MOSCOW, October 10 (RIA Novosti)
The Kremlin extends to the West a hand clenched into a fist / Moscow unlikely to cross the T's in conflict with Tbilisi soon / Russia may have to protect its citizens in Transdnestr / Severstal announces layoffs on U.S. markets / Iran may take over part of Gazprom's market / Russian tycoon loses one foreign asset after another
Moskovsky Komsomolets
The Kremlin extends to the West a hand clenched into a fist
The Kremlin policy regarding the West is one of taking a step forward and then a step back.
Hardly had President Dmitry Medvedev offered to shake hands with the West when Foreign Minister Sergei Lavrov denounced the UN for secretly signing a cooperation agreement without all UN member states reading the draft.
In fact, there is no contradiction between these two signals. The Kremlin has a dual task of improving relations with the West without making compromises on any of its vital interests.
The Kremlin boss was right when he criticized the United States for its "bubble economy." But what economic solutions can Russia offer the world? Yes, it has enough money to bail out Iceland, but can an oil-dependent economy be presented as a model to other countries?
Critics in the West have pointed out that many of the Kremlin's "new ideas" repeat the principles formalized by the European powers in the 1990 Paris Charter. Still, Medvedev's policy speech was a step in the right direction.
Two top U.S. diplomats have made important statements this week.
Former Secretary of State Henry Kissinger has called for balancing U.S. policy regarding Russia, but David Merkel, deputy assistant secretary for European and Eurasian Affairs to the current State Secretary, spoke in the spirit of Georgian President Mikheil Saakashvili.
According to him, Ukraine had a right to sell weapons to Georgia, and Georgian leaders are veritable angels compared to the demonic Russian leaders, who are violating the Medvedev-Sarkozy agreement several times a day.
These two statements have cast a bright light on the essence of Washington discussions on the future U.S. policy toward Russia. The best Moscow can do in this situation is demonstrate readiness to protect its interests and at the same time agree to negotiate.
Medvedev expressed these two ideas quite clearly in his speech at the World Policy Conference in Evian, France.
But French President Nicolas Sarkozy interpreted it as an attempt to drive a wedge between the U.S. and Europe. This is why he said Moscow would not split the West.
Medvedev was right to point to differences over Russia between the U.S. and the bulk of "old Europe," as well as between EU members. And it would be in Moscow's interests to try to deepen the gap between them.
In other words, not everything Medvedev said in Evian was good, but the overall impression was quite positive.
However, the momentum of anti-Russian policies has become too strong in the West, and not even a dozen speeches like the one Medvedev made in Evian can turn the process back.
Kommersant
Moscow unlikely to cross the T's in conflict with Tbilisi soon
President Dmitry Medvedev underlined when speaking in Evian that Russia would pull out from the buffer zones dividing Abkhazia and South Ossetia from core Georgia ahead of schedule.
It was a signal to the West that Russia would rather the conflict be seen as a local problem, an unfortunate hitch in its strategic relations with Western countries. However, it is not yet time to draw the line in the Russian-Georgian conflict, said Sergei Markedonov, head of the ethnic relations department at the Institute of Political and Military Analysis.
Russia's military and political presence in the two former autonomous areas within Georgia seems a foregone conclusion now, the analyst went on. After the Kremlin recognized them as independent states, the Russian government automatically concluded they have no relation to Georgia whatsoever now.
The problem is, this interpretation of the issue is not shared by everyone. Officials in Georgia insist that peacekeeping operations should continue in Abkhazia and South Ossetia, only international organizations should be put in charge. When they say "complete pullout," they really mean replacing Russian troops in the two "breakaway republics" by, or at least making them cooperate with, European blue helmets.
Europe's position is even more complicated. On the one hand, EU countries recognize Georgia's territorial integrity, and PACE demanded that Moscow annul its recognition of Abkhazia and South Ossetia. On the other hand, [French President] Nicholas Sarkozy in fact recognized that the two were outside Georgia's legal framework by agreeing to international consultations on their status.
German Chancellor Angela Merkel acted similarly, having introduced the term "Kernland" which means the core territory of Georgia, Markedonov added.
The EU as a whole is not up to a full-scale confrontation with Russia, not over Georgia at any rate. However, until recently Europe tried to avoid situations where it had to make a tough choice. The French president's policy is an eloquent example of that - he agreed in Moscow that Russian troops pull out only from the buffer zones, but revised his own "Moscow" decision in Tbilisi.
This leads us to expect debates on the issue immediately after the "early pullout" promised by Moscow. For Russia, going back on its recognition of the two republics now is unthinkable, as it would kill its reputation. A move like that would trigger more tensions in the Caucasus, where weakness is never forgiven.
However, Moscow is in no position to prevent the issue from being brought up at the international level. Without that, the Kremlin's actions during the "Five Day War" will never have even a trace of legitimacy for the international community. This leaves us with just one possible solution: To minimize the problem or even to get it bogged down in dragged-out consultations, Markedonov concluded. The West wants to bring the issue up at the international level - fine, let's talk.
Nezavisimaya Gazeta
Russia may have to protect its citizens in Transdnestr
Dmitry Medvedev's promise to protect the Russian citizens who live in Transdnestr might become called for in the near future in case the situation over settling the conflict, with Russia taking the role of the key mediator, does not improve.
Starting this Sunday, Moldovan ultra-right parties have been holding anti-Russian rallies, with skirmishes occurring between Russian-speaking residents and Moldovan pro-Romanian nationalists. Provoking Russia to use force, which has been tested by Georgian President Mikheil Saakashvili, seems to be favored by Moldovan extremists as well.
The current situation is particularly disturbing as it is reminiscent of the tensions that occurred at the end of the 1980s-the beginning of the 1990s, which started similarly, with settling scores between the territory's pro-Romanian and pro-Russian residents. The latter demanded the former move beyond the Prut River, which borders Romania, while the former claimed the pro-Russian residents should relocate to the other side of the Dniester. Finally, in 1992 Russia had to bring its peacekeeping troops into the territory to stop the military confrontation. Today, Moldovan nationalists demand that the troops should be withdrawn.
Under such conditions, resuming the negotiations between Chisinau and Tiraspol, which was promised by the Kremlin a while ago, is not worthwhile as a possible alliance between the Moldovan and Romanian officials has always been Transdnestrian leaders' argument.
Whatever the scenario, it is Russia that will be blamed either for neglecting the events that have been occurring in Moldova or for working to protect the Russian-speaking residents in Transdnestr. By responding to provocations, Russia will lose its status of mediator and peacekeeper, while by ignoring them the country will lose its image of the state which takes care of its citizens.
Moscow is stuck with its promise to resolve the conflict, arranging negotiations between Moldovan and Transdnestrian leaders. It offered no peacekeeping plans that would satisfy both sides but chose to claim it would accept any decision taken by the opposing sides. Yet it is obvious that Moldova and Transdnestr will never come to terms.
The lesson that should be learnt from the South Ossetian conflict is the fact that postponing conflict resolution in former CIS countries is not in the interest of the sides involved. By taking the onlooker position, Russia proves a common opinion that the long-brewing tensions in the region are advantageous for the country. At least, one can draw this conclusion judging by the lack of any strategy applied to the Transdnestr conflict by Russia's Foreign Ministry. On the other hand, the lack of a strategy could also be a strategy - although it is a path that leads nowhere.
Kommersant
RBC Daily
Severstal announces layoffs on U.S. markets
Severstal has become the first Russian company to temporarily lay off workers in the United States. From October 12, 800 employees (more than 20% of the workforce) of West Virginia-based Severstal Wheeling Holding Co., formerly called Esmark Inc., purchased this June for $1.25 billion by businessman Alexei Mordashov, CEO of Russia's second largest steel company, will be laid off due to reduced market demand.
Other Russian metallurgical companies, including Evraz Group and the Pipe Metallurgical Company (TMK), which have also bought assets in the United States, may feel the crisis soon.
This year, Evraz Group purchased the Portland-based company Oregon Steel Mills for $2.3 billion and Canada's IPSCO, one of the world's leading producers of steel plate and pipe, for $4 billion.
Evraz subsequently resold its U.S. pipe plants to TMK for $1.7 billion.
Russia's Magnitogorsk and Novolipetsk iron-and-steel works said they preferred production cuts to layoffs. Severstal declined to comment on its plans as regards Russian and foreign plants. "We are analyzing the situation," a corporate spokesman said.
Severstal is unlikely to lay off U.S. steel workers en masse because this would negatively affect its reputation and long-term purchases in a strategic region, Capital investment group analyst Pavel Shelekhov said.
He said cutting back on expenses was the optimal anti-crisis scenario, and that automotive giant Ford Motor Company owed its existence to massive layoffs and other similar measures.
The crisis could hit U.S. subsidiaries of Evraz and TMK after Severstal Wheeling, Dmitry Baranov, senior expert at Finam Management, said.
He said the U.S. construction market now receiving Evraz and TMK products was more prone to crisis than other segments.
Maxim Semenovykh, a metals and mining analyst at Alfa Bank, said a crisis could hit the car-body sheet and flat rolled products market in early 2009, as the car-production market would not notice the crisis while the industry was fulfilling long-term contracts agreed until late 2008.
On Thursday, Evraz and TMK said their U.S. production plans remained unchanged.
Gazeta
Iran may take over part of Gazprom's market
Turkey plans to sign an agreement to import natural gas from Iran's South Pars deposit within weeks. Turkish Energy and Natural Resources Minister Hilmi Guler said gas would be imported for domestic purposes and for re-export to Europe.
Analysts say Iran is unlikely to attain its gas ambitions soon, but in future Russian energy giant Gazprom may lose its monopoly position in Armenia.
Iran and Turkey considered signing a similar agreement last August, but their talks were derailed by the United States, which wants to push Iran into an economic isolation.
To be able to export natural gas to Europe, Turkey will use its quotas in the Nabucco project, which provides for exporting gas to Austria across Turkey, Bulgaria and Romania.
Iran has large resources of natural gas but no transportation routes.
The 1,200-km (746-mile) IGAT-1 pipeline with a capacity of 9.6 billion cubic meters annually, which is pumping associated petroleum gas to the country's northern industrial centers (Isfahan, Kazvin, Resht and Tabriz) was built in 1970 and badly needs modernization.
The 600-km (373-mile) IGAT-2 pipeline with a capacity of 27 billion cu m, designed to link the Kangan and Nar gas deposits to offshore oil deposits in the Gulf, is still under construction.
Moreover, the Nabucco project is hanging in the air, and so Iran now has only one operating export gas pipeline. It connects it with Armenia and was commissioned in 2007. However, Iran has so far not started exporting gas to Armenia along it because an additional 140 km (87 miles) of pipeline need to be built in Armenia.
Lusine Arutyunyan, press secretary of Armenia's Energy and Natural Resources Ministry, said yesterday that the date for starting the import of Iranian gas to Armenia would be decided at talks underway in Tehran.
On October 5, Rasoul Salmani, director of the gas export operation office of the National Iranian Gas Company (NIGC), said Iran would start gas exports to Armenia by October 13.
The Armenian authorities say the Iran-Armenia gas pipeline is not devised as an alternative to Russian gas deliveries.
Russia's Gazprom annually supplies Armenia with approximately 1.7 billion cu m of gas, or 100% of its gas requirements.
However, analysts say Armenia might eventually terminate its cooperation with the Russian gas monopoly, because Russian gas prices keep growing and Georgia is bound to raise transit tariffs for Russian gas again.
Vedomosti
Russian tycoon loses one foreign asset after another
Next to a 20% stake in Magna, Russian metals tycoon Oleg Deripaska has lost a 9.99% share in the German construction holding Hochtief. The stake passed to Commerzbank, which had provided the industrialist with cash to buy the stock.
Konstantin Panin, deputy general director of Basic Element, Deripaska's holding company, disclosed the news. Jutta Hobbiebrunken, a Hochtief spokeswoman, confirmed it. According to Sabine Fuchs, a Commerzbank representative, the securities were held by Commerzbank as collateral. The bank provided the loan to buy the stake. Under the terms of the contract, the stake changed hands as BasEl stopped financing it.
Commerzbank and Goldman Sachs represented BasEl's interests as it bought stock last year. Early in May, Deripaska's Rasperia Trading bought 3% of Hochtief stock. The block could cost 160 million euros. By the middle of the month, the company increased the stake to 9.99% by paying no less than 390 million euros for the papers. But yesterday, the 9.99% of Hochtief traded at 169.2 million euros, i.e. Deripaska could lose about 340 million euros.
"It was a portfolio investment. We saw Hochtief shares drop in value. Withdrawal [from the company's equity] was a sound financial decision," Panin said.
A week ago, because of a margin call, Deripaska had to part with a 20% stake in the Canadian producer of automotive parts, Magna. The market value of the shares purchased for $1.54 billion slipped by 41%. BNP Paribas Bank, which provided the holding company Russian Machines with a loan on stock used as collateral, sold the stake after Russian Machines refused to compensate for the fall.
Yegor Fyodorov, a Bank of Moscow analyst, said: "If it were a repo deal, the bank could leave the shares for itself, or return them in exchange for money." Mikhail Pak, an analyst at Metropol brokerage, said that since the construction business is very capital intensive, and BasEl was loaned up, it shed Hochtief. Panin said that Basic Element had the necessary liquidity to honor all its obligations.
In April 2007, Deripaska paid 1.2 billion euros to purchase a 30% stake in another large European construction company, Strabag, and later a 30% stake in Russia's largest builder, Transstroi Group.
Strabag has many projects under way in Russia, so Deripaska will keep this investment, Pak said. Panin said that "investments in Strabag are of strategic value, and we are not planning to give them up." Deripaska said he is not going to pull out of Strabag, a Strabag spokesman said.
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