Russia in Review

Russia in Review: a digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for September 29 – October 3, 2014

I. U.S. and Russian priorities for the bilateral agenda.

NATO-Russia relations, including transit to and from Afghanistan:

• Danish Gen. Knud Bartels, chairman of NATO’s Military Committee, said Russia could hold territory in eastern Ukraine permanently, as it did following military conflict with Georgia in 2008. “I do not know what the Russians are going to do but I see no reason to exclude that possibility.” (The Hill, 10/02/14)
• NATO spokesman Jay Jansen: “Hundreds of Russian troops, including Special Forces, still remain inside Ukraine. Around 20,000 Russian troops are still deployed in the vicinity of Russia’s border with eastern Ukraine.” (Reuters, 10/02/14)
• US “Ironhorse” armored cavalry unit, which consists of 700 soldiers, 20 M1A1 Abrams battle tanks, and Bradley and Stryker armored fighting vehicles, will deploy across Baltic States over next two weeks. (Reuters, 10/01/14)
• NATO’s Secretary-general Jens Stoltenberg: “I see no contradiction between a strong NATO and our continued effort to build a constructive relationship with Russia. Just the opposite.” (Reuters, 10/01/14)
• Asked about integration of Montenegro, Macedonia and Bosnia into NATO, Russian FM Lavrov told Bosnian daily Dnevni Avaz: “With regards to the expansion of NATO, I see it as a mistake, even a provocation in a way. This is, in a way, an irresponsible policy that undermines the determination to build a system of equal and shared security in Europe, equal for everyone regardless of whether a country is a member of this or that bloc.” (Reuters, 09/29/14)

Cyber security:

• Putin called for more steps to ensure Internet security in the country, warning that better protection of communications networks was vital to ensure Russia’s sovereignty and thwarting leaks of confidential data. While he vowed to protect Internet freedom, industry advocates remain skeptical. (WSJ, 10/01/14)
  • Putin: “We’re seeing that some countries are trying to use their dominant position in the global IT-space to achieve not only their economic goals, but also their political and military goals,” however, he said “we don't want to create a wall.”

Other bilateral issues:

• Russian state-controlled news outlets – First Channel, NTV, Rossiya 24 – cast pro-democracy protests in Hong Kong as US-organized plot. (WSJ, 09/30/14)
  • Rossiya 24 anchor: “According to the Chinese press, the leaders of the movement received special training from the American intelligence services.”
  • First Channel anchor: “Beijing has said the protest organizers are linked to the American State Department.”
• Anonymous Obama administration official: “The main obstacle to Russian participation [in attacking ISIS in Syria] is Moscow’s position that ‘this can only be taken with permission of the Syrian government or through the U.N.,’ which is not something we accept. If Russia thinks that somehow they’re going to gain some kind of shift in U.S. policy, that is not going to happen.” (Reuters, 09/28/14)
• Russian FM Sergei Lavrov: US unable to change its Cold War “genetic code” and must abandon its claims to “eternal uniqueness.” (Guardian, 09/27/14)
  • Speaking at UN General Assembly, Lavrov also said Ukraine crisis was result of  coup d’etat backed by US and EU for purpose of pulling Kiev out of its “organic role as a binding link between” east and west, denying it the opportunity for “neutral and non-bloc status.”

II. Russia news.

Domestic politics, economy and energy:

• Russia’s energy minister, Alexander Novak, said he hoped deal in gas dispute with Ukraine is reached this week, but Kiev must pay debts before Moscow resumes gas supplies. (Reuters, 09/30/14)
• Bloomberg survey: Lowest oil prices in more than two years threaten to tilt Russia’s $2 trillion economy toward recession. (Bloomberg, 09/26/14)
  • Russia needs Urals, its main export crude blend, to trade at $100 per barrel or higher to avoid a recession, according to 58% of respondents in survey of 19 economists.
  • Urals prices fell below $100/barrel on Aug. 18 and averaged $98.28 from Aug. 15 to Sept. 14, according to Russian Finance Ministry adviser Alexander Sakovich. This was first time average price for four-week period was below $100/barrel since June 2012.

Defense:

• Commander-in-Chief of the Land Forces, Col.Gen. Oleg Salyukov: “In accordance with the decision of the Supreme Commander-in-Chief, by 2020 the ground forces will be 70 percent equipped with new modern weaponry and military hardware. In total, more than 5,000 new and some 6,000 modernized units of armored vehicles and military hardware, as well as 14,000 military vehicles, are to be purchased.” (Ria Novosti, 10/01/14)
  • According to Salyukov, Russian Land Forces will receive upgraded T-72B3 tanks, BTR-82A armored personnel carriers, BMP-3 infantry fighting vehicles, and modernized BMP-2 vehicles.
• Russia celebrated “Day of Russian Land Force” on Oct. 1 to honor Russian military land forces dating back to time of Kievan Rus princes. (Ria Novosti, 10/01/14)
• Vostok-2014 large scale military drills, which involved over 100,000 servicemen, thousands of tanks and aircraft, and dozens of ships concluded on Sept. 25 in Russia’s Far East. (ITAR-TASS, 09/25/14)

Security, law-enforcement and justice:

• Russia opened criminal case into what it called Kiev’s genocide of Russian-speaking residents in eastern Ukraine. (Reuters, 09/29/14)
  • Investigative Committee of the Russian Federation: “The Investigative Committee has opened a criminal case into the genocide of the Russian-speaking population of Ukraine’s southeast. . . Unidentified representatives of Ukraine’s senior political and military leadership, National Guard and the Right Sector gave orders aimed at the intentional annihilation of the Russian-speaking citizens.”
  • In tit-for-tat response, Ukrainian prosecutor’s general’s office opened criminal investigation against officials of Investigative Committee of the Russian Federation, accusing Russian officials of “carrying out illegal interference. . .aimed at aiding the terrorist organizations ‘Donetsk People's Republic’ and ‘Luhansk People’s Republic’ in their criminal activities and obstructing the performance of duties by government officials.” (Reuters, 09/30/2014)

Foreign affairs and trade:

• Putin dismissed Western sanctions as “utter foolishness” and said they would not stop Russia from developing into a stronger economic power. Addressing worried financiers at VTB Russia Calling investment conference about weakening economy, capital flight, and possible increase in state intervention, he said Russia was well placed to weather storm. (Reuters, 10/02/14)
• Putin will attend the Asia-Europe Meeting (ASEM) in Milan on October 16-17, affording him first opportunity to meet with top European leaders since D-Day celebrations in Normandy this past June. (Reuters, 09/29/14)

Russia's neighbors:

• Merkel to Putin: you have a duty to temper pro-Russian separatists in Ukraine. “The German chancellor emphasized the responsibility Russia has to exert a moderating influence on pro-Russian separatists. She said the negotiated ceasefire needs to finally be respected in its entirety,” German government spokesperson Steffen Seibert said in a statement. (Reuters, 10/02/14)
• Putin said he hoped Ukraine’s parliamentary election on October 26 would help bring stability to the country, saying it was in Russia’s interests: “I hope Ukraine’s parliamentary elections will be worthy and there will finally be long-awaited political stability” and described Ukraine as Russia’s “most brotherly” neighbor. (Reuters, 10/02/14)
• Russia cut gas supplies to Slovakia by 50% without warning, according to Slovakian Prime Minister Robert Fico, who said “[Russian] gas has become a tool in a political fight … This isn't about a lack of gas, it’s about playing with gas supplies as an instrument of political posturing.” (EU Observer, 10/02/14)
• Polish Prime Minister Ewa Kopacz unveiled plans to increase defense spending from 1.95% to 2% of country’s GDP by 2016. Funds will be used to acquire new weapons and military equipment, Kopacz said in inaugural speech at Polish parliament. Planned spending hike will generate estimated 800 million zloty (US $270 million) for military procurement in 2016. (Defense News, 10/01/14)
  • Barroso to Putin: “Amendments to Association Agreement can only be decided between Brussels and Kiev. The Association Agreement remains a bilateral agreement and ... in line with international law, any adaptations to it can only be made at the request of one of the parties and with the agreement of the other.” (Reuters, 10/01/14)
  • Barroso: EU has “strong concerns” about decree passed by Russian government that threatens new tariffs on Ukrainian exports. Decree, which imposes Russian tariffs if Ukraine lowers its import tariffs on goods from before EU 2016, undermines ceasefire deal, according to Barroso.
• Federation Council (Russia’s upper parliament house) and Kazakhstan’s Majilis (lower parliament house) ratified treaty on Eurasian Economic Union, bringing Putin’s Custom’s Union closer to reality. (Radio Free Europe, 10/01/14)
• EU spokesperson Maja Kocijancic: EU noted some “encouraging developments” since September 5 ceasefire in Ukraine, but other parts of peace deal “will need to be properly implemented” for EU sanctions against Russian officials, oil industry, defense firms, and banks to be removed. (BBC, 09/30/14)
• German Chancellor Angela Merkel said there are good reasons to continue EU’s energy partnership with Russia for time being, but in medium- to long-term it might be necessary to reconsider that partnership. (Reuters, 09/29/14)
  • Merkel: “It’s not our goal to completely sever our dependency. Nevertheless we have naturally to think about what we might have to change in the medium- to long-term as far as energy policies go if there is a continued violation of basic principles.”
• Russia issued new warning that it would retaliate if EU and Ukraine pushed ahead with moves to implement the free-trade Association Agreement. (Reuters, 09/29/14)
  • Kremlin spokesman Dmitry Peskov: Russia is “ready to take measures in response if (implementation of the agreement) is carried out in violation of previously reached agreements.” (Reuters, 09/29/14)

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