Russia: EU to extend sanctions until March 15

The European Union noted that it will be rolling over the sanctions on some 200 Russian and Ukrainian separatist individuals to maintain pressure on Moscow for the full implementation of the Minsk II Accords of February 2015 by the end of the year. The decision will apparently be signed on during a meeting in mid-September, after asset freezes and travel bans were set to expire on September 15.

Thus far, none of the targeted Russian individuals have been part of President Vladimir Putin’s inner circle. But some 37 firms and other entities are still on the list. The most recent talk was of extending the sanctions to beginning of January, which struck some member states as too aggressive, but the majority approved it to be extended to March, which was largely expected by most analysts.

Implementation of the Minsk II Accords has been rocky, with new offensives and violations occurring regularly, as well as the increased shelling of the last two months has created a tough negotiating situation. Both Moscow and Kiev consistently blame the other for failing to uphold the truce.

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News Briefs:

  • Russian President Vladimir Putin visited China today to commemorate the Victory in Japan day, meeting with Chinese President Xi Jinping to discuss new areas of cooperation. Foreign Policy advisor Yuri Ushakov said he would meet with Xi Jinping to discuss linking initiatives present in the Silk Road Economic Belt and Eurasian Economic Union, as well as how to manage the challenges presented by OPEC.
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  • The situation on the ground in Afghanistan has grown worse for President Ashraf Ghani, with the Taliban controlling most of the territory in Helmand province, where they operate out of Musa Qala and grow stronger in the north and east of the country, as well as just outside of Kabul. The talks between Afghanistan and the Taliban have faltered since the recent announcement that Mullah Omar, the ostensible figurehead, has been dead since 2013, leading some to question who exactly represents the Taliban in its entirety.
  • The cotton harvest has started across Central Asia – fully in Turkmenistan, and the season extends a bit longer in Uzbekistan, where cotton is one of the main exports. The industry is the source of much controversy in the West for its laws dictating that every citizen regardless of age must participate in the harvest work. Economically, the value of cotton in international commodity markets has dropped significantly due to large reserves in China and declining demand for cotton clothing.
  • Kazakhstan’s Central Bank has set its new base interest rate at 12% after its record 23% devaluation of the tenge last month, abandoning its currency peg to a basket of international reserve currencies (notably they did not include the ruble). The statement additionally noted that it will supply unlimited credit to banks at five percentage points above the main rate and will accept deposits at 5% below the new rate in order to spur rapidly declining liquidity in the market, which has been hit hard in the past year and half due to declining oil prices. The real question is if this rate will be enough to curb the rampant inflation – but the CB has noted that medium-term high inflation rates are acceptable as long as it boosts liquidity and does not affect price stability too drastically.
  • With Senator Barbara Mikulski’s support, President Obama has formed his Congressional coalition that will allow for the passage of the Iran deal and make into a treaty enforceable by law, instead of an executive agreement. While Republicans are still rumbling about inspections and the Israel lobby is still pushing hard for renegotiation, it looks like this is final measure that will more or less guarantee its passage.

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