UPDATE5: Russia foresees no great sanctions’ impact on ruble

(Adds paragraphs 10-13, 20-23)

PETROZAVODSK/BRUSSELS, Jul 26 (PRIME) -- Possible new U.S. sanctions against Russia are not expected to affect the ruble to a great extent, Economic Development Minister Maxim Oreshkin told reporters on Wednesday.

“We have a floating rate, there are always some fluctuations, this is why some fluctuations are not ruled out but we expect nothing extraordinary,” Oreshkin said, adding that the ministry has no plans to worsen the macroeconomic outlook due to the measures.

The U.S. Congress voted for a bill including new sanctions against Russia and several other states by an overwhelming majority on Tuesday. The bill will come in force if signed by the president.

The bill prohibits companies to invest more than U.S. $1 million in a single payment or more than $5 million during the course of a year in construction of Russian export pipelines, as well as provision of goods, services, technologies and information support for the construction. The U.S. will continue standing against the construction of the Nord Stream-2 gas pipeline.

A diplomatic source in Brussels told PRIME that Poland, Baltic and northern E.U. member-states are the main European advocates of the new U.S. sanctions targeting the Russian gas pipeline project Nord Stream-2.

The source said, “The new sanctions are supported most of all by Poland, the Baltic states and the north European members of the E.U. (such as Sweden, Finland, Denmark).”

The source said that the launch of the Russian pipeline project would curtail Hungary and Slovakia’s revenue from re-exports of Russian gas to Ukraine. Austria and Germany are the main beneficiaries of the project. “It is evident that the new U.S. sanctions split the E.U. attitudes.”

Nord Stream-2 envisages construction of two lines of a natural gas pipeline with an annual capacity of up to 55 billion cubic meters, running from the Russian shore to Germany under the Baltic Sea. Gazprom is implementing the project together with Engie, OMV, Royal Dutch Shell, Uniper and Wintershall.

A Shell spokesperson abstained from assessing possible effect of the sanctions against Nord Stream-2. An OMV representative said that the company will follow the new restrictions arising from sanctions.

Wintershall CEO Mario Mehren said that anti-Russian sanctions must not be used to promote the U.S. economic interests such as LNG sales to Europe.

“Sanctions should not be used as an element to promote own economic interests such as sales of the U.S.-produced LNG to Europe. Geopolitical economy seems to set the rules nowadays, while we, the companies, whose interests and projects are affected, are just a ping-pong ball in the game,” he said.

“The German government and the European Commission are solid against the new U.S. extraterritorial sanctions, and we support the objections completely.”

The executive added that the framework of cooperation between Russian and the European Union needs to be determined by them alone and must not be influenced by political decisions of third states. Energy supplies from Russia are an integral part of the European energy architecture and all attempts to hinder the deliveries look undermining the continent’s power security.

Oreshkin said that the measures will affect the European business negatively and will limit the authority of the U.S. president.

The European Commission said in a statement that it is ready to respond if the new U.S. sanctions against Russia are implemented disregarding the European worries.

“Commissioners expressed their concerns notably because of the draft bill's possible impact on E.U. energy independence,” the statement says.

President Jean-Claude Juncker said, as cited in the statement, “This is why the commission concluded today that if our concerns are not taken into account sufficiently, we stand ready to act appropriately within a matter of days.”

Konstantin Kosachyov, ñhairman of the foreign affairs committee of Russia’s Federation Council, the supreme chamber of parliament, said that the authority has already started to discuss retaliation.

“Experts must define which measures they will be. We have already started conversation in this respect but we have not finalized it yet. It is good that it is advancing,” Kosachyov said.

Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, said that the U.S. use the sanctions as an instrument of unethical competition to push Russian companies out of the European energy market.

“It is an aggressive way to drive competitors out of the market for benefit of the U.S. business,” he said.

Shokhin also said that reaction of some European countries, which can scale down cooperation with Russia, is the most unpleasant consequence of the situation.

The official is sure that Russia should follow China’s economic model to embed into global supply chain and try to discover new markets instead the U.S. and the E.U.

End