Press review: EU preps for gas cuts via Ukraine as China boosts naval and air power

Top stories from the Russian press on Saturday, December 28th

MOSCOW, December 28. /TASS/. The EU is preparing for the termination of Russian gas supplies via Ukraine; the EstLink 2 underwater cable incident raises heightened security concerns in the Baltic Sea; and China continues to strengthen its naval and air power. These stories topped Saturday’s newspaper headlines across Russia.

Izvestia: EU has been preparing for over a year for termination of gas supplies via Ukraine

The European Commission has been preparing for over a year for the termination of the transit of Russian gas through Ukraine, they told Izvestia. Slovakia and Austria are primarily interested in maintaining supplies, as Russia meets more than 60% of their needs. At the same time, according to the Russian embassy in Bratislava, Slovakia’s domestic needs are fully covered by imports from Russia. The situation in Moldova is also difficult, as it is threatened with a utility crisis in the event of a complete interruption of supplies via Ukraine. Kiev intends to stop the transit of Russian gas — the contract with Gazprom, which was concluded in 2019, expires at the end of this month.

• "The termination of the flow through Ukraine on January 1 is an expected situation, and the EU is ready for it. The European Commission, in coordination with the member states, has been working for over a year to prepare for a scenario in which the transit of Russian gas through Ukraine stops on January 1, 2025, and alternative supplies are ensured to the affected member states," EC representative Anna-Kaisa Itkonen told Izvestia.

  The transit of Russian gas through Ukraine reaches around 15 bln cubic meters per year. If it is stopped, the European market will lose about 1 bln cubic meters of gas per month, Deputy Director General of the Institute of National Energy Alexander Frolov told Izvestia. The EU will be able to replace such volumes by buying LNG on the exchange market, which will lead to a temporary increase in prices.

  "The European gas infrastructure is flexible enough to ensure the supply of non-Russian fuel to Central and Eastern Europe via alternative routes. Since 2022, it has been strengthened by significant new LNG import capacities," the representative of the European Commission told Izvestia.

  The second option is to shut down industrial plants. Against the backdrop of a cold winter, the European Union is already emptying its gas storage facilities at the fastest rate since 2021: reserves have fallen below 75%. Landlocked Central European countries could suffer the most from the end of transit, as the cost of LNG will be significantly higher for them.

  Austria and Slovakia are most interested in the continuation of transit, as Russia supplies more than 60% of their gas needs, the EC told Izvestia, noting that the EC intends to pay special attention to finding alternative fuel supplies for Moldova. Unlike Slovakia or Austria, Moldova may experience a real utility crisis if it is not possible to agree on the continuation of transit through Ukraine or on bypass supplies, an expert at the National Energy Security Fund and the Financial University, Stanislav Mitrakhovich, told Izvestia.

  Ukraine itself will suffer from the termination of transit through its territory, Izvestia writes. According to Western journalists, its income from this business in 2022 amounted to $1.2 bln and $800 mln in 2023, which is about 0.5% of the country’s GDP. Kiev risks losing about the same amount next year.

   

  Izvestia: EstLink 2 underwater cable emergency once again raises security issue in the Baltic Sea

  The underwater energy cable EstLink 2, connecting Finland and Estonia, unexpectedly failed. Finnish security forces, trying to find the culprits, detained the tanker "Eagle S," registered in the Cook Islands but carrying Russian oil, accusing its crew of deliberately damaging the cable. In response, NATO announced that it would use the incident as a pretext to combat the Russian "shadow fleet" of tankers, and the Estonian prime minister called for greater North Atlantic Treaty Organization (NATO) involvement in protecting critical infrastructure in the Baltic Sea, Vedomosti writes.

  In a joint statement, the EU’s High Representative for Foreign Affairs, Kaja Kallas, and President of the European Commission Ursula von der Leyen condemned the "destruction of critical infrastructure in Europe" and promised "new sanctions against Russia’s shadow fleet."

  Political scientist Maxim Reva told Izvestia that the EstLink 2 incident looks extremely strange. "The suggestion that the tanker deliberately plowed an anchor into the seabed to ensure that the cable was destroyed does not stand up to scrutiny either: anchors are designed to hold a ship in place. The cable is also not just lying on the seabed — it has strong protection, which, as I understand, was reinforced after the January failure. Destroying it would require a special operation involving qualified underwater specialists," the expert said.

  In his opinion, this is a provocation with a double purpose. First, it is a pretext to intensify the fight against the Russian "shadow fleet." Second, it is part of an escalation strategy aimed at blocking possible peace initiatives by the new US president, Donald Trump.

  Natalia Eremina, a doctor of political science and a professor at St. Petersburg State University, agrees. "We are talking about a deliberate escalation of tensions in the Baltic Sea region. This incident is being used to justify the further militarization of the region, the intensification of NATO exercises there, and efforts to combat cargo shipping to and from Russia. Finland and Estonia have repeatedly declared their readiness to block the ‘neck’ of the Gulf of Finland for Russia. Officially, however, they will not impose a blockade — this would amount to a declaration of war. There will be many targeted attempts to detain ships with Russian cargo — as happened in the case of the ‘Eagle S’ tanker," Eremina believes.

  In her opinion, Russia should raise this issue at the international level as soon as possible in order to draw the world’s attention to NATO’s dangerous provocations in the Baltic Sea.

   

  Vedomosti: China expands its sea and air power

  A new amphibious assault ship, the Sichuan, has been launched in China, the South China Morning Post reported on December 27. This is the largest ship of this type in the Chinese fleet. It has a full displacement of more than 40,000 tons and is equipped with a special electromagnetic launch catapult for launching heavy aircraft. According to Vedomosti, even the America-class amphibious assault ships, to which the Chinese counterpart is similar in size, are not equipped with such a catapult.

  "This is a great achievement for China, as no one has such a ship yet," Director of the Centre for Comprehensive European and International Studies at the Higher School of Economics Vasily Kashin told the newspaper. The expert explained that the main advantage of the new Chinese amphibious assault ships over their American counterparts is their ability to accommodate, transport, and launch large attack drones. The ship has serious strike potential and significantly expands China’s capabilities not only in the Asia-Pacific region but also globally.

  Kashin emphasized that the presence of such a ship will allow China to send significant groups far from its coast without relying on the support of coastal aviation. Moreover, in the event of a Taiwan operation, these amphibious assault ships would allow China to attack the island from Taiwan’s less protected east coast.

  In addition to this milestone, this week China reportedly hosted a flight of two new sixth-generation fighters. They were manufactured by Chengdu and Shenyang Aircraft Corporation, part of the Aviation Industry Corporation of China.

  In addition to China, the United States (via its NGAD program), Russia, and Europe (through the Tempest consortium) are developing next-generation fighters. According to the US Air Force’s November report to Congress, the agency suspended the tender for a next-generation aircraft production contract because of the need to revise several requirements.

  Almost all of China’s defense industry is tied to strengthening the naval component of its military power, Vasily Kashin added. If Beijing has indeed managed to reach the stage of flight testing two new types of combat aircraft, then this is a serious bid for technological leadership, because no other country has yet announced a similar achievement, at least officially.

   

  Nezavisimaya Gazeta: Trump’s approval rating declines amid controversial foreign policy proposals

  For the first time since his election as president, polls have shown a decline in Donald Trump’s approval rating. While Americans generally approved of his appointments, some of his statements, including those related to foreign policy issues, were misunderstood by the people, Nezavisimaya Gazeta writes. These include Trump’s proposals to expand the territory of the United States to include Canada, Mexico, Greenland, and Panama.

  RealClearPolitics presented the results of national polls conducted in December, revealing a clear trend of Trump’s declining popularity. Trump’s worst result was recorded by a poll conducted by Ipsos on behalf of Reuters from December 13 to 15. According to the poll, 55% disapproved of the president-elect’s activities, while only 41% approved of them.

  The world has recently been abuzz with discussions about the president’s foreign policy initiatives. On Wednesday, he reiterated that he was not joking and that he genuinely would not mind annexing Mexico, Canada, Greenland, and the Panama Canal to the United States.

  According to Vladimir Vasiliev, a Senior Research Fellow at the Institute for US and Canadian Studies at the Russian Academy of Sciences, there is still a clear logic behind the foreign policy initiatives of the president-elect that seem unconventional. "There is a certain feeling in the country that under previous presidents, Washington has neglected its own neighborhood, so to speak. Illegal migrants have been pouring into the United States through Mexico. China is increasing its influence in Latin America and has even acquired two ports in Panama. Hence Trump’s idea to regain control of the Panama Canal, which the US abandoned in 1999 under Democrat Bill Clinton, despite criticism from Republicans. Brazil has become a member of BRICS. There is a serious structural trade imbalance with Canada and Mexico," Vasiliev explained.

  The expert believes that by talking about the possibility of new territories joining the US, Trump is showing the country’s neighbors that the White House will now act decisively if they do not make concessions.

  Trump’s idea to annex Greenland could be seen as a way to influence the US’s European allies, with whom the president-elect has many grievances. Denmark is a member of NATO. However, it does not meet the condition of increasing defense spending to at least 2% of GDP, which is a demand that not only the alliance’s leadership but also Trump himself has long insisted on.

   

  Rossiyskaya Gazeta: Russian IT market demonstrates impressive growth in 2024

  The Russian IT market grew at an average annual rate of 19% from 2019 to 2023, reaching 2.7 trillion rubles ($25.54 bln) in 2023. By the end of 2024, the IT market’s volume will reach 3.3 trillion rubles ($31.21 bln), and its share in Russia’s GDP will amount to 1.8%, according to a study by MWS (MTS Web Services), a subsidiary of the MTS Group. Experts told Rossiyskaya Gazeta that the tightening of requirements for critical infrastructure, set to take effect on January 1, 2025, will be the main driver of growth in 2025.

  "The growth of the Russian IT market in 2024, according to preliminary estimates, exceeded 10%. The number of IT companies in Russia has surpassed 200,000, and the total volume of the IT market has reached an astronomical 5.5 trillion rubles. At the same time, the number of IT specialists has increased to about 850,000 people. The register of domestic software now contains nearly 24,000 products," Executive Director of ARPP Domestic Software Renat Lashin told the newspaper.

  "In recent years, the accelerated transition to Russian software has been driven not only by geopolitical events but also by government policies. For example, the President signed Decree No. 166 mandating the cessation of foreign solution usage starting January 1, 2025," the expert added.

  The Russian cloud market (in the IaaS/PaaS segments) has been growing by an average of 42% annually from 2019 to 2023. In 2019, its volume was 31.4 bln rubles ($296.9 mln), and by 2023 it had expanded to 127.3 bln rubles ($1.2 bln). According to MWS forecasts, in 2024 the market’s size will grow by 32% to 168.1 bln rubles ($1.6 bln).

  "By the close of 2024, the Russian IT market is exhibiting qualitative growth in all key segments. Developers and providers of IT solutions have largely adapted successfully to the evolving market reality. Proprietary platform solutions are under active development, strategic partnerships are being forged, including with friendly foreign vendors, and IT companies are making significant plans for public offerings," said MTS Vice President for Infrastructure Development, Igor Zarubinsky.

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