https://tass.com/pressreview/1416477
Press review: Can EU really abandon Russian energy and retail exodus in Russia underway
Russia and Ukraine agreed upon creating humanitarian corridors for the evacuation of residents as well as on delivering food and pharmaceuticals to the areas of military action. This is the only publically expressed result of the second round of talks between the delegations of the two countries held in Belarus on Thursday. On the same day, Ukrainian President Vladimir Zelensky offered to meet his Russian counterpart Vladimir Putin in person to discuss all disagreements. Meanwhile, Moscow thinks that Kiev is intentionally stalling negotiations counting on Western help.
"When president Zelensky asked for the negotiations, president Putin immediately concurred and sent a delegation. Then, president Zelensky changed his mind. Perhaps, Americans told him not to rush. Then, [Ukraine’s representatives] said after all, no, we will come," Russian Foreign Minister Sergey Lavrov said. Director of Russia’s Foreign Intelligence Service (SVR) Sergey Naryshkin concurs: "Washington hopes that we will get stuck in this operation and perish while they can calmly get busy with ‘cleaning up’ the Middle East, Eurasia and the Asia-Pacific region. This won’t happen."
Head of the Strategic Assessments Group at the Institute of World Economy and International Relations Sergey Utkin also did not rule out that the talks may be prolonged intentionally and in general one shouldn’t expect serious progress from these meetings at the moment. "The Ukrainians, feeling the support of the West and of other countries, count on Russia realizing the hole it has dug itself into and backtracking. Russia presents demands that are unlikely to be accepted under the conditions when the Ukrainian armed forces continue to be capable of resisting while the majority of the Ukrainian population obviously rejects Russia’s presence. Apparently, so far both sides don’t think that their situation has worsened enough to abandon their stated demands and principles," the expert said.
Nezavisimaya Gazeta: Europe urged not to renew gas contracts with Russia
Russia continues to supply gas to Europe, including via Ukraine. Geopolitical tensions, low supplies in European gas storage facilities and windless conditions in the North Sea led to a cubic meter of gas costing more than $2. The price hike is also provoked by the not quite realistic plans on replacing Russian gas. On Thursday, the International Energy Agency (IEA) proposed the EU not to conclude new contracts with Gazprom. Currently, the renewal seems unlikely. However, if the tensions subside, there is a chance to renew the contracts.
"In the current political context, long-term contracts cannot be renewed, yet the EU has not yet introduced a full trade embargo against Russia - that is, the current contracts will be fulfilled," Stanislav Mitrakhovich, a senior expert at the National Energy Security Fund, told the newspaper, adding that Russia is unlikely to cut the supplies since "the sales of gas and other energy resources to Europe alone bring Russian suppliers about 1 bln euros a day at the current prices and this is precisely what allows to soften the sanctions blow."
The deliveries of Russian gas to Europe remain the only solution to Europe’s energy crisis both in 2022 and in 2023, senior analyst at Esperio Anton Bykov thinks, noting that gas supplies in European storage facilities are at a record low. However, according to Finam’s Sergey Kaufman, it is unlikely that any European countries will be willing to renew long-term contracts with Gazprom. "One of Europe’s key energy goals at the moment is to lower the dependency on Russian gas. Of course, this cannot be accomplished at once, but the IEA thought that by sacrificing the ecology and economic growth it is possible to decrease the import from Russia approximately by a third, although it does seem like a rather radical scenario," the expert said.
Bykov noted that there is simply no alternative to Russian gas supplies for European consumers so, in his opinion, sanctions risks for the deliveries of Russian hydrocarbons to Europe "look like European energy suicide." "We talked multiple times about European practicality, let’s hope, it will be manifested this time again. If this does happen and by the end of March 2022, Russia and Ukraine will fight exclusively at the negotiating table, then the European countries will need to swiftly request the increase of gas supplies from Russia," the expert concluded.
Kommersant: Large foreign retailers suspend operation in Russia
Several of the world's largest retailers, including IKEA, Mango, H&M Group, suspended operating in Russia at the same time. This may result in major losses for the retail chains and the closing of 40-50% of stores for shopping centers. Proprietors will aspire to find new tenants among Russian, Chinese and Turkish retailers but this is unlikely to happen immediately.
Mikhail Burmistrov, General Director of Infoline-Analytics doubts that many international chains intend to leave Russia for good. "Currently, they are guided by public opinion abroad, which stimulates them to stand up against military actions this way," he thinks. He does not rule out their reopening if the active phase of the military operation is over by the end of March. Managing partner at Vanchugov and Partners Alexey Vanchugov says that the complete departure of large retailers is connected to severe financial losses over fines on leases and payments to staff, while Vasily Malinin, a partner at Rustam Kurmaev and Partners, says that breaking lease agreements is a complex procedure which not all retailers will manage painlessly.
Managing partner at ITD Properties Inessa Samokhvalova thinks that it is mostly large shopping centers that risk losing leaseholders. However, according to her, the major blow would be the closure of movie theaters that traditionally make a profit on American movies while generating traffic for the shopping centers.
According to Vanchugov, the departing retailers may be replaced by chains from Turkey and China. Managing partner at RedStone, Indira Shafikova, notes that Russia already has its own brands shaped, such as Brusnika, 12storeez, Akhmadullina Dream, yet they are still small. Burmistrov doubts that it will be possible to accomplish the switch swiftly. "The market is very turbulent, any foreign business will prefer to wait for it to stabilize," he thinks.
Nezavisimaya Gazeta: Russia, EU face largest relocation of workforce
Europe and Ukraine are encountering the largest simultaneous relocation of residents. Ukrainians are leaving their country at a rate of one million per week. Western experts expect that at least 4 mln Ukrainians will arrive in the EU, while some forecast up to 7 mln arrivals. For the EU, this means not only additional social spending but also a significant influx of workforce, while for Russia a prolonged conflict will mean the loss of migrant workers and qualified specialists.
Over the past decade, Europe has already encountered several waves of refugees not adapted in terms of language, culture, education, values, lifestyle that has caused serious economic and social problems in the EU, Head of Macroeconomic Analysis at Finam Olga Belenkaya said. "The necessity to accommodate millions of migrants may negatively impact the European economy and state finances, especially taking into account the significant growth of state debt and budget deficit of EU countries during the pandemic," she explained. That said, some European enterprises can use the labor of qualified Ukrainians who are better adapted to European norms. Europe is aging, and it needs new labor resources, concurs Andrey Vernikov of UniverCapital.
Russia is also losing workers over the Ukrainian crisis since for migrant workers from Middle Asian countries the conditions of converting their Russian salaries into dollars and national currencies have worsened significantly. According to Urmatbek Kurbanbaev, chair of Kyrgyz civic organization in the Sverdlovsk Region, some migrant workers had already canceled their plans to work in Russia, pointing out that only those who are confident of finding a job arrive while those without specific guarantees prefer to stay at home.
"The rapid development of Russia’s isolation with numerous economic, industrial, logistics, technological ties with a significant part of the world being blocked is already causing the outflow of foreign specialists. The outflow of some migrants is possible as well as of some qualified Russian specialists," Belenkaya thinks, since many specialists in Russia were working remotely, including in foreign companies while now this has become complicated. That said, the expert forecasts the growth of unemployment in some sectors due to the decreased business of Russian companies dealing with the import of products, raw materials and components.
Rossiyskaya Gazeta: Russian consumers won’t lose access to foreign electronics, cars
South Korean cars, electronics and appliances will continue to be delivered to Russia, the South Korean Ministry of Trade, Industry and Energy said. Yet large software producers such as SAP and Oracle announced that they were suspending operations in Russia. According to experts, this is the best time for import substitution.
"Among the users of SAP and Oracle products in Russia are the state sector, banks, businesses. Those companies potentially leaving the Russian market will deprive consumers of the opportunity to obtain new software products, may create problems with updating the already installed programs and obtaining technical support. Additionally, the risks in the sphere of data protection and critical infrastructure will possibly grow," Renat Lashin, executive director of Otechestvenny Soft explained.
And if mid-size companies have a successful experience of switching to domestic solutions such as PostgreSQL and 1С, then larger clients may have problems due to the scale of the task and the complexities of integration, according to German Klimenko, Council Chair of the Foundation for the Development of Digital Economy. However, according to Lashin, the switch to domestic software is quite doable even in large companies. "Since 2014, we have accumulated an extensive successful experience of switching to Russian solutions," he asserted.