What drives America: Russophobia or hard pragmatism?

What drives America: Russophobia or hard pragmatism?

“One should always hope for better, but prepare for worse,” the comment of usually more optimistic Dmitry Peskov, the Russian President's press secretary, made on Thursday with regard to another U.S. bill on anti-Russian sanctions, did not leave hopes for “a miracle." The market's response was immediate - the ruble bounced in relation to both the euro and the dollar.

The Kremlin sees the reason for imposing new sanctions on Russia in the next wave of Russophobia sweeping Washington. However, the United States explained these very reasons were clearly yesterday: first, Russian meddling in the U.S. election, second, Russia's destructive role in Syria, third, Russia's act of aggression against Ukraine’s naval ships in the Kerch strait in November 2018. It is curious that in recent days, representatives of Washington have announced new anti-Russian sanctions in various parts of the world, in front of various audiences and even during informal meetings - for example, Secretary of State Mike Pompeo talked about this Georgian Foreign Minister David Zalkaliani in Warsaw on the sidelines of a major Middle East conference and U.S. ambassador to Colombia Kevin Whitaker - a South American audience, apparently.

But Moscow believes that the root cause is different. "We see the manifestation of this disease, it is such a rabid Russophobia, absolutely emotional. It is not based on expert data, otherwise such bills would not mention any destabilizing role of Russia in Syria, but on the contrary, would recognize Russia's crucial and key role in rescuing the region from terrorism. In other words, the authors of the draft law, coming up with such initiatives, do not understand what they are talking about, being enchained by these Russophobic emotions,” Dmitry Peskov told the reporters.

At the same time, he believes that the United States has an “an absolutely concrete, pragmatic and aggressive trading approach,” even though it “sometimes borders on racketeering”. According to Peskov,  this time Washington has targeted various energy projects of Russian companies and Russian banks. The goal is to weaken them, oust them from the market and clear a place for American business. But "the Russian economy has already adapted to the sanctions regime ... has learned to maintain stability in the conditions of these sanctions, ensuring growth in a number of areas." Peskov also said that the government has already taken measures to avoid any shocks.

The bill, submitted by a group of U.S. senators from the Republican and Democratic parties, provides for the introduction of investment restrictions on projects with Russia, sanctions against Russia's energy companies, banks, liquid natural gas projects, and the final flourish - against individual associated with Russian President Vladimir Putin. When transforming a bill into law, the latter can be used against any citizen of the Russian Federation. And it is not an exaggeration - the Russians may lose all rights in the territory of any U.S. ally, not to mention the United States itself.

The Financial Times specifies in the article that new Western sanctions against Russia could be levied over the next two months. Republican Senator Lindsay Graham and Democrat Bob Menendez, who submitted the bill, said they backed it last year. But their failure was convenient - now the bill has become even more tough. For the new anti-Russian sanctions to take effect, the bill must be passed by the Congress and signed by President Donald Trump.

Market analyst Eduard Avakov noted in an exclusive commentary for Vestnik Kavkaza: “The situation is serious. The unity of both Democrats and Republicans in desire to impose new sanctions speaks about the likelihood of a bill being passed. If we talk about how it can affect our financial instruments, first of all, I would note the fact that foreign investors will take a wait-and-see approach until it's clear and partially reduce their investments in Russia's shares and federal loan bonds. This may result in a decline in the value of government-sponsored enterprises' shares. First of all, it will hit such companies as Sberbank, Gazprom, Rosneft. The sanctions may lead to an increase in federal loan bond yields. The analyst also noted that the situation will have an adverse effect on the Russian ruble exchange rate: “If we call specific levels, I think about a decline of 67.5-68.5 rubles per dollar. I also want to draw attention to the fact that since last April the number of non-residents owning Russian federal loan bonds have noticeably decreased, and Russia's investment rating has been raised, so I am not inclined to consider apocalyptic scenarios in the dynamics of the ruble exchange rate."