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Russian Economy Reeling after New Western Sanctions

By (Mil Arcega) A new wave of Western sanctions is hitting Russia’s economy hard. State-owned energy firms continue to bleed profits and Russia’s national currency plunged to a new low this week after the U.S. and the European Union announced new sanctions to punish Russia’s aggressive stance in eastern Ukraine. The sanctions could also prove costly for European and American companies.

While some worry the country’s weak currency will fuel higher prices, others say Russian consumers, who tend to buy few imports, are not likely to feel the impact yet.

“They affect state enterprises, state companies; they affect banks; they now affect a broad number of individuals, but less so, much less so – rank and file Russians,” said Maria Lipman, a political analyst at the Moscow Carnegie Center.

Russia’s central bank says it is prepared to act quickly if inflationary pressures grow, but experts predict the economic hemorrhage will continue. Hardest hit will be state-owned energy firms. Among them is Gazprom, which recently posted a 41 percent decline in net profits. Energy analyst Alexei Kokin blames the decline on Russia’s decision to stop natural gas sales to Ukraine.

“Basically the loss of Ukraine isn’t just a minor footnote, it’s a source of both uncertainty and potentially, basically, irreversible problems for Gazprom,” said Kokin.

Depressed oil prices have only compounded the problem – further hastening the ruble’s decline. Lipman said it’s a worrisome trend for Western companies that do business in Russia.

“Including the largest world companies such as Exxon or BP that are not at all happy; should not be happy, about sanctions being imposed and interfering with their lucrative cooperation with Russian oil industry,” said Lipman.

Besides targeting major companies and individuals with close ties to the Russian government, the new sanctions extend the ban on Russian exports and bar all future arms deals between Russia and Europe. Even if the West decides to roll back some of the sanctions, Marshall Gittler at online trading giant Global FX Strategy is warning investors to stay away.

“I think the economic fundamentals for the ruble are negative anyway. The question is the pace of decline. If Ukraine stabilizes, the ruble will probably decline at a much slower pace. Obviously if Ukraine heats up again, then pow! It’s collapse,” said Gittler.

Despite the damage to Russia’s economy, public support for Russian leader Vladimir Putin remains high. Few expect Putin to back down in the face of new sanctions. But whether Russia chooses to retaliate by suspending energy exports to Europe or banning Western planes from Russian airspace as some in Moscow have suggested — the end result is greater uncertainty, not just for Russia’s economy but for the world’s.

Via:: Voice of America

NATO stages Black Sea naval drills


READ MORE: ‘Promoting peace and stability’: NATO warships enter Black Sea

Starting Friday, naval exercises will take place in the southeast of Constanta, off the territorial waters of Romania. Standing NATO Maritime Group 2 – which includes the US, the UK, Germany, Greece, Spain, Italy, the Netherlands, and Turkey, as well as the naval forces of Bulgaria, Romania, and Canada – is taking part in the drills.

The drills include PASSEX type exercises. These will feature communication drills, joint tactical maneuvers, and data exchange on viewing surface and underwater situations. The naval forces will also be tasked with defeating attacks of simulated air and surface enemies.

Two ships of the Romanian Naval Forces, a Spanish frigate (ESPS Almirante Juan de Borbon, military classification F-102), a Canadian frigate (HMCS Toronto), and a Drazki frigate of the Bulgarian Naval Forces will be involved in the drills.

The warships of Standing NATO Maritime Group 2 will pay an unofficial “visit,” or port call, to Varna, Bulgaria, where they will be staying between September 19-22, Itar-Tass reports.

Romania earlier called on the United States and NATO to boost their presence in the Balkan country.

As a former communist state, Romania has been among the staunchest advocates of Western sanctions against Russia after the accession of Crimea.

Since the standoff between Russia and the West began over Ukraine, Romania – together with Bulgaria – has taken part in navy drills in the Black Sea and hosted military exercises with US troops.

Meanwhile, Russia’s first Varshavyanka-class submarine has entered service with the Black Sea Fleet. The vessel will head to the Black Sea port of Novorossiysk after completing final trials with the Northern Fleet.

Russia’s Defense Ministry has ordered a total of six submarines to be completed by 2016. These are primarily intended for anti-ship and anti-submarine missions in relatively shallow waters. They will be run by 52 crew, have an underwater speed of 20 knots, and a cruising range of 400 miles with the ability to patrol for 45 days.


Biggest attack on Website hit by 10 Gbps DDoS


The Wednesday attack was successfully deflected, but resulted in a temporary slowdown of the site.

“Thanks to the website’s reliable technical protection, was unavailable just for a few minutes, even though the DDoS attack has continued,” RT’s press service said in a statement.

The attack was identified as a UDP-flood type, and reached 10 gigabits per second.

Hackers have previously targeted RT with Distributed Denial of Service (DDoS) attacks, to prevent it from reporting on various controversial issues, such as the Chelsea Manning trial and WikiLeaks.

DDoS attacks bring websites down by fabricating internet traffic and overwhelming a site’s hosting service.

One of the most powerful attacks on RT was recorded on February 18, 2013, when the website was unavailable for about 6 hours.

RT was also temporarily disabled for just under five hours in June 2013. Hacker group AntiLeaks, which opposes Julian Assange’s WikiLeaks project, claimed responsibility for the attack.

The cyber assault coincided with RT’s reporting on the trial of Chelsea (formerly Bradley) Manning and massive anti-government protests in Turkey. Uninterrupted coverage continued on RT’s Twitter page.

In August 2012, the same group claimed responsibility for a massive DDoS attack which knocked out RT’s English and Spanish websites for hours worldwide.