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Russian Economy Reeling after New Western Sanctions

By webdesk@voanews.com (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

By RT

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.

Via:: RT.com

Biggest attack on RT.com: Website hit by 10 Gbps DDoS

By RT

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

“Thanks to the website’s reliable technical protection, RT.com 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.

Via:: RT.com

Russian Lawmakers Propose Cutting Foreign Ownership in Media

By webdesk@voanews.com (Reuters) Russian lawmakers proposed cutting foreign ownership in Russian media assets to 20 percent in an attempt to limit outside influences and protect Russia’s “information sovereignty”, a copy of a draft law showed on Wednesday.

The law will consolidate Russian President Vladimir Putin’s control over media, which have largely rallied behind the Kremlin’s policies in Ukraine, running scathing coverage of the Kyiv government since the fall of Moscow-backed ex-president.

Putin’s government speaks openly of an “information war” in which Moscow is being attacked by Western reports of Russian weapons or soldiers reinforcing the rebels in eastern Ukraine, where Kyiv accuses the Kremlin of fanning separatist violence.

“The proposed law will determine the structure of media ownership,” said Sergei Zhelezniak, a senior lawmaker of the ruling United Russia party loyal to Putin.

“[It] is directed first of all at guaranteeing Russia’s information sovereignty and decreasing the influence from abroad on events in the country which is an information war launched against our country.”

The bill was introduced by deputies from Russia’s Communist Party as well as Just Russia and the nationalist LDPR. They were not available for comment.

If passed, the bill would go into force on Jan. 1, 2016 but stakeholders will have until Feb. 1, 2017 to bring ownership into line with regulations.

The bill would still need to be passed in three readings in the lower house of parliament, or Duma, before being passed by the parliament’s upper house and signed into law by Putin.

Russia’s media sector has attracted the likes of German-listed Axel Springer and U.S. firm Hearst Media, both of whom have bought into the magazine market.

Foreign firms have much less exposure in Russia’s television sector, where Russians receive the majority of their news.

Anastasia Obukhova, media analyst at VTB Capital Research, said foreign ownership is overall small in Russia’s media sector, adding there were few foreign companies that have a stake higher than 20 percent.

“Few of them are public, and if they are owned by a Russian businessman it would be hard to say if their assets are owned in Russia or offshore, it’s a very difficult topic to clarify,” she said.

Journalists have said Putin is tightening his grip over print and Internet media where the last traces of dissent still remain and point to the sacking of an editor at one of Russia’s most popular online news organisations earlier this year.

Independent online news outlet Dozhd, that made its name covering street protests against Putin in 2011-2012, was also taken off the air in a move its general director called censorship over its sometimes critical views of the Kremlin.

Via:: Voice of America