Russian media review: A new round of peace talks in Minsk shows little sign of progress, while Russia’s economic situation continues to deteriorate. Both developments helped shape how the Russian media saw the big events of the past 12 months.

2014 has been for Russia full of surprises and difficulties. Photo: AP

The Russian media focused on two major events this week: the relatively uneventful Minsk peace talks between Ukraine the self-proclaimed separatist republics in Eastern Ukraine and the stagnating economic situation in Russia. And, with just a few days until the start of a new year, the media continued to look back at the most important events of the past 12 months in order to understand better what could await Russia in 2015.

Meeting in Minsk

The Russian media has been ambivalent about a meeting on the Ukrainian crisis held this week in Minsk. The meeting took place between the Russian ambassador in Kiev, Mikhail Zurabov; the official representative of the Organization for Security and Cooperation in Europe (OSCE) in Ukraine, Heidi Tagliavini; former Ukrainian President Leonid Kuchma; and the authorized representatives of the Donetsk and Lugansk People’s Republic, Denis Pushilin and Vladislav Deinego, respectively.

On the one hand, there has been a tendency among members of the opposition press (Ekho Moskvy, Nezavisimaya Gazeta) to consider this meeting a formality that cannot affect the course of events. On the other hand, there are a number of media outlets that suggest that it is still possible to make some progress, and that such meetings are necessary (Channel One).

Tatyana Ivzhenko, a correspondent for Nezavisimaya Gazeta in Ukraine, interviewed experts who have observed that the parties have almost mutually exclusive interests and demands, which means that short-term prospects of achieving some form of agreement are limited at best. In particular, Ivzhenko cites Valentin Badrak, a specialist with the Center for Army, Conversion and Disarmament Studies.

"The strategic goals of the combatant parties will not be achieved," Badrak argues. "Russia will not surrender Crimea nor step back from a land corridor to the peninsula. Ukraine will not accept Crimea as a Russian territory and will fight to maintain control of the entire country. The West will not accept the alteration of state boundaries in defiance of international law, and the Luhansk People’s Republic and Donetsk People’s Republic will continue their demands for independent status and Ukrainian funding."

Yuriy Shulipa, a blogger on the Ekho Moskvy website, is also extremely negative in his evaluation of the negotiations, considering them pointless. Shulipa argues that, essentially, only the Ukrainian side needs a positive result, all the others are simply biding their time and building up their forces. He, in particular, observes that, "Ukraine needs positive results. The opposing party does not need positive results."

He further suggests that, “for Russia, the Minsk talks are a way to gain time for the military build-up and military consolidation in the occupied territories." Furthermore, the author does not consider the Luhansk and Donetsk Peoples’ Republics even as parties, regarding them as puppets in the hands of the Russian authorities.

Channel One expressed optimism regarding the Minsk meeting, highlighting the fact that at least one agreement has been reached on a prisoner exchange.

"At present we only know that the parties have managed to agree on a prisoner exchange. This was confirmed by the heads of the Lugansk and Donetsk Peoples’ Republics and also the Ukrainian State Security Service,” its website reads. 

Economic situation in Russia

The events of "Black Tuesday" (the collapse of the ruble on Dec. 16), combined with Russian President Vladimir Putin’s clear desire to gloss over the nation’s financial problems during his press conference on Dec. 18, have forced the Russian media to discuss Russia’s economic problems and prospects even more actively. Immediately, several large publications and Internet news sites published a large number of items on this subject. In general, the Russian press is extremely pessimistic, and that includes leading business media outlets such as Vedomosti and Kommersant. Only a few individual publications could be called even remotely optimistic, among them Rossiyskaya Gazeta.

Economist Andrei Movchan, writing for Slon, gives his forecast for 2015, observing that, "The capacity for growth is absent in the country at present - manufacturing capacity is overwhelmed, there is no capital available to create anything, and unemployment is very low. So the only scenario is that of long-term stagnation, possibly a slow recession, and a relative backward creep from the world at 3.5 to 5 percent a year."

Also, he predicts that, “In 2015, there will be in any case a drop by 30-40 percent in the level of real income for the population, a drop in consumer demand and imports, as the value of the dollar depends on the price of oil.”

According to Vedomosti writer, Olga Kuvshinova, the economic crisis in Russia is gaining momentum. She argues that forecasts promise a two or three year recession or, at best, years of stagnation after the upcoming 2015 recession. Inflation will again be in double figures as it was in the mid-2000s. Incomes and the standard of living for the population will be substantially reduced, confidence in the ruble will be undermined, the sovereign rating could return to junk status, which it hasn’t been rated as since 2005.

"During the year, the country has lost the achievements of the last five, or even ten years, but the worst thing of all is that it has lost the potential of restoring these achievements in the foreseeable future," Kuvshinova highligts.

Dmitry Butrin of Kommersant analyzed the economic results of this year in detail and came to the conclusion that 2015 is not going to get any better.

"It is unlikely that we will get an answer specifically in 2015 to the question of what to do for a long-term plan: Strange though it may seem, the government already has more important work," he said. "The federal budget has a shortfall of 4 trillion rubles and the reserves in the Reserve Fund are sufficient for only 1.5 years. This is quite a sufficient reason to wonder about what’s going to happen in 2020: The Russian government is acting as though it is 2008-09 – it is not up to the job of developing a long-term plan."

Russia's prominent economist Yakov Mirkin suggests in his column for Rossiyskaya Gazeta that, in the near future, the Russian economy has enough energy to continue to function and provide stability. However, it is already necessary to start thinking about the need for fundamental changes. "At the moment we have enough international reserves and protected currency streams from overseas to support the economy and "social programs," keeping it more or less stable as we go," he said.

"In the financial sphere, we won’t go into hyperinflation, or unreliable payments and banking. And in the longer term, we need to respond to the challenges... There is still time to do this. We need to turn things around and completely change our position. The third option of maintaining the middle road and leaving everything as it is, tidily waiting, neatly swaying on our feet, is not an option," Mirkin added.

A look back at the tumultuous events of 2014

Already this week, some Russian media began to write about the main political outcomes of 2014. Whether it’s the pro-government newspapers (Izvestiya), the independent business media (Vedomosti), they agree on one thing: It has been a long time since we had so many momentous changes occur in a single year, and 2015 looks as though it will be no less filled with world-changing events.

Petr Kozlov from Vedomosti caustically notes, that having acquired Crimea and a pass to the “club of great powers,” Russia undermined in 2014 all its previous achievements, not only in foreign policy but also in domestic politics.

As Kozlov notes, "diplomacy is a painstaking task that requires not only skill, but also patience. Russia’s ‘hybrid diplomacy,’ combining propaganda with ‘paratroopers accidentally crossing the Ukrainian border’ seemingly achieved almost instantaneous results: "Crimea is ours" and the armed conflict in Donbas has hindered Ukraine’s attempts to come closer to NATO. But it is an ordinary Russian who will be forced to pay for this with the collapsed ruble... The Crimean cake was found not to the liking of our wallet or our general society, which after sanctions were enacted, left us with only Belorussian shrimp."

Ekaterina Larinina from Argumenty i Fakty argues that the outgoing year has been a difficult one and it was not only difficult for Russians with the prices for oil falling and the unstable ruble, but also with "the summer flood of refugees from southeast Ukraine, and fractures in Russian-Ukrainian families which entered people’s homes" after Crimea's accession to Russia and the beginning of hostilities in Donbas.

"The world has changed as a result the events in 2014: It is being reshaped and is undergoing a metamorphosis. We are at the threshold of a new world order," Larinina believes.

Meanwhile, political scientist Oleg Bondarenko of pro-Kremlin Izvestiya laudatorily highlights that "in 2014 alone we lost Ukraine, returned Crimea, held an Olympics (which we won!), lost the ruble, found ourselves on the edge of war (at the very least, a cold one) with the West, rescued Donbas, signed the ‘deal of the century’ with China, and cancelled the South Stream."