Putin tells Trump that Moscow is open for dialogue

FILE PHOTO - Russia's President Vladimir Putin attends a meeting with officials and representatives of Russian business community at the Kremlin in Moscow, Russia December 26, 2018. Alexander Nemenov/Pool via REUTERS

By Vladimir Soldatkin

MOSCOW (Reuters) – Russian President Vladimir Putin told his U.S. counterpart Donald Trump in a New Year letter on Sunday that Moscow was ready for dialogue on a “wide-ranging agenda”, the Kremlin said following a series of failed attempts to hold a new summit.

At the end of November, Trump abruptly canceled a planned meeting with Putin on the sidelines of a G20 summit in Argentina, citing tensions about Russian forces opening fire on Ukrainian navy boats and then seizing them.

Trump and Putin also failed to hold a full-fledged meeting in Paris on the sidelines of the centenary commemoration of the Armistice. The two leaders held their one and only summit in Helsinki in July.

“Vladimir Putin stressed that the (Russia – United States) relations are the most important factor for providing strategic stability and international security,” a Kremlin statement said.

“He confirmed that Russia is open for dialogue with the USA on the most wide-ranging agenda.”

Moscow has said one of the key issues it wanted to discuss with the United States is Washington’s plans to withdraw from a Cold War era nuclear arms pact.

Russian Foreign Minister Sergei Lavrov was quoted as saying that now it was up to the United States whether to hold a new meeting in 2019.

“The issue should be addressed to Washington. Both our president and his representatives have said that we are ready for the talks when Washington is ready for it,” TASS news agency quoted Lavrov as saying in televised remarks.

In a separate letter to Syrian President Bashar al-Assad, Putin pledged a continuation of aid to the Syrian government and people in the “fight against terrorism, in defense of state sovereignty and territorial integrity”.

Putin also sent New Year greetings to other world leaders including prime ministers Theresa May of Britain and Shinzo Abe of Japan, as well as Chinese President Xi Jinping.

Putin wished “well-being and prosperity to the British people”, the Kremlin said.

Russia’s embassy in London said on Friday Moscow and London had agreed to return some staff to their respective embassies after they expelled dozens of diplomats early this year.

Britain expelled 23 Russian diplomats over accusations the Kremlin was behind a nerve toxin attack in March on former double agent Sergei Skripal and his daughter in the English city of Salisbury.

Russia, which denies any involvement in the poisoning, sent home the same number of British embassy workers in retaliation.

(Reporting by Vladimir Soldatkin, Editing by William Maclean and David Stamp)

Russian nostalgia for Soviet Union reaches 13-year high

FILE PHOTO: Demonstrators carry flags and a portrait of Soviet state founder Vladimir Lenin during a rally held by Russian Communist party to mark the Red October revolution's centenary in central Moscow, Russia November 7, 2017. REUTERS/Sergei Karpukhin/File Photo

By Tom Balmforth

MOSCOW (Reuters) – The number of Russians who regret the break-up of the Soviet Union has risen to its highest since 2005, amid rising economic concerns and nostalgia for the Soviet welfare system, the Levada pollster said on Wednesday.

President Vladimir Putin famously dubbed the 1991 dissolution of the Soviet Union the greatest catastrophe of the 20th century and he and many Russians have long lamented the blow its demise dealt to Moscow’s great power status.

The number of Russians pining for the Soviet past has been steadily rising under Putin since he returned to the presidency in 2012, poll data issued by the independent Levada Center on Wednesday showed.

In the survey, 66 percent of Russians said they regretted the Soviet break-up, a level not seen since 2005 when Levada recorded 65 percent and Putin was on his second term in the Kremlin.

The number of nostalgic Russians fell gradually from 2004, reaching a low of 49 percent in 2012, before rising to its current level, the pollster found, on a par with the 1990s after the Soviet collapse.

Karina Pipiya, a sociologist at Levada, said that in the past such feelings were often triggered by a loss of international prestige and questions of national identity.

“Now the nostalgia is more determined by economic factors and regret that there used to be more social justice and that the government worked for the people and that it was better in terms of care for citizens and paternalistic expectations,” she said.

Ordinary Russians have faced stagnating incomes, a weaker rouble and inflation since 2014, when the Russian economy entered recession amid falling oil prices and Western sanctions.

To help balance state coffers, the Kremlin this year raised the retirement age for both men and women in a highly unpopular measure that dented Putin’s popularity rating.

Kremlin spokesman Dmitry Peskov brushed off the findings of the nostalgia poll.

“Other sociologists will say that people are always inclined to retrospectively idealize what happened to them in their youth and that everything that happened in youth was tastier, more reliable and greater,” said Peskov.

(Reporting by Tom Balmforth; Editing by Andrew Osborn and Andrew Roche)

Putin says Russia will retaliate if U.S. quits nuclear missile treaty: agencies

Russia's President Vladimir Putin chairs a meeting with top officials of the Russian Defence Ministry in Sochi, Russia November 19, 2018. Picture taken November 19, 2018. Sputnik/Alexei Nikolsky/Kremlin via REUTERS

MOSCOW (Reuters) – Russian President Vladimir Putin said on Monday the Kremlin would retaliate if the United States withdrew from the 1987 Intermediate-Range Nuclear Forces treaty, Russian news agencies reported.

Putin discussed possible Russian retaliation with top Russian Defence Ministry officials and added that the Kremlin was ready to discuss the INF treaty with Washington.

The Cold War-era treaty, which rid Europe of land-based nuclear missiles, has come into question against a backdrop of renewed tensions between the West and Russia, most notably over Moscow’s 2014 annexation of Crimea and role in eastern Ukraine.

U.S. President Donald Trump’s administration has accused Russia of non-compliance with the 31-year-old missile accord and warned it will pull out of the deal as a result. The Kremlin denies violating the pact.

NATO and Russian envoy addressed the dispute during rare talks on Oct. 31, with NATO Secretary-General Jens Stoltenberg urging Moscow to make quick changes to comply in full with the treaty. He said Russia’s development of the land-based, intermediate-range SSC-8 cruise missile posed “a serious risk to strategic stability”.

European leaders worry any collapse of the INF treaty could lead to a new, destabilizing arms race.

(Reporting by Maxim Rodionov; Editing by Mark Heinrich)

Russia pledges to act to ‘restore’ military balance if U.S. quits nuclear arms pact

National flags of Russia and the U.S. fly at Vnukovo International Airport in Moscow, Russia April 11, 2017. REUTERS/Maxim Shemetov

By Andrew Osborn and Tom Balmforth

MOSCOW (Reuters) – Russia said on Monday it would be forced to respond in kind to restore the military balance with the United States if President Donald Trump carried through on a threat to quit a landmark nuclear arms treaty and began developing new missiles.

Trump drew a warning of “military-technical” retaliation from Moscow after saying on Saturday that Washington would withdraw from the Cold War-era Intermediate-Range Nuclear Forces Treaty, which rid Europe of land-based nuclear missiles.

The INF treaty, signed by then-President Ronald Reagan and reformist Soviet leader Mikhail Gorbachev in 1987 at a time of unprecedented East-West detente, required the elimination of all short-range and intermediate-range land-based nuclear and conventional missiles held by both countries in Europe.

Its demise raises the possibility of a renewed arms race, and Gorbachev, now a frail 87-year-old, has warned that unraveling it could have catastrophic consequences.

Kremlin spokesman Dmitry Peskov on Monday called Trump’s withdrawal plan a matter of deep concern for Moscow.

“Such measures can make the world more dangerous,” he said during a daily conference call with reporters.

Despite repeated Russian denials, U.S. authorities believe Moscow is developing and has deployed a ground-launched system in breach of the INF treaty that could allow it to launch a nuclear strike on Europe at short notice.

Trump said the United States would develop equivalent weapons unless Russia and China agreed to a halt in development. China is not a party to the treaty.

Peskov said President Vladimir Putin had repeatedly warned that the demise of the treaty would force Moscow to take specific military steps to protect its own security.

“Scrapping the provisions of the INF treaty forces Russia to take measures for its own security because what does scrapping the INF treaty mean?,” said Peskov.

“It means that the United States is not disguising, but is openly starting to develop these systems in the future, and if these systems are being developed, then actions are necessary from other countries, in this case Russia, to restore balance in this sphere.”

EUROPEAN ALARM

Trump’s national security adviser John Bolton is due to hold talks with senior officials in Moscow later on Monday and to meet Putin on Tuesday.

Peskov said Trump’s decision to quit the pact would be a subject for discussion and that Moscow was looking for a detailed explanation as to why Washington had decided to turn its back on the treaty.

The INF treaty required the United States and the Soviet Union to forego all nuclear ground-launched ballistic and cruise missiles with a range of 500 to 5,500 km, eliminating an entire category of weapon.

The Soviet Union scrapped hundreds of SS-20 ballistic missiles armed with nuclear warheads which had a range of 5,500 km as a result. Many of them had been pointed at Europe.

NATO’s decision to station Cruise and Pershing nuclear missiles in Europe provoked waves of protests in the 1980s from anti-nuclear campaigners who felt their deployment would turn Europe into a potential nuclear battlefield.

Hundreds of thousands of protesters gathered in Bonn, West Germany, and campaigners formed a protest camp at Greenham Common, in Britain, the site of Cruise missiles.

EUROPEAN ALARM

Trump’s statement has alarmed some European countries.

French President Emmanuel Macron spoke to Trump on Sunday to stress the importance of the treaty, his office said on Monday. The German government said it regretted Trump’s decision, saying NATO would now have to discuss the development.

China also condemned Trump’s move on Monday, saying it was wrong to unilaterally pull out of the treaty.

In Moscow, Peskov said there was a six-month period for Washington to withdraw from the INF treaty once it had given official notification it was leaving, something he noted it had not yet done.

That meant the question of Russia acting to restore the military balance between Washington and Moscow was not “for today or tomorrow,” he said.

Peskov denied U.S. accusations Russia had breached the treaty, alleging that the United States was the one at fault and had been steadily undermining it.

“Putin has said many times said the United States de facto is taking measures that are eroding the conditions of this treaty,” said Peskov, referring to strike drones and anti-missile systems capable of destroying short- and intermediate-range rockets.

(Additional reporting by Vladimir Soldatkin in Moscow, Joseph Nasr in Berlin, Sudip Kar-Gupta, and by Michael Martina in Beijing; Writing by Andrew Osborn; Editing by Richard Balmforth)

Syrian and Russian warplanes pound Idlib before talks: monitor

Jan Egeland (L), Special Advisor to the United Nations Special Envoy for Syria, and Staffan de Mistura, U.N. Syria Envoy, attend a news conference at the U.N. in Geneva, Switzerland September 4, 2018. REUTERS/Denis Balibouse

By Angus McDowall and Tulay Karadeniz

BEIRUT/ANKARA (Reuters) – Russian and Syrian jets hammered a major rebel stronghold on Tuesday, a war monitor said, days before leaders of Russia, Iran and Turkey meet to discuss an expected Syrian government offensive that could spark a humanitarian disaster.

The warplanes bombarded countryside around Jisr al-Shughour on the western edge of the rebel enclave of Idlib after weeks of lull, killing 13 civilians but no fighters, according to the Syrian Observatory for Human Rights and a rebel source.

For President Bashar al-Assad, the defeat of rebels in the northwestern province would mean breaking the last major stronghold of active military opposition to his rule, though other large areas also remain beyond his control.

Since Russia’s entry into the war on his side in 2015, Assad and his other close allies, Iran and a group of regional Shi’ite militias it backs, have forced the rebels from a succession of bastions including Aleppo, Eastern Ghouta and Deraa.

A Syrian government minister said the siege of Idlib would probably be resolved by force. “Until now, military action is more likely than reconciliations,” Reconciliation Minister Ali Haidar told Russia’s Arabic-language Sputnik news agency.

Damascus uses the term “reconciliation” for the negotiated rebel surrenders that have taken place in some areas.

“Idlib is different from other regions because of the large numbers of fighters,” Haidar said. “However we cannot say there is no gateway to reconciliation.”

Half of Idlib’s 3 million people have already fled there from their homes in other parts of Syria, according to the United Nations, and any offensive there threatens new displacement and human misery.

It could also spark a wider confrontation with Turkey, a supporter of the rebels, whose army has set up observation posts along the Idlib front lines to deter fighting.

Turkey’s Hurriyet daily reported that Turkish armed forces were reinforcing the Idlib border with M60 tanks, and Reuters television filmed a convoy heading towards the border.

Tuesday’s air strikes came hours after U.S. President Donald Trump warned Assad and his allies not to “recklessly attack” Idlib, saying that hundreds of thousands might die.

“HUMAN SHIELDS”

The Kremlin on Tuesday dismissed his comments, describing Idlib, where jihadist insurgent factions dominate, as a “nest of terrorism”. Spokesman Dmitry Peskov added: “We know that Syria’s armed forces are preparing to resolve this problem.”

Iran echoed that theme. “Terrorist groups [in Idlib] have mixed with the people,” said Abbas Araqchi, deputy foreign minister, according to the Islamic Republic News Agency.

“They are using people as human shields.”

Idlib’s dominant rebel faction is Tahrir al-Sham, a jihadist alliance spearheaded by al Qaeda’s former official affiliate in Syria, the Nusra Front, though other insurgent groups are also present.

Last week the U.N. envoy to Syria, Staffan de Mistura, said the Nusra Front and al Qaeda, both of which the international body designates as terrorists, had an estimated 10,000 fighters in Idlib.

A top U.S. general estimated there were 20,000-30,000 militants in Idlib, but said if there were major military operations “we can expect humanitarian catastrophe”, and urged operations that mitigated the risks to civilians.

On Tuesday de Mistura said ongoing talks between Russia and Turkey held the key to resolving the fate of Idlib without a bloodbath. He said he had heard reports that Damascus had set a Sept. 10 deadline for diplomacy to work before attacking.

Turkey fears a major assault on Idlib could send a new wave of refugees towards its border, and wants to maintain a “de-escalation agreement” that it struck with Russia and Iran last year.

It has staged two major incursions into Syria, creating a buffer zone along its border in an area north of Aleppo that adjoins Idlib, where it has set up a local administration alongside Syrian rebel groups.

Foreign Minister Mevlut Cavusoglu said Turkey was discussing joint action with Russia to target terrorist groups in Idlib while avoiding a full-scale offensive. Ankara last week added Tahrir al-Sham to its list of designated terrorist groups.

GRAPHIC: Syrian army prepares assault on Idlib – https://tmsnrt.rs/2NHAqh3

PRETEXT FOR ATTACK?

“We went to Moscow with our defense minister and intelligence chief. Now talks are ongoing between our soldiers, intelligence agencies and foreign ministries about what kind of steps could be taken,” he said in Ankara late on Monday.

Ankara has said the presence of radical groups in Idlib is being used a pretext for a military operation. When he was in Russia in late August, Cavusoglu said “we have to differentiate terrorists from other people”, but added that it was also important to eliminate Russia’s concerns.

Iran’s Foreign Minister Mohammad Javad Zarif, on a visit to Syria, told Iranian state television: “Our efforts are for … the exit of terrorists from Idlib to be carried out with the least human cost.”

He and Peskov said Idlib would be a major subject of discussion at the Sept. 7 summit meeting between Russia’s Vladimir Putin, Turkey’s Tayyip Erdogan and Iran’s Hassan Rouhani.

Tuesday’s strikes come after three weeks without Russian air raids in Idlib, though the Syrian military has kept up shelling and some aerial bombardment.

Last week a source close to Damascus said the government was preparing a phased assault that would initially target the areas in the south and west of the rebel enclave. That would bring Assad close to reclaiming the major strategic prize in the region, two arterial highways running to Aleppo.

Even a staggered offensive like that would involve fighting around Turkish observation posts, potentially triggering a new escalation in an already complex war.

State news agency SANA said Syrian air defenses brought down Israeli rockets on Tuesday.

“Air defenses downed a number of rockets fired by the Israeli enemy in the Wadi al-Uyoun area in the Hama countryside,” it said.

(Reporting by Angus McDowall and Lisa Barrington in Beirut, Tulay Karadeniz in Ankara, Babak Dehghanpisheh and Tom Miles in Geneva, Tom Balmforth in Moscow, Phil Stewart in Athens and Suleiman al-Khalidi in Amman; writing by Angus McDowall; editing by Andrew Roche)

Trump sits down with Putin after denouncing past U.S. policy on Russia

U.S. President Donald Trump and Russia's President Vladimir Putin shake hands as they meet in Helsinki, Finland July 16, 2018. REUTERS/Kevin Lamarque

By Jeff Mason and Andrew Osborn

HELSINKI (Reuters) – U.S. President Donald Trump sat down with Vladimir Putin for a long-awaited summit on Monday saying he wanted good relations with Russia, after blaming Washington’s own past “foolishness and stupidity” for the countries’ hostile ties.

Trump opened the meeting with warm words for Putin, seated next to the Russian leader in an ornate presidential palace in neutral Finland, and said it was a longstanding goal of his to improve the relationship between the two countries.

“I think we will have an extraordinary relationship. I hope so. I’ve been saying it, and I’m sure you’ve heard over the years, and as I campaigned, that getting along with Russia is good thing, not a bad thing,” he said.

U.S. President Donald Trump and Russia's President Vladimir Putin shake hands as they meet in Helsinki, Finland July 16, 2018. REUTERS/Kevin Lamarque

U.S. President Donald Trump and Russia’s President Vladimir Putin shake hands as they meet in Helsinki, Finland July 16, 2018. REUTERS/Kevin Lamarque

But to Trump’s critics, the friendly words had already been overshadowed by an extraordinary denunciation of his own country’s prior policies, which Trump tweeted out hours before the summit.

“Our relationship with Russia has NEVER been worse thanks to many years of U.S. foolishness and stupidity and now, the Rigged Witch Hunt!” he tweeted before the summit began.

The Russian foreign ministry “liked” his tweet, and tweeted back: “We agree”.

Trump’s opponents at home were furious, with one Democratic congressman tweeting that Trump had turned the White House into “a propaganda arm for the Kremlin”.

Putin and Trump met alone apart from interpreters before a working lunch with aides. Trump said they would talk about a range of subjects, listing trade, the military, nuclear weapons and China.

But, at least in his public remarks at the outset, he mentioned none of the issues that have lately brought U.S.-Russian relations to the lowest point since the Cold War: Moscow’s annexation of territory from Ukraine, its support for Syria’s Bashar al-Assad, as well as Western accusations that it poisoned a spy in England and meddled in elections.

“Our relationship with Russia is strained because of the very malign actions he’s refusing to take Russia to task for,” tweeted Democratic U.S. Representative Gregory Meeks, a member of the House Foreign Affairs Committee. “Though relations were worse during the Cold War, at least then the US Presidency wasn’t a propaganda arm for the Kremlin.”

The Kremlin has played down expectations for the summit. It said it did not expect much from the meeting but hoped it would be a “first step” to resolving a crisis in ties.

“Presidents Trump and Putin respect each other and they get along well,” Kremlin spokesman Dmitry Peskov said. “There is no clear agenda. It will be determined by the heads of state themselves as they go along.”

While Trump has been abroad since last week, the special prosecutor investigating allegations that Russia interfered to help him win the 2016 presidential election indicted 12 Russians on Friday for stealing Democratic Party documents.

U.S. President Donald Trump, first lady Melania Trump, Finland's President Sauli Niinisto his wife Jenni Haukio pose for a photo in Helsinki, Finland, July 16, 2018. REUTERS/Kevin Lamarque

U.S. President Donald Trump, first lady Melania Trump, Finland’s President Sauli Niinisto his wife Jenni Haukio pose for a photo in Helsinki, Finland, July 16, 2018. REUTERS/Kevin Lamarque

“WHICH TEAM DO YOU PLAY FOR?”

Trump’s foes at home have been scathing about his apparent refusal to criticize Putin. His 2016 opponent Hillary Clinton tweeted: “Great World Cup. Question for President Trump as he meets Putin: Do you know which team you play for?”

Russia denies interfering in the U.S. presidential election. The state RIA news agency quoted a Russian source as saying Moscow was “ready to discuss, ready to undertake mutual obligations of non-intervention into internal matters”.

Trump has said he will raise the election meddling but does not expect to get anywhere. He has repeatedly noted that Putin denies it, while also saying that it is alleged to have taken place before he became president.

For Putin, that the summit is even happening despite Russia’s semi-pariah status among some Americans and U.S. allies is a geopolitical win.

The summit caps a trip abroad during which Trump sternly criticized NATO allies for failing to spend enough on their militaries and embarrassed British Prime Minister Theresa May by saying she refused to take his advice about how to negotiate Britain’s exit from the EU. He referred to the European Union itself as a “foe” in trade, and repeatedly criticized it.

In some of the strongest words yet reflecting the unease of Washington’s traditional allies, Germany’s foreign minister said on Monday Europe could not rely on Trump.

“We can no longer completely rely on the White House,” Heiko Maas told the Funke newspaper group. “To maintain our partnership with the USA we must readjust it. The first clear consequence can only be that we need to align ourselves even more closely in Europe.”

(Additonal reporting by Steve Holland in Helsinki and by Christian Lowe and Polina Devitt in Moscow; Writing by Andrew Osborn and Peter Graff; Editing by Angus MacSwan)

Russia steps up legal attack against hunter of Stalin’s mass graves

FILE PHOTO: Historian Yuri Dmitriev (C) walks after a hearing inside a court building in Petrozavodsk, Russia April 5, 2018. REUTERS/Vladimir Larionov/File Photo

By Andrew Osborn

MOSCOW (Reuters) – A Russian historian whose exposure of Soviet leader Josef Stalin’s crimes angered officials was accused on Thursday by state investigators of sexually assaulting his adopted daughter, after having been cleared of similar charges in April.

The new accusation was made as Russia hosts the soccer World Cup, an event opposition politicians have accused the authorities of using to try to bury bad news at a time when Human Rights Watch says the country is experiencing its “worst human rights crisis” since the Soviet era.

Some of Russia’s leading cultural figures have said that Yuri Dmitriev is being persecuted because his focus on Stalin’s crimes jars with the Kremlin narrative that Russia must not be ashamed of its past.

His real crime, they say, has been dedicating himself to documenting Stalin’s 1937-38 Great Terror, in which nearly 700,000 people were executed, according to conservative official estimates. Dmitriev, 62, found a mass grave with up to 9,000 bodies dating from the period.

A European Union spokeswoman on Wednesday said the bloc regarded the case against Dmitriev, which it said had already obliged him to spend 13 months in custody, as “dubious” and expected Russia to drop it.

On Thursday, investigators set out new charges against him. Interfax cited Dmitriev’s lawyer, Viktor Anufriev, as saying a court in the northwestern city of Petrozavodsk ordered Dmitriev to be detained for two months.

‘INVENTED’

A court in northwest Russia cleared Dmitriev of child pornography charges involving his adopted daughter in April after a long campaign by human rights activists to free him.

However, a higher court in the Karelia region overturned his acquittal on June 14 on the basis of an appeal by state prosecutors and Dmitriev was detained by police again on Wednesday evening.

On Thursday, state investigators said they had opened a new criminal case against him, this time alleging sexual assault, a crime that carries a prison sentence of up to 20 years.

Investigators said in a statement they would ask a court to remand him in custody later on Thursday while they investigated his alleged crimes which they said happened between 2012 and 2016.

Anufriev told Reuters earlier on Thursday that his client denied the new accusations, which he called “invented,” and suggested that investigators had opened the new case to try to show they had not been wrong the first time round.

The Investigative Committee of Karelia, whose investigators submitted the original case for prosecution, have previously not responded to Reuters’ questions about whether there was a political side to the case, saying only that they are guided by evidence that they collect.

Dmitry Gudkov, an opposition politician who hopes to run in Moscow’s mayoral race later this year, said he thought Dmitriev was being persecuted for his work as a historian.

“Who is so bothered about a person who has committed only one ‘offense’ — to investigate the crimes of the Stalin era?” Gudkov asked on Thursday on social media.

“Russia, the legal successor of the USSR.”

(Editing by Gabrielle Tétrault-Farber, William Maclean)

‘Russia in the doldrums?’: new U.S. sanctions to weigh on recovery

By Jack Stubbs and Polina Nikolskaya

MOSCOW (Reuters) – An escalation in U.S. sanctions against Moscow risks derailing a fragile recovery in Russia’s economy, which had just begun to take hold after the Kremlin’s last confrontation with the West in 2014, analysts and investors said on Monday.

The United States imposed major new sanctions against Russia on Friday, striking at senior Russian officials and some of the country’s biggest companies in one of Washington’s most aggressive moves to punish Moscow for its alleged meddling in the 2016 U.S. election and other “malign activity”.

“One gets the impression that since 2014 we have been convinced that sanctions are painless for our economy,” said Kirill Tremasov, head of research at Loko-Invest and former director of the Russian Economy Ministry’s forecasting department.

“This is completely groundless. What happened on Friday opens a new stage in relations with Western countries. We have found ourselves in a new reality. And it is very, very serious.”

Analysts and investors in Moscow said the sanctions could consign Russia to years of low growth, frustrating government efforts to stimulate a rebound from a two-year downturn brought on by low oil prices and Western sanctions over Moscow’s role in the Ukraine crisis.

Putin was re-elected for his fourth presidential term in March with a huge majority, but is under increasing pressure to meet voters’ expectations of better growth and assuage concerns about falling living standards.

SLOW-GROWTH ENVIRONMENT

After two years of contraction, Russian GDP returned to growth of 1.5 percent last year on the back of higher oil prices, still short of a government target of 2 percent.

Chris Weafer, a senior partner at economic and political consultancy Macro Advisory, said he still saw Russia’s economy growing by 1.8 percent this year, with oil prices above $60 a barrel.

“But the big question, of course, is ‘How long does Russia stay in this low-growth environment?’ That’s where the impact of sanctions happens,” he said.

“We all know that the economy needs to grow at a faster pace over the course of the next (presidential) term, it needs to get stronger – and sanctions and the impact on foreign direct investment, that’s where it comes in,” he said. “2018 is the year of Russia in the doldrums.”

The latest round of U.S. sanctions represents the biggest escalation in Western action against Russia since Washington and the European Union first targeted oligarchs close to Putin and their businesses over the Ukraine crisis in 2014.

Investors said the inclusion of people who are not traditionally seen as part of Putin’s inner circle showed that any Russian company or business leader could now be targeted.

Russia’s rouble suffered its biggest daily fall in over three years on Monday and stocks in major Russian companies also slid, as investors reacted to the new sanctions. State-owned Sberbank, often seen as a barometer of the wider economy, fell 17 percent in Moscow and aluminum giant Rusal <0486.HK> lost over half its value in Hong Kong after its main owner Oleg Deripaska was named on the sanctions list.

TIGHTER MONEY

The increased uncertainty and risk will make it harder for Russian companies to borrow abroad and reduce the amount of inward investment, said Tim Ash at BlueBay Asset Management.

“Unless there is a move to de-escalation, you have to assume that financing conditions around Russia will get even tighter,” he said. “Long-term, that’s going to be bad for growth and mean even more stagnation in the Russian economy.”

Natalia Orlova, head economist at Alfa Bank, said the central bank might now take more time over interest rate cuts that could boost growth: “Based on economic logic … it seems to me that it is dangerous to hurry with a rate cut in such uncertain conditions.”

Loko-Invest’s Kirill Tremasov said the biggest danger of the new sanctions might be in scaring foreign investors off Russian OFZ treasury bonds, popular in the West because of their high yields.

The yield on the benchmark 10-year OFZ rose as high as 7.32 percent on Monday as the price of the bond fell. It had stood at around 7.05 percent last week.

Foreigners’ holdings of OFZ bonds stood at nearly $40 billion, or 33.9 percent of all OFZ bonds as of Feb. 1, the last period for which data was available.

“For foreign investors, this is a very, very serious signal … and now there could be some OFZ outflows,” Tremasov said. “This will be reflected in the growth of interest rates in the economy.”

(Additional reporting by Andrey Ostroukh; Writing by Jack Stubbs; Editing by Kevin Liffey)

UK says world’s patience is wearing thin with Russia’s Putin after chemical attack

British Defence Secretary Gavin Williamson visits UK troops of the NATO Enhanced Forward Presence battle group at the military base in Tapa, Estonia March 25, 2018. REUTERS/Janis Laizans

TALLINN (Reuters) – British Defence Secretary Gavin Williamson said on Monday that the world was united behind Britain’s stance over the poisoning of a former Russian spy and that patience was wearing thin with Russian President Vladimir Putin.

Britain has blamed Russia for the attack on Sergei Skripal and his daughter Yulia with a military-grade Soviet-era nerve agent on March 4, winning the support of NATO and European leaders.

The Kremlin has denied any involvement and says Britain is orchestrating an anti-Russia campaign.

During a visit to Estonia, Williamson said the backing for Britain was in “itself a defeat for President Putin”.

“The world’s patience is rather wearing thin with President Putin and his actions, and the fact that right across the NATO alliance, right across the European Union, nations have stood up in support of the United Kingdom … I actually think that is the very best response that we could have,” he told reporters.

“Their (the Kremlin’s) intention, their aim is to divide and what we are seeing is the world uniting behind the British stance and that in itself is a great victory and sends an exceptionally powerful message to the Kremlin and President Putin.”

European Union member states agreed on Friday to take additional punitive measures against Russia over the attack on Skripal, found slumped on a bench with his daughter in the southern English city of Salisbury.

U.S. President Donald Trump is also considering the expulsion of some Russian diplomats, a source familiar with the situation said on Sunday.

Williamson also said he was surprised and disappointed by reports about European Union proposals to freeze Britain out of the Galileo satellite navigation project as part of negotiations over Britain’s exit from the bloc next year.

The Financial Times newspaper reported that the EU was looking to lock Britain’s space industry out of the 10 billion euro program to protect its security after Britain leaves the bloc next year.

“The United Kingdom has been absolutely clear that we do not want to bring the defense and security of Europe into part of the negotiations because we think it is absolutely vital,” Williamson said.

“So I very mush hope that the European Union commission will take the opportunity to see sense, re-calibrate its position and not play politics on something that is so vitally important which is European defense and security.”

(Reporting by David Marditste; writing by Michael Holden; editing by Guy Faulconbridge)

Kremlin supporters pressure Russian election observers before vote

FILE PHOTO: Russian President Vladimir Putin addresses the audience during a rally marking the fourth anniversary of Russia's annexation of Ukraine's Crimea region in the Black Sea port of Sevastopol, Crimea, March 14, 2018. REUTERS/Maxim Shemetov/File Photo

By Andrew Osborn

MOSCOW (Reuters) – Police last month detained David Kankiya, an observer at Russia’s forthcoming presidential election, yards from his home in southern Russia. Police said his car may have been used in a crime, according to Kankiya.

Hours later, Kankiya was charged with disobeying the police, something he denies, and jailed for five days by a court. Weeks later, his car tyres were slashed with a knife, he says, and on Tuesday, pro-Kremlin journalists ambushed him.

“I have information that you have insulted the Russian people,” one of the journalists said, a video of the incident shows.

Days before Sunday’s election, which polls show incumbent Vladimir Putin is on track to win comfortably, Golos, a non-governmental organization that monitors Russian elections, says it is under unprecedented pressure.

Its problems are part of what Kremlin critics say is a wider campaign by authorities to hinder or silence dissenting voices.

Opposition politician Boris Nemtsov was shot dead in 2015, while current opposition leader Alexei Navalny has been barred from running in Sunday’s election over what he says is a trumped-up fraud conviction.

The Kremlin, which denies involvement in Nemtsov’s murder, wants Putin’s re-election to be viewed as legitimate and largely clean in the West so as not to further damage already poor relations. At home, wary of street protests, the Kremlin is keen that voters see it in the same way.

The Kremlin says complaints about a crackdown on dissent are hollow. Individual cases are a matter for the relevant authorities who it says are only trying to uphold the law.

Equally, the Central Election Commission says it will do everything it can to ensure Sunday’s vote is free of fraud and has turned to Golos for advice on how to do that.

However, opposition leader Navalny, accused by Putin of being Washington’s pick for president, has predicted the authorities will resort to widespread fraud to deliver a Putin landslide and has spoken of organizing post-election protests of the kind that roiled Russia after Putin’s last election victory in 2012.

Golos says the authorities unfairly blamed it for those protests — some of the biggest since the Soviet collapse — because of its work publicizing what it said were serious election violations, something it plans to do again on Sunday.

Kankiya, a Golos coordinator in the Krasnodar Region, says that’s why he was targeted.

“I was detained and charged on a false pretext,” Kankiya, 28, told Reuters by phone. “It’s political pressure.”

A court in Krasnodar disagrees. It rejected his appeal against his arrest and jailing on Wednesday. Police say he was detained after he failed to produce identification during a routine check.

‘FOREIGN AGENT’

Election fraud has been a problem in Russia since the 1991 Soviet collapse.

Abuses have often been highlighted by Golos, whose observers spend election day at polling stations and flag suspected cases of fraud to the authorities.

Founded in 2000, the year Putin won his first presidential term, Golos says its problems began when Putin returned to the presidency in 2012.

“After the 2012 election, their task was to destroy Golos,” Grigory Melkonyants, the movement’s co-chairman said in an interview in his Moscow office, referring to the authorities.

A month after the election, the tax inspectors came. And, in July that year, Putin approved a law that forced non-governmental organizations engaging in political activity to register with the justice ministry as “foreign agents.”

Golos lost one of its main donors in 2012 when Moscow accused the United States Agency for International Development (USAID)of trying to influence politics and forced it to leave.

Soon, weighed down by the red tape that came with being designated a “foreign agent” and facing a funding squeeze, Golos was struggling to function. In July 2016, at the behest of the justice ministry, a court ordered Golos to close.

Today, Golos still operates after reconfiguring its structure in such a way that it is not classified as a legal entity.

PRESSURE

A shoe-string operation run out of a pokey Moscow office staffed by about nine volunteers, it says it relies on private donations from inside Russia.

It has coordinators in almost half of Russia’s voting regions, about 6,000 volunteers, and dozens of experts who train people how to observe elections.

Melkonyants says the movement on Sunday plans to field thousands of observers, run a telephone hot line for complaints, and chronicle reports of electoral abuses on a nationwide violations map on its website. It will deliver its verdict on how clean the election was on Monday.

But as election day draws near, pressure on Golos is intensifying.

Its volunteers have complained of being systematically stopped for long periods when leaving or entering the country by border staff who tell them there’s a note by their name that says they are linked to terrorism, Golos says.

REN TV, a Russian TV channel, on Monday broadcast what it billed as a special investigation into Golos and other groups. The program depicted Golos as a shadowy Western-funded group that worked to discredit Russia in the eyes of the world.

Andrei Klimov, a senator who heads up a committee in the upper house of parliament to prevent interference in Russia’s internal affairs, told the program such groups posed a threat.

“They (Golos and other groups) will try to trigger protest,” said Klimov.

And on Thursday, Golos said the landlord of a hall in Moscow it had agreed to rent for a call center on election day had annulled the rental contract after being told by the police to back out of the contract or face problems.

Kankiya, the Golos coordinator in southern Russia, said he would continue his work regardless.

“We’re the only election observation movement in Russia capable of operating on a large scale,” said Kankiya. “Many people don’t like that.”

(Editing by Cassell Bryan-Low)