Moscow press review for May 8, 2015
MOSCOW. May 8 (Interfax) - The following is a digest of Moscow newspapers published on May 8. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Russia and Germany will work together to resolve problems in Europe and prevent tragedies such as the Second World War, the countries' foreign ministers said on Thursday at a meeting in Volgograd. The Russian minister said he has "high hopes" for the German chancellor's upcoming visit to Moscow. Sources in the German delegation said Berlin is lobbying to restore a direct line of communication between NATO and Russia's military command (Kommersant, p. 1).
The Justice Ministry might put the Dynasty Foundation of Vimpelcom founder Dmitry Zimin, one of Russia's largest private foundations funding projects in science and education, on the register of 'foreign agents.' This could significantly complicate the foundation's charitable work with government-funded organizations (Vedomosti, p. 2).
The Russian Direct Investment Fund is creating a mechanism that could bring about $20 billion-$25 billion into the Russian economy from China over two to three years. The RDIF, Russia-China Investment Fund and China Construction Bank plan to form a fund to which they might contribute $1.5 billion to partially guarantee loans from Chinese banks. An agreement is expected to be signed on Friday (Vedomosti, p. 4; Kommersant, p. 2).
The World Bank has revised its growth forecast for Kazakhstan to 1.3% from 1.8% for 2015 and to 3.2% from 4.7% in 2016. The drop in oil prices has undermined investors' confidence in the stability of Kazakhstan's economy, while the slump in Russia has hurt trade. In order to avoid a recession, Kazakhstan needs to devalue the tenge, analysts believe. With support from the central bank, the tenge has remained firm despite the steep drop in oil prices (Vedomosti, p. 4).
OIL & GAS
Gazprom's CEO and Turkey's energy minister have agreed that the Turkish Stream gas pipeline should go into operation in December 2016, the Russian gas giant said. Gazprom has not started construction yet and there could be difficulties with the underwater section, but the first line of the pipeline could be completed by the end of 2016, analysts reckon. They estimate the pipeline will cost about 19 billion euros (Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
The former owner of the failed Globexbank, the bailout of which cost the Russian government 87 billion rubles, and current owner of Rossiysky Kredit Bank, Anatoly Motylev is in talks to buy Alexander Lebedev's National Reserve Bank. The bank, which Lebedev has been looking to sell for years, might be sold for about 4.5 billion rubles, a source said (Vedomosti, p. 10).
Compliance with the U.S. Foreign Account Tax Compliance Act could expose Russian banks to new risks of violating Russian laws. They are supposed to start sharing information in June, but advisers warn that, since the U.S. tax service requires banks to use encryption tools not certified by Russia's Federal Security Service, complying with these requirements could lead to breach of Russian rules for protection of personal data (Kommersant, p. 7).
REAL ESTATE & CONSTRUCTION
Demand for residential properties on the secondary market in Moscow has fallen dramatically despite the stronger ruble. The number of residential title transfers in the city tumbled 46.6% year-on-year in April and 30% in the first four months of 2015. The number of listings on the secondary market, meanwhile, rose by 15% in April. The new housing market, meanwhile, has seen an upturn thanks to a subsidized mortgage program (Vedomosti, p. 1).
The first phase of the Patriot military culture and recreation park of the Russian Armed Forces that the Defense Ministry is building near Moscow has cost about 12 billion rubles since the start of 2015. The park is supposed to host the international Army-2015 forum in June. Under a contract worth 3 billion rubles that was awarded last week, the military is building an area for historical re-enactments of World War II and hotels and restaurants made to look like bunkers and dugout shelters (Kommersant, p. 1).
TRANSPORTATION & LOGISTICS
Under a memorandum on cooperation on the construction of the Moscow-Kazan high-speed railway at a cost of 1.07 trillion rubles that Russia and China are to sign on May 8, Russia has agreed to Beijing's key demand - to build the line with Chinese equipment. Russia will apparently manage to increase the amount of Chinese investment and loans for the project: an additional 52 billion rubles might be provided on top of the anticipated 302 billion rubles (Kommersant, p. 1).
Russian Railways estimates it will need 140 billion rubles in government subsidies in 2016 to "maintain financial stability" if freight rates will only be raised by the planned 7.5%. In order to avoid an increase in subsidies, the company is proposing steeper rate hikes, projecting that with rate increases of 13% or 15.7% it would only need subsidies of 67.5 billion rubles or 24.1 billion rubles respectively (Vedomosti, p. 11).
AUTOMOTIVE & ENGINEERING
The Russia-China Investment Fund, United Aircraft Corporation and China's New Century International Leasing are forming a leasing company to sell the Sukhoi SuperJet 100 in China. An agreement is to be signed on May 8. The new company is expected to sell 100 of the passenger liners, which have a base catalog price of $36 million, over three years (Vedomosti, p. 10; Kommersant, p. 7).
