Foreign media digest for June 6, 2014

The West is ready to impose sectoral sanctions on Moscow.
The Wall Street Journal.
Leaders of the world’s top seven economies threatened to impose tougher sanctions across the Russian economy unless it meets new requirements for easing tensions with Ukraine. “We are ready to impose tougher sanctions and additional measurements to force Russia to pay for its actions.” the G7 statement on Ukraine says. “German Chancellor Angela Merkel says the other measures would become necessary if Russia does not stop sending separatists across the border and does not recognize the legitimacy of Ukraine’s election of Petro Poroshenko as its next president. She thinks Ukraine also needs a stable gas supplies from Russia”, the authors write.

Putin is backing down because he got what he wanted.
Foreign Policy:
Professor of Harvard University Stephen Walt proposes to consider what Putin has achieved in the past few months. First, he has put the idea of a further NATO expansion on the back burner for a long time, and maybe forever. Second, Putin has restored Russian control over Crimea, an act that was popular with most Crimean residents and most Russians as well. “Third, Putin has reminded Ukraine’s leaders that he has many ways to make their lives difficult. No matter what their own inclinations may be, it is therefore in their interest to maintain at least a cordial relationship with Moscow,” the observer continues. Fourth, the tale of a “revived” NATO is wishful thinking at best and pure fiction at worst. “Finally, it seems that Russia signed its new 30-year, $400 billion gas deal with China out of a sense of desperation and that the deal is a losing proposition. Hardly: The price China reportedly agreed to pay is slightly less than what Russia charges its European customers, but it is more than double the price that customers in the Commonwealth of Independent States cough up, and it will still earn Gazprom a tidy profit.” the author assures. “To sum up: Putin’s maneuverings look like a failure only if you believe his goal was to dismember Ukraine completely or re-create the old Soviet Union. By contrast, if you think his primary objective was to keep Ukraine from joining a U.S.-led “sphere of influence” in Europe, then his handling of the crisis looks adroit, ruthless, and successful,” the observer thinks.

Both Russia and US win from Ukrainian crisis.
Both the White House and Kremlin want to split the world in two parts. In order to succeed they need to create new justifications that force our countries to decide what side to choose. Barack Obama will announce this conception at G7 summit in Brussels. “The U.S. will be the guarantor of the order in Europe, will stay against Russian aggression and will be privileged partners in economic support to Ukraine and other allies for a long period of time,” the author writes. “Washington consider these steps as a big economic profit in the future. This is not only about future energy deals, but about the guarantees of the North Americal military industry immediate orders.” The NATO missile defence system requires from 3 to 5 billions dollars. This new arm race is extremely dangerous, as it aims to expand the region’s geostrategic NATO (read U.S.) with approaching the border with the Russian Federation, in order to exert political and military pressure that puts Washington to the rank of hegemonic supremacy. “It is absolutely blatant that Moscow is quite concerned with these new and aggressive obligations of Americans in Europe, the author sums up. “The manners are more warlike and less political.”

Andrii Deshchytsia: It is only up to Russia to end the violence in Ukraine’s east.
The acting minister for foreign affairs of Ukraine expands this thesis in his own article entitled “Russia, take your terrorists away” for Radio Liberty. “If Russia wants to end the violence, it is welcome to do so –by taking its terrorists back home and not sending any new ones. But it is blatantly hypocritical of Russia to encourage and foster terror on the ground and at the same time blame Ukraine for it,” the minister stresses. The Ukrainian government keeps hearing calls to “be nice” to the militants and to talk to them. “Who would negotiate on their behalf? Igor Girkin, also known as Strelkov, an officer in Russia’s foreign intelligence agency who gave orders to kill Ukrainians and is now calling for Russia to invade Ukraine? Or other similar Russia-backed terrorist leaders?” Deshchytsia asks rhetorically.

Britain’s Lloyds Bank pulls out of Rosneft-BP loan.
The Times:
“Lloyds Bank has withdrawn up to $2 billion trade finance deal involving oil major Rosneft, in a development highlighting the growing unease among Western banks in funding Russian deals.” Robert Miller writes for the Times. Lloyds, along with Deutsche Bank, HSBC and Bank of China was a mandated lead arranger on the loan to finance BP’s purchase of crude oil and refined products from Rosneft. The banker, who knows the agreement details tells Reuters: “Lloyds walking away doesn’t change anything. Lloyds is not a Russian player, something will get done anyway.” Rosneft has become increasingly reliant on pre-payment loans as other sources of financing, including the bond markets, dry up for Russian companies. Many Russian bankers have acknowledged growing difficulties in raising funds due to tensions with the West and sanctions.

Kiev tries to quickly integrate its energy sector with the West.
Financial Times:
With pressure from the east piling up, Kiev’s pro-western government is shifting gears to more swiftly integrate its energy sector with the west. The Ukrainian government had decided to unbundle Naftogaz, the debt-laden state gas and oil company, into separate domestic supply, transit and storage companies. This is the step to receive the so-called 3rd Energy Package of the European Energy Charter. In Kiev, the move is seen as a step towards diversification and, in turn, a break from heavy energy dependence on Russia. The long-term aim, according to Ukrainian officials, is to shift Ukraine’s current role as a transit zone for Russian energy so that it becomes an integrated part of the EU market, a regional energy hub. Dragon Capital, a Kiev-based investment bank, informs its investors that the proposal to shift the delivery point for Russian gas exports to the EU will be severely opposed by Gazprom, as this would greatly facilitate reverse gas flows between Ukraine and the EU.
Serbia will start the construction of Gazprom’s South Stream gas pipeline in July.
Die Presse.
Serbia does not pay attention to the conflict between Russia and the EU, Austrian Die Presse writes. Despite the EU decision to delay the start of construction of South Stream gas pipeline, Serbia could start building their leg in July, deputy Head of Project Management Department of Gazprom Alexander Syromyatin and Serbiagas’ general director Dushan Bayatovich told in a general statement. South Stream Serbia has been formed by Gazprom and Srbijagas for these needs.

France is ignoring calls for not selling ‘Mistral’ to Russia.
The Wall Street Journal:
“France is preparing to train hundreds of Russian seamen to operate a powerful French-made warship this month, defying calls from the U.S. and other Western allies to keep the vessel out of the Kremlin’s hands, people familiar with the matter say,” Stacy Meichtry writes for The Wall Street Journal. “The situation with ‘Mistral’ shows how Europe depends on Russian energy resources. This dependence could weak the strategical unions, which help to win the cold war,” the correspondent thinks. Deep contradictions about how far the countries must go in imposing sanctions are pulling France apart.

This is a war between Russia and U.S. in the Ukraine’s east.
The New York Times.
“Surface-to-air missiles pilfered from army bases. Defectors from Ukraine’s elite special forces. Russian fighters who slipped across a porous border,” the New York Times is counting problems facing Ukraine’s military in the rebellious east. “We are an international battalion,” said Aleksandr Khodakovsky, the rebel commander, who led the government’s Alfa special forces unit in the Donetsk region until he resigned after the February revolution in Kiev. Mr. Khodakovsky said that Russian citizens were among his fighters, but that the “overwhelming majority” of his force of more than 500 came from eastern Ukraine. “Everyone understands that this is a war between Russia and America, and we must be for one side or for the other,” Mr. Khodakovsky said.