At the same time as Russia was attempting to win over foreign investors at the St. Petersburg International Economic Forum, Europe was taking steps to limit Russia’s financial options abroad.

Russian President Vladimir Putin at a panel discussion during the 2015 St. Petersburg International Economic Forum. Photo: RIA Novosti

The St. Petersburg International Economic Forum, which took place last week and featured the appearance of President Vladimir Putin, without a doubt was the main source for news and discussion in the Russia media. At the same time as Russia was attempting to court foreign investors in St. Petersburg, however, Europe was extending sanctions against Crimea and Sevastopol and freezing Russian financial assets abroad. 

The St. Petersburg International Economic Forum

The business paper Vedomosti analyzed Putin’s address at the forum and observed that the president was overly optimistic, although one can understand why – a year ago, it looked likely that sanctions would deal a more severe blow to Russia’s economy.

In the meantime, as the head of state observed, not everything is going badly. In several areas – for example, the growth of processed exports and the development of agriculture – things have even improved. Based on responses from businessmen who were questioned, the publication also accuses the president of lacking a clear plan of action to develop business.

Pro-government Rossiyskaya Gazeta believes that the forum demonstrates the invalidity of the theory that Russia has been internationally isolated. The publication also highlights the high degree of representation at the forum and the numerous contracts that were signed.

(Also read: Economically, 'Russia is in the middle of the storm')

The website for Ekho Moskvy radio station criticized the forum, calling it “the Kremlin’s latest campaign in economic propaganda.” One thing is certain, says the radio station: The investment climate in Russia is extremely unfavorable, and an improvement cannot be expected until the government starts to create a coherent economic policy. 

Furthermore, says the radio station, the belief is that any foreign investors present at the event came not to invest money, but to bide their time for a better opportunity to invest.

Independent media publication Slon also criticized the forum’s agenda, noting that the authorities are not in the mood for any form of serious reforms and lack a coherent economic plan, while hoping for a miracle.

Yukos and sanctions against Russian overseas assets

The situation surrounding the foreign assets belonging to oil company Yukos, which at one time was headed by fallen oligarch Mikhail Khodorkovsky, has clearly escalated out of Russia’s control.

Several years ago, a number of former Yukos shareholders filed a lawsuit against Russia’s actions in liquidating the company. According to the decision of The Hague court in July 2014, they won their case; as a result the Russian Federation must pay compensation.

Last week authorities in Belgium, Austria, and also France blocked several Russian foreign assets, including property of several separate government representative offices, and also bank accounts.

Although the process of unblocking the accounts was initiated almost immediately, the Russian media paid a great deal of attention to the scandal.

Business publication Vedomosti discussed why this was such a shock to Russia. Neglecting official institutions, the Russian authorities simply did not expect such decisive action from the European courts.

Opposition-minded Novaya Gazeta wrote that blocking the accounts of official missions is a breach of international law since it hinders the usual business of diplomatic representation. In this sense, the newspaper notes, the situation is very tense and is close to a scandal.

Pro-government TV network Channel One reported on the situation in an indignant tone, and quoted Russian Foreign Minister Sergey Lavrov, who promised a response from the Russian Federation.

Europe extends sanctions against Russia

Last week, European nations prolonged sanctions against Crimea and Sevastopol, an act that Russian government officials reacted to with harsh words.

Business publication Vedomosti gives the reaction of the Russian Ministry of Foreign Affairs, which called the decision “political blackmail.” The Ministry of Foreign Affairs also stated that such a pressure tactic would not bear fruit.

Opposition Novaya Gazeta gives the response of the Russian Ministry of Economic Development, which is not planning to introduce new limiting, counter-measures but is intending to maintain the existing ones.

Business Kommersant published a long, analytical article connected with this based on the latest European research on sanctions: The sanctions regime is harming Europe, in particular, it is threatening more than two million jobs and is imposing a total cost of around 100 million euro.

The news about maintaining the sanctions had another extremely unpleasant element in it for Russia: The European officials named the date for the extension of sanctions against Russia as June 22 – the anniversary of Nazi Germany’s invasion of Russia. (On June 22, 1941, Germany attacked the USSR. – Editor’s note.)

Russia perceived this as being a diplomatic faux pas, and a number of officials immediately commented on it. The official Rossiyskaya Gazeta quoted Konstantin Kosachev, the head of the Council of the Federation Committee on Foreign Affairs, who criticized Europeans for being ignorant of history.

The Russian military shows off its latest and greatest

The large Army 2015 Military and Technical Forum took place last week at Kubinka near Moscow and was designed not only to demonstrate the latest achievements by Russia’s arms industry, but also to improve the image of the Russian army.

Popular tabloid Moskovsky Komsomolets gives an overview of the most interesting examples of new equipment on display at the forum, including next generation pistols, underwater drones and the latest mobile SAM missile systems.

Independent Slon compares Army 2015 with the Le Bourget Air Show, observing that Russia has gradually become unnecessary at European air shows: Europeans are not interested in Russian equipment and Russia sells a large number of its weaponry to Asian partners.

Pro-government Rossiyskaya Gazeta gives a positive summary of the forum, especially emphasizing the size of the event – it was simultaneously an air show, exhibition, study and even a musical event. The publication talks about the debut of several types of weapons.

Quotes of the week:

Vladimir Putin on his refusal to accept the decision of the Arbitration Court in The Hague on the Yukos Case

“For cases of such a nature, The Hague Arbitration Court only has jurisdiction on those countries that have signed and ratified the European Energy Charter.”

Sergey Lavrov, Russian Minister of Foreign Affairs on blocking Russian accounts and property

“This is an extremely crude breach of all the Vienna Conventions on diplomatic relations. We must, first and foremost, respond in kind. I hope that common sense will prevail, at least in respect to our embassies and other diplomatic offices. And that it will be unnecessary for us to create a similar situation for the Belgian Embassy in the Russian Federation.”

Official statement by the Russian Ministry of Foreign Affairs on the extension of sanctions against Crimea and Sevastopol

“In accordance with the provisions of international law, we consider as absolutely unacceptable any discrimination against the people of Crimea and Sevastopol on a political and territorial basis. We all remember the historical examples of collective punishment of nations. It was hard to imagine that Europe would face it in the 21st century.”