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MOSCOW, September 19. /TASS/. The United States is changing its rhetoric on ending the Ukraine conflict, the twin attack in Lebanon may trigger further escalation and Armenia says it thwarted a coup plot allegedly involving Russia. These stories topped Thursday’s newspaper headlines across Russia.
The United States will continue to help Ukraine until “a lasting and fair peace is achieved,” the US Embassy in Moscow told Izvestia. According to the diplomatic mission, the US supports “Ukraine’s sovereign right to defend itself.” While the embassy didn’t explain what is meant by “a fair” peace, it may imply a peace agreement that would primarily benefit Kiev and its Western allies.
However, the US rhetoric on how to end the Ukraine conflict is gradually changing. Washington no longer expects Ukraine to win on the battlefield, and this forces it to lower expectations, Russian International Affairs Council (RIAC) Research Director Andrey Kortunov believes. Meanwhile, it would be wrong to discuss radical changes in the US position, nor should one expect any before the US is through with its election campaign, the expert said.
The failed Ukrainian counteroffensive in the summer of 2023 already was a disappointment for the West that had the US and European political leaders sway toward the idea that Russia will not be apparently defeated on the battlefield, therefore there should be dialogue and major concessions. “Politically, Western countries are currently willing to discuss this both at an expert level and in terms of some pivoting on the part of certain politicians,” Dmitry Novikov, Associate Professor and Head of the Laboratory of Political Geography and Contemporary Geopolitics at the Higher School of Economics, told Izvestia. The expert believes that the United States is ready for conflict freezing and a certain ceasefire, on condition of fixing the current line of engagement, as Russia could find that acceptable, according to one of their ideas.
Meanwhile, Washington has okayed Vladimir Zelensky’s “peace plan”: “We think it lays out a strategy and a plan that can work,” US Ambassador to the United Nations Linda Thomas-Greenfield said.
Tuesday’s pager attack in Lebanon continued on September 18 as walkie-talkies belonging to Hezbollah supporters exploded. Local media reports said the latest attack killed at least 14 people and left around 450 others wounded. Israeli officials have not yet claimed responsibility for the incident.
Hezbollah Secretary General Hassan Nasrallah will make a statement later on September 19 to touch upon “the latest developments,” the Shia movement announced. The group will likely opt to respond in a limited manner to the Israeli operation that has already left more than 20 people killed and some 3,000 others injured. Besides, a larger response may trigger escalation.
The pager explosions have already affected the operational activities of fighters and coordination among them. The major security breach might have exposed data about the location of Hezbollah supporters and the plans of its leadership. The cyberattack undermined confidence in the communications system and raised doubts about the organization’s ability to protect its resources. Temporary disruptions affected coordination between the group’s units ahead of an imminent Israeli ground offensive in southern Lebanon.
Vladimir Sazhin, senior researcher at the Russian Academy of Sciences’ Institute of Oriental Studies, described the attack as the most powerful blow ever dealt by Israel. “Now, fighters will be afraid of holding any radio device,” the expert surmised.
According to Murad Sadygzade, president of the Center for Middle East Research, the latest escalation risks triggering a conflict between Lebanon and Israel. Hezbollah’s potential response would include missile attacks, shooting on the border and attempted attacks on military facilities on Israeli soil, he argues. “We can see that as hostilities in Gaza become less intensive, the Israeli leadership needs to extend the conflict to stay in power for longer amid domestic problems and mass protests. For that purpose, they will likely open a northern front when all-out hostilities begin in southern Lebanon,” he told Izvestia.
The US Federal Reserve slashed interest rates by a half percentage point to a range between 4.75%-5% on Wednesday. The regulator explained in a statement that it had gained “greater confidence” that inflation is nearing the 2% target amid a slowdown in the labor market. The Fed upwardly revised its unemployment forecast and reduced its inflation expectations, which may suggest further monetary easing.
“The rate cut was fully expected by the market, which only wondered how sizeable the cut would be, and in general, the rate cut gave the first signal that the time of emerging markets will soon come. The US stock market was in a unique situation of a strong dollar and a strong market. Now it will pave the way for lower rates in Brazil and other countries. However, that will hardly benefit China where rates are lower than in the United States anyway,” Chief Investment Officer at Renaissance Capital Igor Danilenko told Kommersant. The market already penciled in rate cut expectations: gold prices have been rising for several months, reflecting lower government bond rates, while oil depends more on the situation around OPEC, but a weaker dollar could push crude prices somewhat higher, the expert added. Natalya Milchakova, lead analyst at Freedom Finance Global, said the size of the rate cut was justified by the situation in the economy, with only one member of the Fed’s Federal Open Market Committee (FOMC) backing a 0.25 percentage point cut.
Lead analyst at Cifra Broker Natalia Pyryeva told Izvestia that the aggressive 50 basis point cut may indicate growing concerns about the US economy and its prospects. As a result, a potential US recession could trigger a global crisis, she argues.
Senior private wealth manager Alexander Bartenev at BCS World of Investments told Izvestia that, for Russia, the Fed’s monetary accommodation would shape a trend with which it will have to compete. “The track record of the United States, which started reducing rates earlier and achieved earlier successes in fighting inflation shows to us how our regulator may act if it succeeds in its fight against rising consumer prices,” the expert said. Given manufacturing barriers inside Russia and difficulties in trade with foreign partners over the existing sanctions, the Russian Economic Development Ministry may move to establish substitution production sites domestically. And this scenario would require lower rates, as businesses will raise capital to expand capacity and boost their workforce, he concluded.
Armenia’s authorities announced on Wednesday they had prevented a coup attempt. The country’s Investigative Committee said several Armenian nationals and former residents of the unrecognized republic of Nagorno-Karabakh were behind the plot to usurp power by using force. The coup attempt was foiled by Armenia’s National Security Service, the investigators said.
Armenia’s national security issues were raised at the Second Global Armenian Summit running in Yerevan on September 17-20, too. The summit discussed Armenia’s cooperation with its allies in the Collective Security Treaty Organization (CSTO), including Russia. On September 18, Armenian Prime Minister Nikol Pashinyan said as he told the summit that his republic had moved to a point of no return in its relations with the post-Soviet security bloc. He claimed that the organization leaves Armenian questions unanswered and that it threatens Armenia’s “national security, its future existence and sovereignty.”
Kremlin Spokesman Dmitry Peskov responded to Pashinyan by saying that “the CSTO cannot and does not pose any threat to Armenia’s sovereignty.” “Rather, the opposite is true: this organization serves to safeguard the sovereignty of its member countries,” the Russian presidential spokesman emphasized.
Allegations that the CSTO poses a threat to Armenia’s national security seem to align with reports about a coup attempt, experts interviewed by Vedomosti agree. However, political scientist Stanislav Pritchin questions the statements by Armenian security officials. He can see a new bout of pressure from the country’s authorities on organizations and politicians with Russian ties. This, the expert argues, signals another stage of Yerevan’s disengagement with Moscow after the freezing of its CSTO membership. According to Pritchin, a similar pattern may play into the hands of Pashinyan and his team in domestic politics as well, since there are politicians in the country who seek cooperation with Russia.
Yerevan has not been making any active actions as part of the CSTO anyway, Head of Sector Section for the Caucasus Staff Member Center for post-Soviet Studies Vadim Mukhanov told Vedomosti. Moreover, he maintained, Russian-oriented policies have ceased to be a priority in the policy course being pursued by the current Armenian leadership. Instead, Mukhanov concluded, Yerevan is looking to develop relations with the EU and the West, rather than with Russia’s allies.
In the first eight months of 2024, Russian pipeline gas exports to Europe grew by 3 bln cubic meters, seeing a 11% rise from January-August of 2023, according to the Gas Exporting Countries Forum’s latest monthly gas market report.
Russian gas imports increased as European purchases of liquified natural gas (LNG) from the United States and LNG consumption in Europe fell. Besides, there are increasingly more reasons for Europe to question the reliability of the US as a gas supplier.
Valdis Plyavinsh, senior analyst at Yakov and Partners think-tank, explains that, in 2023, the consumption of natural gas to generate electricity exceeded 920 bln cubic meters in the United States and may rise by another 130-140 bln cubic meters. Such a significant increase in domestic demand could impact the US LNG industry.
Meanwhile in Russia, gas consumption will grow mostly as domestic gas supply projects, the production of natural gas motor fuel and chemical utilization of natural gas develop, Deputy General Director of the National Energy Security Fund Alexey Grivach said.
According to Plyavinsh, a rapid growth in energy demand from the IT sector in Russia is less likely as this market is smaller compared to that in the United States. The two markets differ in terms of structure, too.
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