nations, said he “cannot exclude” war between the United States and Russia.
“The immediate priority is to avert the danger of war,” he told reporters. “We hope there will be no point of no return.”
Sheikh Naim Qassem, deputy leader of the Iranian-backed Hezbollah, told Lebanese daily al-Joumhouria: “The conditions do not point to a total war happening…unless Trump and (Israeli leader Benjamin) Netanyahu completely lose their minds.”
U.S. allies have offered strong words of support for Washington but no clear military plans have yet emerged.
British Prime Minister Theresa May won backing from her senior ministers on Thursday to take unspecified action with the United States and France to deter further use of chemical weapons by Syria.
Trump was also expected to speak with French President Emmanuel Macron, who said on Thursday France had proof the Syrian government carried out the Douma attack and would decide whether to strike back when all necessary information had been gathered.
For a graphic on an overview of chemical warfare, click tmsnrt.rs/2CnTeQh
ASSAD TIGHTENS GRIP
Trump himself appeared on Thursday to cast doubt on at least the timing of any U.S.-led military action, tweeting: “Never said when an attack on Syria would take place. Could be very soon or not so soon at all!”
He met his national security team on the situation in Syria later in the day and “no final decision has been made,” the White House said in a statement.
“We are continuing to assess intelligence and are engaged in conversations with our partners and allies,” it said.
A team of experts from the global chemical weapons watchdog, the Organisation for the Prohibition of Chemical Weapons, was travelling to Syria and will start its investigations into the Douma incident on Saturday, the Netherlands-based agency said.
The capture of Douma has clinched a major victory for Assad, crushing what was once a centre of the insurgency near Damascus, and underlines his unassailable position in the war.
He has cemented his control over most of the western, more heavily populated, part of the country, with rebels and jihadist insurgents largely contained to two areas on Syria’s northern and southern borders.
They still control the northwestern province of Idlib, near Turkey, and a southern region around Deraa, on the border with Jordan. Turkish forces and rebel allies control territory in northern Syria, while U.S.-backed Kurdish forces hold wide areas of the northeast, and pockets of Islamic State fighters remain.
But none of those any longer directly threaten Assad’s grip on power, which has been reinforced by Russian air power and Iran-backed fighters on the ground.
(ZH) A shooting war between the US and Russia appears imminent.
Following overnight speculation that the US may launch an airstrike on Syria at any moment, this morning, in his latest fiery tweetstorm, after slamming the failing New York Times and again lashing out at the Russia collusion probe and Cohen’s office raid, Trump tweeted that “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”
The tweet prompted several observers to point out the following Trumps statement from the historical archives:
In any case, Trump’s comment came in response to a statement by the Russian ambassador to Lebanon Alexander Zasypkin who said overnight that any U.S. missiles fired at Syria will be shot down and their launch sites targeted in response to Trump promise of a forceful response to an alleged chemical attack on a rebel enclave near Damascus.
“If there is a strike by the Americans, then we refer to the statements of President [Vladimir] Putin and the chief of staff that the missiles will be downed and even the sources from which the missiles were fired,” Zasypkin told Hezbollah’s al-Manar TV.
In response, Russian foreign ministry spokeswoman Maria Zakharova said that US “smart missiles should fly towards terrorists, not a legitimate government that has been fighting international terrorism for several years on its territory” and sarcastically noted that the US “smart missiles” could be an attempt to destroy evidence of the alleged “chemical attack” on the ground in Syria.
RUSSIA RESPONDS TO Trump missiles-are-coming tweet.
Foreign Ministry’s Maria Zakharova: “Missiles must fly towards terrorists, not a legitimate government that has been fighting international terrorism in its territory for several years.”
And missiles would “destroy evidence.”
Earlier, Kremlin spokesman Dmitry Peskov told reporters that Russia “categorically” disagrees that a chemical attack took place in Syria. “I still want to hope that all parties will avoid any steps, which in reality aren’t provoked by anything, that can destabilize the already fragile situation in the region.”
Peskov also said that Putin has no plans so far for phone talks with Donald Trump, while adding that Russian market volatility is partly emotional, partly speculative; Russian economy has sufficient durability, Peskov says
Meanwhile, indicating that a US strike on Syria is imminent, on Tuesday Trump canceled a trip to Latin America to focus on the Syria incident, the White House said. Defense Secretary Jim Mattis also canceled plans to travel to California in the coming days, as Trump told reporters all options were on the table regarding Syria.
As we reported on Monday, the USS Donald Cook, a Navy destroyer, left a port in Cyprus on Monday. The guided missile destroyer is armed with Tomahawk cruise missiles, which were used a year ago after an alleged sarin gas attack on Syrian civilians.
Also overnight, Eurocontrol, the European air traffic control agency, warned airlines Tuesday to exercise caution in the eastern Mediterranean due to possible airstrikes in the next 72 hours.
Retired Adm. James Stavridis, a former head of NATO and an NBC News analyst, warned that any U.S. strike on Syria would likely require manned aircraft and characterized it as a “high-risk operation.”
“Last year was about sending a signal,” Stavridis said, referring to the April 2017 strike ordered by Trump. “This year its about destroying actual Syrian capability.”
Of course, if Russia is serious and it intends to shoot down not only US missiles but their sources – including ships and fighter jets – what happens in the next several hours could unleash World War III. Which would be bizarre if the only purpose for that is for Trump to prove to Mueller that he is not, in fact, a Russian puppet, even as the Military Industrial Complex enjoys its final victory.
Perhaps somewhat surprisingly, futures did not like the news that war between the US and Russia may be coming, and slumped to session lows.
(BBG) The most punitive U.S. sanctions yet to descend on Russian companies and oligarchs are battering the nation’s assets as the Kremlin scrambles to contain the damage.
In the first trading day since dozens of Russian tycoons and companies were slapped with penalties, Moscow-traded stocks headed for the biggest drop in four years, the currency slid the most in the world and the nation’s credit risk soared.
Among those named by sanctions were Oleg Deripaska, who owns aluminum giant United Co. Rusal. Revealing the potential ripple effect of being cut off from its western clients, Rusal said on Monday it was highly likely to default on debt. Its shares tumbled 28 percent in Moscow.
“We haven’t seen such a united, mass retreat from Russian assets for a long time,” Kirill Tremasov, director of the analysis department at investment company Loko-Invest in Moscow. “The situation is ever more reminiscent of 2014,” he said, referring to a market crash that year following President Vladimir Putin’s annexation of Crimea and subsequent slump in oil.
While Russian companies have faced a slew of sanctions since the conflict with Ukraine sparked the worst standoff with the U.S. and Europe since the Cold War, the latest penalties are markedly more devastating. For the first time, major publicly traded Russian companies with global clients are on the black list.
Even the Kremlin’s attempt to assuage concerns by promising to protect billionaires couldn’t slow the investor flight. The benchmark MOEX Russia Index sank 8.6 percent, the most since March 2014 at the height of the Crimea conflict. The ruble weakened 3.1 percent by 4:26 p.m. in Moscow, crossing 60 per dollar for the first time since November.
The tables have turned against Russia quickly in the past few weeks since the U.K., accused the country of poisoning an ex-spy on British soil. In retaliation, the U.K. and its allies have announced a slew of measures — including coordinated expulsions of more than 150 Russian diplomats last month.
The new sanctions also coincide with a worsening of tensions between Russia and the U.S. over the war in Syria after an alleged chemical attack outside Damascus April 7. U.S. President Donald Trump warned of a “big price to pay,” pointing the finger at Putin and Iran as being “responsible for backing Animal Assad.”
“Investors finally realized how badly things are turning out for Russia,” said Vadim Bit-Avragim, a money manager at Kapital Asset Management LLC in Moscow, who’s selling Russian shares today. “Investors are afraid that now any Russian company is at risk of sanctions. Traders are closing limits on Russian shares because they’re seen as toxic assets.”
In addition to Deripaska, billionaire Viktor Vekselberg was named under American sanctions. Vekselberg is the chairman of an investment group called Renova that owns a stake in Rusal. He also holds a majority interest in Swiss industrial pump manufacturer Sulzer AG, which Renova said on Monday would be lowered to insulate the company from the penalties.
Prime Minister Dmitry Medvedev ordered his cabinet to come up with ways to assist the affected companies and draft possible retaliatory measures, but provided no details.
The Kremlin needs time to assess “the scale of the real damage” from the new sanctions and formulate a response, spokesman Dmitry Peskov said. “These sanctions are a rather new phenomenon,” he said.
The reaction of investment banks was swift. Morgan Stanley, for one, closed its long ruble recommendation, citing the likelihood of of foreign investors fleeing the country.
Rusal led the declines among all but one shares in Moscow. The company asked its customers to stop payments as it investigates the consequences of the sanctions.
Deripaska’s energy holding En+ Group Plc, meanwhile, fell as much as 23 percent. The company had about $13 billion gross debt at the end of 2017, including Rusal’s — with Russian lender Sberbank PJSC among its biggest creditors.
More than half of Rusal’s debt is dollar denominated, making default on its bonds “the most likely scenario,” according to analysts at Raiffeisen Capital. They expect a halt on dollar settlements and disruptions in aluminum sales.
Part of the worry is that Putin’s hands will be tied on how much he can help out targeted companies. Even state-controlled banks may not be willing to take the risk of continuing to do business with the industrial giants targeted by the U.S. for fear of repercussions.
Russian five-year credit-default swaps — contracts that insure against potential default — climbed 15 basis points, or 12 percent, on Monday, the most since December 2014 when Russia was facing a currency crisis.
“The Kremlin will apply the ‘we do not give up our guys’ rule in response to American sanctions and will try to help Deripaska’s business to survive,” said Kirill Chuyko, chief of research in BCS Global Markets. “But that will be difficult to do as even state banks can’t really help Rusal or En+ or they may be sanctioned in return.”
The recovery is unsteady now that the peak of defense outlays is over. In the fourth quarter, annual growth in gross domestic product more than halved from the previous three months, according to data released this week. While Russia’s military statistics are classified, the Economy Ministry has partly blamed a decrease in arms spending for swinging industrial output into a surprise contraction during the final two months of 2017.
“The contribution of the military industry to output growth was negative last year,” said Vasily Zatsepin, head of the department for military economics at Gaidar Institute in Moscow. “It will remain negative in 2018-2019.”
While Russia’s 20 trillion-ruble ($347 billion) defense program — the largest rearmament push since the Soviet breakup — has already left a geopolitical mark from Ukraine to Syria, its economic footprint is shrinking. That’s depriving President Vladimir Putin of a stealth stimulus to the economy just as growth stagnates and fiscal policy remains tight. Defense was the federal budget’s second-biggest ticket item last year, creating a multiplier effect as a factor in key areas such as high-value-added manufacturing.
Since the army’s “cycle of saturation” with new types of weapons is past its peak, defense spending as a share of GDP will be on the decline, the Kremlin’s economic aide, Andrey Belousov, said last month. A new defense procurement program through 2027 means military expenditure will also make up a smaller proportion of the budget’s earmarks, according to Finance Minister Anton Siluanov.
As an unreported component of industrial production, defense output has become a part of what VTB Capital calls the “dark matter” of manufacturing, “hindering any meaningful interpretation and creating an uncomfortable sense that the aggregates are being moved by powerful yet invisible forces.”
The challenge in assessing the economic impact of defense production is that its details remain a closely guarded secret. The Federal Statistics Service releases neither raw data on output related to the military nor production indexes for the defense industry as a whole.
Instead, to account for its output, the state agency makes an internal adjustment to production sub-indexes for sectors affected by the military, according to VTB Capital. The exact parameters of the adjustment, and even the list of the sectors involved, aren’t made public, its economists said in a report.
The Federal Statistics Service didn’t comment in response to questions about the defense sector’s contribution to GDP and industrial output and whether official data reflect its performance.
ING Groep NV says two components of manufacturing data — “other transport and equipment” and “fabricated metal products, excluding machinery and equipment” — provide perhaps the best clue. Last year, a significant decline in Russia’s output of “other transport and equipment” went almost hand-in-hand with a broader industrial slowdown or a contraction.
Excluding payments on loans, the state procurement program fell by 40 percent last year in nominal terms, Gaidar Institute’s Zatsepin said. GDP rose 0.9 percent in the last three months of 2017 from a year earlier, compared with an upwardly revised gain of 2.2 percent for the third quarter. After an annual pickup to 1.9 percent in January, the Economy Ministry estimates that GDP growth slowed again to 1.5 percent in February.
The lack of detailed data makes it difficult to assess the defense industry’s broader impact on the economy, according to Dmitry Polevoy, an economist at ING in Moscow. Still, “the military’s contribution may decrease gradually,” he said.
(JN) NATO decidiu expulsar sete diplomatas da missão da Rússia junto daquela organização, na sequência do envenenamento do ex-espião russo Serguei Skripal.
O secretário-geral da NATO, Jens Stoltenberg, indicou ainda que a Aliança Atlântica rejeitou os pedidos de acreditação para outros três elementos da missão da Rússia, que não é membro da aliança atlântica.
“Retirei hoje as acreditações a sete membros da missão russa junto da NATO. Também rejeitei três pedidos de acreditação”, afirmou Stoltenberg, numa declaração à imprensa na sede da Aliança Atlântica em Bruxelas.
Segundo o secretário-geral da NATO, tais medidas enviam “uma mensagem clara à Rússia de que existem custos e consequências face a um padrão de comportamento inaceitável e perigoso”.
E também surgem perante “a ausência de uma resposta construtiva da Rússia” sobre o caso Skripal.
Apesar destas expulsões, Stoltenberg destacou que a Rússia ainda terá uma missão diplomática com 20 pessoas junto da NATO na sede da Aliança Atlântica, na capital belga, o que permitirá a Moscovo manter contactos essenciais com os 28 Estados-membros que compõem aquela organização.
“A decisão de hoje não altera a política da NATO em relação à Rússia. A NATO continua empenhada na abordagem a duas vertentes de uma defesa forte e de uma abertura ao diálogo, incluindo a preparação para a próxima reunião do Conselho NATO-Rússia”, frisou.
Os Estados Unidos e cerca de vinte outros países, entre os quais 16 da União Europeia (UE), anunciaram segunda-feira a expulsão, no conjunto, de quase uma centena de diplomatas russos dos seus territórios, em apoio ao Reino Unido.
Na semana passada, Londres expulsou 23 funcionários russos como represália pelo alegado envenenamento com um gás neurotóxico do ex-espião russo.
Em 4 de março, Skripal e a sua filha foram encontrados inconscientes num parque de Salisbury (sul de Inglaterra) após terem sido expostos a uma substância química que, segundo Londres, foi desenvolvida na Rússia.
O Governo do Presidente Vladimir Putin tem desmentido todas as acusações e exigido provas concretas sobre esta alegação.
O Kremlin considerou as medidas um “gesto provocador”, prometendo responder à altura.
“A Rússia nada tem a ver com essa questão”, insistiu Moscovo.
Decisão de Portugal defenderá interesses nacional, europeu e da NATO
A decisão do Governo português sobre o “caso Skripal” está “em curso” e rege-se pela defesa dos interesses “nacional, europeu e da Aliança Atlântica”, mas também pela “autonomia, prudência e firmeza”, disse à Lusa o ministro dos Negócios Estrangeiros.
“A medida que em cada momento se revelar mais conforme aos interesses nacionais portugueses, aos interesses europeus e aos interesses da Aliança Atlântica, essa será a medida que nós tomaremos, porque são esses os três critérios: o nosso interesse nacional, enquanto país que fala com toda a gente no mundo e que tem uma enorme facilidade de contacto com todas as grandes regiões do mundo, e os interesses europeu e da Aliança Atlântica”, afirmou hoje, em declarações à Lusa, Augusto Santos Silva.
Assim, as medidas que o Governo português decidir “sem precipitação, com autonomia, com prudência, mas também com firmeza”, sublinhou o governante, “são as que melhor respondam a estes três critérios”, acrescentou.
MNE russo diz que expulsões devem-se a “pressões colossais” dos EUA
O chefe da diplomacia russa afirmou hoje que a ação concertada de duas dezenas de países de ocidentais de expulsão de diplomatas russos em resposta ao caso Skripal é “o resultado de pressões colossais” dos Estados Unidos.
“Quando se pede a um ou dois diplomatas para abandonarem este ou aquele país, ao mesmo tempo que se murmuram desculpas ao ouvido, sabemos precisamente que é o resultado de pressões colossais, de uma chantagem colossal que é, infelizmente, a principal arma de Washington na cena internacional”, disse Serguei Lavrov numa conferência de imprensa em Tashkent transmitida pela televisão russa.
China pede “tranquilidade” face a vaga de expulsão de diplomatas russos
China apelou hoje à “tranquilidade” e ao “abandono da mentalidade da Guerra Fria” após a expulsão de diplomatas russos por países em todo o mundo, na sequência do envenenamento do ex-espião russo Sergei Skripal no Reino Unido.
“Os países implicados deviam obedecer à lei internacional e às normas básicas das relações diplomáticas, visando evitar uma maior escalada das confrontações”, disse a porta-voz do ministério chinês dos Negócios Estrangeiros, Hua Chunying.
A porta-voz reagia assim à decisão dos Estados Unidos e cerca de vinte outros países de expulsar, no conjunto, quase uma centena de diplomatas russos dos seus territórios, em apoio ao Reino Unido.
Imprensa russa denuncia nova “Guerra Fria”
A imprensa russa considerou hoje que as expulsões coordenadas de diplomatas russos de 23 países após o envenenamento de um ex-espião russo mergulharam as relações entre Moscovo e o Ocidente num novo “período de Guerra Fria”.
O diário Izvestia titula “encenação russofóbica”, enquanto o jornal Nezavissimaia Gazeta lembra que “há muito que não se registam expulsões coordenadas”.
“A relação entre a Rússia e o Ocidente entra num período de ‘Guerra Fria'”, resumiu o analista Fiodor Loukianov nas páginas do diário Vedomosti, considerando que as expulsões “são particularmente destrutivas para as relações russo-americanas”.
“Está claro que ainda não se chegou ao fim desta escalada, pois é claro que vai ser agravada. Esperam-se medidas ainda mais severas do que as sanções económicas contra a Rússia”, previu.
Para o diário Kommersant, as “medidas, de uma gravidade sem precedentes (…), não são mais do que um novo agravamento das relações” entre a Rússia e o Ocidente.
Em sentido contrário, a rádio independente Ekho Moskvy defendeu que toda a política da Rússia “concentra a energia na autodestruição desde 2014”, ano da anexação da península ucraniana da Crimeia, seguida por uma série de sanções ocidentais.
ONU evita comentar decisão de expulsão mas confirma ter sido notificada
A ONU disse hoje ter sido notificada pelos Estados Unidos sobre a expulsão de um grupo de diplomatas russos, que preferiu não contabilizar, acreditados na missão da Rússia junto daquela organização, mas escusou-se a comentar a decisão.
Um porta-voz da ONU confirmou que a organização internacional recebeu a notificação de Washington mas que, “dada a sensibilidade” da matéria, só podia confirmar que o secretário-geral das Nações Unidas, António Guterres, estava “a seguir atentamente” o assunto.
Na conferência de imprensa diária, o porta-voz de Guterres, Farhan Haq, evitou comentar a decisão de Washington, nem sequer quis precisar o número de funcionários visados pela medida, a respetiva identidade e os procedimentos que se seguem.
Farhan Haq afirmou que as “ações” adotadas pelos Estados Unidos estão sustentadas na secção 13B do acordo firmado em 1947 entre Washington e a ONU, texto que regulamentou o funcionamento da sede da organização na cidade norte-americana de Nova Iorque.
A secção mencionada por Farhan Haq, que o próprio leu parcialmente na conferência de imprensa, estabelece que os diplomatas designados para as missões junto da ONU não podem abusar dos respetivos privilégios para poder residir no país com “atividades não relacionadas com o respetivo caráter oficial”.
Esses privilégios, definidos no artigo 11.º do mesmo acordo, estabelecem, entre outros aspetos, que as autoridades norte-americanas não podem dificultar a entrada e saída da zona onde fica localizada a sede da ONU aos membros das respetivas missões, aos peritos com funções atribuídas pela organização internacional, convidados e representantes de organizações não-governamentais reconhecidas.
Bulgária convoca para consultas embaixador em Moscovo
O Governo búlgaro convocou hoje o seu embaixador na Rússia, Boiko Kotsev, devido ao caso do envenenamento no Reino Unido do ex-espião Serguei Skripal e de sua filha Yulia com um agente químico.
“O primeiro-ministro [Boiko] Borisov ordenou ao embaixador que regresse a Sófia para manter consultas com o Governo”, informou o Executivo em comunicado.
A Bulgária, que assume este semestre a presidência rotativa da União Europeia, é um dos 11 países do bloco comunitário que não decidiram, na segunda-feira, expulsar qualquer diplomata russo devido ao caso Skripal.
Na semana passada, Borisov declarou em Bruxelas que a Bulgária não tencionava expulsar diplomatas russos pelo facto de não existirem “provas firmes” contra Moscovo.
A Bulgária, que integra a NATO, mantém tradicionalmente boas relações com a Rússia.
Moldávia expulsa três diplomatas russos
A Moldávia anunciou esta terça-feira que também vai expulsar três diplomatas russos, no âmbito da ação internacional coordenada de resposta ao envenenamento do ex-espião russo Serguei Skripal no Reino Unido, anunciou o Ministério dos Negócios Estrangeiros moldavo.
O embaixador russo em Chisinau, Farit Muhametshin, foi informado da decisão.
A Moldávia, afirma o MNE num comunicado, considera o ataque a Skripal “uma ameaça à segurança coletiva e à lei internacional”.