Foreign media digest 16 of July 2014

The expansion of sanctions will be modest, European officials said after a meeting of senior diplomats on Tuesday, Mattew Dalton writes in his article.
The Wall Street Journal:
The leaders aren’t expected to call for sanctions that would target broad sectors of the Russian economy, the journalist underlines. “The leaders are also expected to suspend economic modernization agreements that the European Commission, the European Investment Bank and the European Bank for Reconstruction and Development still operate with the Russian government,” the article says.

If new EU sanctions against Russia will be suspended on Wednesday, the next moment could emerge only in September. By this time Moscow will have disposed of Kyiv – Washington.
Gazeta Wyborcza
informs about a phone call late Tuesday evening between Ukraine’s President Petro Poroshenko and Germany’s Chancellor Angela Merkel, when Merkel promised to support Ukraine at the European Council’s meeting. The edition underlines, that on the same day a phone call between Merkel and US President Barack Obama on a situation in Ukraine took place. Polish newspaper quoted Washington’s sources as saying that there are strong disagreements between Obama and Merkel on how to solve the crisis in Ukraine.

The appetite of western leaders to engage in that kind of robust but realist diplomacy still seems weak.
Financial Times:

Russian Escalation Imminent As Merkel Plays The Peace Card For Putin.
“Germany’s Angela Merkel has the reputation of a level-headed pragmatist, who grew up under communism, and understands Putin’s KGB Weltanschauung. True, she is constrained by a coterie of German Putin Versteher, who, due to financial and ideological interests, take Russia’s side in the battle for Ukraine,” Paul Roderick Gregory, a research professor at the Hoover Institution, at Stanford, and at the German Institute for Economic Research in Berlin ponders in his column for Forbes. Putin’s talks with Germany’s Angela Merkel at the World Cup finals in Brazil are indicative of Putin’s calculation as to how far he can test Europe’s lack of resolve, the author thinks.
Putin and Merkel agreed on “direct talks between the Ukrainian government and the separatists …(to) begin as soon as possible… with the goal of a ceasefire on both sides,” Gregory underlines. Ukraine’s foreign minister was given little choice but to accept. I would like to ask the European foreign ministers whom they intend to include as “representatives of the separatist militias?” Apparently, Moscow allows only three leaders to speak on behalf of the separatist movement. They are all Russian citizens, and at least two of them occupy (or have occupied) positions in the Russian secret service. I doubt that Germany would have agreed to negotiations with the Baader-Meinhof Red Army Faction that was threatening it in the 1970s. No, they took Ukraine’s way out by ridding themselves of the threat. Why should not Ukraine be given the same opportunity and perhaps give it a helping hand as it is doing so? Gregory asks.

Some Kyiv commentators think that Russia’s FSB could stay behind the spam attack on Merkel to drive a wedge between Berlin and Kyiv.
Der Spiegel:
“For Germans it is strange to hear such things,” Bidder thinks, because Germans thought Merkel and Putin have “complicated” relations. Several months ago German’s government had another spam wave, but with quite opposite meaning – German’s hostility toward Russia. Moreover, Ukrainians have painful experiences with unjustified Nazi comparisons: Moscow insulted the new government in Kyiv for months as a “fascist junta”. “That’s why some Ukrainian commentators think that Moscow could stay behind this spam attack to drive a wedge between Berlin and Kyiv,” the article states. From the other hand, Bidder agrees that “There have been persistent rumors in Kyiv that Chancellor has an overly friendly relationship with the Kremlin chief.” But the attacks on Merkel also be taken up by Ukrainian celebrities and organisations, for example a military analyst Dmytro Tymchuk and Hromadske TV channel, who published a photomontage showing Merkel with Hitler mustache.

In the northeastern city of Fortaleza, leaders from Brazil, Russia, India, China and South Africa (the BRICS) made more declarations about how they will become a “winning team”.
“For followers of the BRIC summits, it was more of the same with this years theme being about sustainable and inclusive growth,” the article states. First and foremost, the leaders signed an agreement to officially launch the so-called New Development Bank (NDB), a World Bank for the BRICS, with the purpose of mobilizing resources for infrastructure and sustainable development projects in the four countries. Secondly, The NDB comes with authorized capital of $100 billion, with the bank’s headquarters in Asia’s new capital: Shanghai. “The presidents signed an agreement saying that they “encourage our state-owned companies to continue to explore ways of cooperation, exchange of information and best practices.”

There is no need in creating a reserve fund and BRICS development bank, but “it is unimportant for creators”.
The five governments agree on one thing: They’ve been denied their proper say in running institutions such as the World Bank and International Monetary Fund, and in global economic governance more generally. The edition thinks they are correct to think so, but their mistake is to believe that their planned new bodies will help put things right. BloombergView observer Leonid Bershidsky thinks the BRICS nations’ rebellion against Western-run pillars of the global financial system is more than just a political gesture: It is a threat and a bargaining tool. The reasons for building up alternatives to the IMF and the World Bank are in part political. “Ukraine, for example, is now the IMF’s fourth-largest debtor. Funding for the government, doing its best to leave the Russian sphere of influence, would not have been on President Vladimir Putin’s priority list,” the author writes. The IMF is promising to reform itself, giving more power to the large developing nations, but the U.S. Congress is in no rush to approve the changes, and the year-end deadline might be moved again.

The BRICS have been split up. They do not have a joint strategic vision, which could unite in their ambition to rewrite the international order of 1945.
Le Monde:
Moreover, because Chine together with Russia are the order’s keepers with their permanent membership of the U.N. Security Council. They do not wish to open this door of other southern countries. On top of that, China admits that U.S. economic order will guarantee its economic expansion. It needs no alternatives to this world and live peacefully with dollar as a currency, because it does not want to convert its currency into a real foreign exchange,” the editors points out. “The BRICS wants to oppose the US, but they do not have a joint alternative project, which could replace the world system.”