Western press on new challenges for Russian economy

By Vestnik Kavkaza

Russia appears in today’s world press on several occasions. USA Today published an article titled “Russia's Putin scraps New Year's holidays for ministers”. Russian President Vladimir Putin on Thursday scrapped New Year's holidays for government ministers because of the unfolding economic crisis. "For the government, for your agencies, we cannot afford this long holiday, at least this year — you know what I mean," he said (employees throughout the country are entitled to holiday from Jan. 1 to Jan. 12) The ruble staged a modest rally last week and was trading 2% higher at 52 rubles per dollar on Thursday, up from 80 rubles earlier this month. Stabilizing the ruble is a priority for the country's monetary authorities. The Central Bank in past weeks raised its key interest rate to 17% and said it will offer dollar and euro loans to banks so they can help major exporters that need foreign currencies to finance operations

“Russia says currency crisis over, but inflation set to soar” says The Daily Mail. Russia said its currency crisis was over on Thursday but warned that inflation is set to climb above 10 percent. Standard & Poor's credit ratings agency said this week it could downgrade Russia to junk as soon as January due to a rapid deterioration in "monetary flexibility." The rouble slumped to 80 per dollar in mid-December from an average of 30-35 in the first half of 2014. It has strengthened in the last few days to trade as strong as 52 per dollar on Thursday, in part thanks to government pressure on exporters to sell hard currency.

The Guardian published an article running “MH17: Russia claims to have airfield witness who blames Ukrainian pilot”. Russian investigators announced on Wednesday that they had new proof from a witness that a Ukrainian pilot fired a missile on the day of the Malaysia Airlines crash which killed 298 people. The witness, who was not named, worked at an airfield in the Ukrainian city of Dnipropetrovsk where he claimed to have seen a warplane take off on 17 July with air-to-air missiles and return without them. The MH17 flight from Amsterdam to Kuala Lumpur was shot down over territory in eastern Ukraine controlled by pro-Russian separatists, who have been fighting Kiev forces since April. Ukraine and the west accuse Russia of supplying the rebels with a surface-to-air missile launcher but Russia has issued several opposing theories, one of which involves a Ukrainian military jet allegedly seen next to the Boeing. The Dutch authorities have been charged with establishing exactly what brought down the plane and are reconstructing part of the aircraft as part of their inquiry. Preliminary findings indicate only that the plane broke apart due to damage that came from outside.

In the Daily Mail today Russia appears in article “Russia says France must fulfill Mistral contract or return money”. Russia's Defence Ministry said on Wednesday that France must fulfill a contract to deliver two Mistral helicopter carriers or return Moscow's money, as uncertainty over the 1.2 billion euro deal still lingers. "Regarding the Mistrals, here a contract is in place. All the terms are spelled out in the contract: terms of delivery, penalties, procedures. We can demand a refund," Deputy Defence Minister Anatoly Antonov is quoted by the Daily Mail

The Associated Press published an article called “Russia in Offer to Help Firms With Foreign Debts.” With inflation showing clear signs of picking up, Russia's central bank said on Wednesday it will look to help companies with their foreign debts — a move it hopes will ease the pressure on the national currency. Following on from other measures to stabilize the ruble, such as a big increase in its key interest rate to 17 percent, the Central Bank said it will offer dollar and euro loans to banks so they can help major exporters that need foreign currencies to finance operations. That could really help, as many Russian companies have been locked out of Western capital markets. Although a full-blown bank run has been avoided, the deputy chairman of Russia's largest lender warned on Wednesday that there remains a possibility of it.

The snowstorm in Moscow is highlighted today in the New York Times. A massive snowstorm in Moscow on Thursday caused delays to more than 150 flights and brought traffic to a standstill. None of Moscow's three airports have been closed, but all three were hit by severe delays, including more than a hundred flights being delayed from Domodedovo in the south of the city. The snowstorm began early on Thursday morning and the Russian Meteorological Office said it expects up to 4 inches of snow to fall in Moscow in a single day. “Unlike in some Western European capitals, snowstorms in Moscow hardly ever disrupt public transport or shut down air traffic,” The New York Times concludes.