Latest news with #UkraineConflict
CNA
4 hours ago
- Business
- CNA
Merz to meet Trump in US for talks on Ukraine, trade, Middle East
BERLIN: German Chancellor Friedrich Merz will meet with US President Donald Trump on Thursday (Jun 5) for talks at the White House, with the Ukraine and Mideast conflicts on the agenda along with rocky trade relations. The talks will mark Merz's first official visit as chancellor since taking office in early May, and be the first time the two leaders have met. The two leaders will discuss relations between the two countries, German government spokesman Stefan Kornelius said Saturday, as well as "the Russian war of aggression against Ukraine, the situation in the Middle East and trade policy". Trump has rattled Europe with shifts in security and trade policy since returning to the White House, including an array of tariffs on European partners. Speaking at the WDR Europaforum conference last Monday, Merz said the European Union could retaliate with measures against US technology companies or other tariffs if the transatlantic trade conflict escalates. "We shouldn't react heedlessly and hectically," Merz said. "But if we can't do anything else, we would need to use this tool." But Merz's government, which last week said it would help Kyiv develop long-range missiles, wants to make sure that Washington will not walk away from Ukraine during its war with Russia. Merz and Trump have already had several telephone conversations, with the two agreeing earlier this month to visit each other, without giving dates. With regards to the conflict in Gaza, Merz has sought to heighten the pressure on Israel over its policies, balancing Berlin's support for the Israeli government with criticism of how it is fighting in the territory. "I no longer understand what the Israeli army is now doing in the Gaza Strip," he told public broadcaster WDR last week, warning the Israeli government to not do that which "friends are no longer willing to accept".
Russia Today
4 hours ago
- Business
- Russia Today
Defeating Russia impossible
It has been clear from the very beginning of the Ukraine conflict that Russia cannot be defeated, particularly due to its nuclear status, German Foreign Minister Johann Wadephul has told the SZ newspaper. Kiev's Western backers, including top officials in Germany, France, and the UK, as well as the US under former President Joe Biden's administration, repeatedly stated the intent to inflict a 'strategic defeat' on Moscow in the Ukraine conflict, or at least to ensure that it does not emerge victorious. That justification has been used to support continued military assistance to Kiev. Wadephul admitted on Friday that it was obvious the conflict between Moscow and Kiev can only be resolved in a diplomatic way. 'It was clear from the beginning that this war would most likely end through a negotiated settlement,' Germany's top diplomat told SZ in a lengthy interview. 'One thing is true: a complete defeat in the sense of a capitulation by nuclear-armed Russia could not have been expected,' the minister stated, adding that 'we have now become a little more honest' in this regard. He still maintained that Kiev's troops have been 'successfully defending' against Moscow's forces, although the Ukrainian military has been losing ground along the entire front over the past several months. The foreign minister maintained it was important to help Kiev get a 'strong negotiating position' at peace talks and claimed that Russia was 'threatening' Germany as he justified a planned military buildup and increase in defense expenditures. He also said that relations between Moscow and Berlin could no longer be described as a 'clear peace situation.' Berlin has taken an even more hardline position on Russia under new Chancellor Friedrich Merz. In the weeks since taking office, Merz has lifted range restrictions on Ukrainian strikes with German-supplied missiles and hinted at the possibility of providing Kiev with Taurus missiles, which have a range of 500km and could reach Moscow. Germany has also announced a new military aid package for Kiev worth €5.2 billion ($5.6 billion), which Berlin says would be allocated mostly to long-range weaponry production inside Ukraine. Russian Foreign Minister Sergey Lavrov reacted to Merz's statements by saying that Berlin's 'direct involvement in the war is now obvious.' Germany already followed a similar 'slippery slope' a couple of times in the last century 'down toward its own collapse,' he added.
Russia Today
9 hours ago
- Business
- Russia Today
Microsoft subsidiary files for bankruptcy in Russia
One of Microsoft's Russian subsidiaries has announced plans to file for bankruptcy, according to a note published on the official Fedresurs registry on Friday. The US-based tech giant opted to exit the country shortly after the escalation of the conflict in Ukraine. In March 2022, the corporation stopped selling its products and services in Russia, pausing other aspects of its business in the country to comply with sanctions introduced by the West against Moscow amid the Ukraine conflict. Since then, a wide range of Russian corporate giants - including Severstal, Uralkali, VTB, MegaFon, Gazprombank, and others - have filed lawsuits against the company's local subsidiary, Microsoft Rus. The total value of the suits related to breach of contractual obligations after the exit amounts to 341 million rubles (nearly $3.6 million), according to the Russian business daily RBK. Shortly after pulling the plug on operations in Russia, the company stopped renewing Microsoft 365 subscriptions—including Outlook, Teams, Office, OneDrive, and SharePoint services—for its corporate clients, disconnected a number of Russian organizations from cloud services such as Visio Online, Project Online, and Power BI, and introduced other restrictions. According to data tracked by RBK, the revenue of Microsoft's Russian subsidiary last year amounted to 161.6 million rubles (nearly $2 million), with net profit totaling 174.1 million rubles ($2.13 million). The data shows the company reported revenue of 6.9 billion rubles ($84.5 million) and a profit of 638.1 million rubles ($7.8 million) in 2021, which marked its last full year of operations in Russia before deciding to quit. Earlier this year, the multinational registered the trademark 'Microsoft Places' with the Russian patent office, Rospatent. According to the filing card, the company plans to provide or grant temporary access to 'downloadable computer software for managing hybrid planning, workplace management, office space management,' and other types of software until 2023. In recent months, foreign corporations—including McDonald's, Hyundai, Intel, LG, IKEA, Chanel, Rolex, and Louis Vuitton—that had previously exited Russia have begun registering new trademarks in the country, signaling their potential return. Earlier this week, Russian President Vladimir Putin urged the creation of a program for foreign corporations willing to return to the Russian market, 'but only insofar as it aligns with the protection of our own business interests.' Speaking with business leaders in the Kremlin, the president emphasized that Moscow won't be 'rolling out a red carpet' for McDonald's and other companies.
Yahoo
12 hours ago
- Business
- Yahoo
Trump and Putin want to talk business once the Ukraine war ends. Here's why it won't be easy
Hundreds of foreign companies left Russia after the 2022 invasion of Ukraine, including major U.S. firms like Coca-Cola, Nike, Starbucks, ExxonMobil and Ford Motor Co. But after more than three years of war, President Donald Trump has held out the prospect of restoring U.S.-Russia trade if there's ever a peace settlement. And Russian President Vladimir Putin has said foreign companies could come back under some circumstances. 'Russia wants to do largescale TRADE with the United States when this catastrophic 'bloodbath' is over, and I agree,' Trump said in a statement after a phone call with Putin. 'There is a tremendous opportunity for Russia to create massive amounts of jobs and wealth. Its potential is UNLIMITED.' The president then shifted his tone toward Putin after heavy drone and missile attacks on Kyiv, saying Putin 'has gone absolutely crazy' and threatening new sanctions. That and recent comments from Putin warning Western companies against reclaiming their former stakes seemed to reflect reality more accurately — that it's not going to be a smooth process for businesses going back into Russia. That's because Russia's business environment has massively changed since 2022. And not in ways that favor foreign companies. And with Putin escalating attacks and holding on to territory demands Ukraine likely isn't going to accept, a peace deal seems distant indeed. Here are factors that could deter U.S. companies from ever going back: Risk of losing it all Russian law classifies Ukraine's allies as 'unfriendly states' and imposes severe restrictions on businesses from more than 50 countries. Those include limits on withdrawing money and equipment as well as allowing the Russian government to take control of companies deemed important. Foreign owners' votes on boards of directors can be legally disregarded. Companies that left were required to sell their businesses for 50% or less of their assessed worth, or simply wrote them off while Kremlin-friendly business groups snapped up their assets on the cheap. Under a 2023 presidential decree the Russian government took control of Finnish energy company Fortum, German power company Unipro, France's dairy company Danone and Danish brewer Carlsberg. Even if a peace deal removed the U.S. from the list of unfriendlies, and if the massive Western sanctions restricting business in Russia were dropped, the track record of losses would remain vivid. And there's little sign any of that is going to happen. While the Russian government has talked in general about companies coming back, 'there's no specific evidence of any one company saying that they are ready to come back,' said Chris Weafer, CEO of Macro-Advisory Ltd. consultancy. 'It's all at the political narrative level.' Russia's actions and legal changes have left 'long-lasting damage' to its business environment, says Elina Ribakova, non-resident senior fellow at the Bruegel research institute in Brussels. She said a return of U.S. businesses is 'not very likely.' 'We need to strangle them' In a meeting at the Kremlin on May 26 to mark Russian Entrepreneurs Day, Putin said that Russia needed to throttle large tech firms such as Zoom and Microsoft, which had restricted their services in Russia after Moscow's invasion of Ukraine, so that domestic tech companies could thrive instead. 'We need to strangle them,' Putin said. 'After all, they are trying to strangle us: we need to reciprocate. We didn't kick anyone out; we didn't interfere with anyone. We provided the most favorable conditions possible for their work here, in our market, and they are trying to strangle us.' He reassured a representative from Vkusno-i Tochka (Tasty-period) — the Russian-owned company that took over McDonald's restaurants in the country — that Moscow would aid them if the U.S. fast food giant tried to buy back its former stores. Asked for comment, McDonald's referred to their 2022 statement that 'ownership of the business in Russia is no longer tenable.' Not much upside On top of Russia's difficult business environment, the economy is likely to stagnate due to lack of investment in sectors other than the military, economists say. 'Russia has one of the lowest projected long-term growth rates and one of the highest levels of country risk in the world,' says Heli Simola, senior economist at the Bank of Finland in a blog post. 'Only Belarus offers an equally lousy combination of growth and risk.' Most of the opportunity to make money is related to military production, and it's unlikely U.S. companies would work with the Russian military-industrial complex, said Ribakova. 'It's not clear where exactly one could plug in and expect outsize returns that would compensate for this negative investment environment.' Repurchase agreements Some companies, including Renault and Ford Motor Co., left with repurchase agreements letting them buy back their stakes years later if conditions change. But given Russia's unsteady legal environment, that's tough to count on. The Russian purchasers may try to change the terms, look for more money, or ignore the agreements, said Weafer. 'There's a lot of uncertainty as to how those buyback auctions will be enforced.' But what about the oil and gas? Multinational oil companies were among those who suffered losses leaving Russia, so it's an open question whether they would want to try again even given Russia's vast oil and gas reserves. US.. major ExxonMobil saw its stake in the Sakhalin oil project unilaterally terminated and wrote off $3.4 billion. Russia's major oil companies have less need of foreign partners than they did in the immediate post-Soviet era, though smaller oil field services might want to return given the size of Russia's oil industry. But they would have to face new requirements on establishing local presence and investment, Weafer said. Some never left According to the Kyiv School of Economics, 2,329 foreign companies are still doing business in Russia, many from China or other countries that aren't allied with Ukraine, while 1,344 are in the process of leaving and 494 have exited completely. The Yale School of Management's Chief Executive Leadership Institute lists some two dozen U.S. companies still doing business in Russia, while some 100 more have cut back by halting new investments. EU sanctions could remain even if US open U.S. sanctions are considered the toughest, because they carry the threat of being cut off from the U.S. banking and financial system. But the EU is still slapping new rounds of sanctions on Russia. Even if U.S. sanctions are dropped, EU sanctions would continue to present compliance headaches for any company that also wants to do business in Europe.
Globe and Mail
17 hours ago
- Business
- Globe and Mail
Trump and Putin hint at US-Russia trade revival, but business environment remains hostile
Hundreds of foreign companies left Russia after the 2022 invasion of Ukraine, including major U.S. firms like Coca-Cola, Nike, Starbucks, ExxonMobil and Ford Motor Co. But after more than three years of war, President Donald Trump has held out the prospect of restoring U.S.-Russia trade if there's ever a peace settlement. And Russian President Vladimir Putin has said foreign companies could come back under some circumstances. 'Russia wants to do largescale TRADE with the United States when this catastrophic 'bloodbath' is over, and I agree,' Trump said in a statement after a phone call with Putin. 'There is a tremendous opportunity for Russia to create massive amounts of jobs and wealth. Its potential is UNLIMITED.' The president then shifted his tone toward Putin after heavy drone and missile attacks on Kyiv, saying Putin 'has gone absolutely crazy' and threatening new sanctions. That and recent comments from Putin warning Western companies against reclaiming their former stakes seemed to reflect reality more accurately — that it's not going to be a smooth process for businesses going back into Russia. That's because Russia's business environment has massively changed since 2022. And not in ways that favor foreign companies. And with Putin escalating attacks and holding on to territory demands Ukraine likely isn't going to accept, a peace deal seems distant indeed. Here are factors that could deter U.S. companies from ever going back: Risk of losing it all Russian law classifies Ukraine's allies as 'unfriendly states' and imposes severe restrictions on businesses from more than 50 countries. Those include limits on withdrawing money and equipment as well as allowing the Russian government to take control of companies deemed important. Foreign owners' votes on boards of directors can be legally disregarded. Companies that left were required to sell their businesses for 50% or less of their assessed worth, or simply wrote them off while Kremlin-friendly business groups snapped up their assets on the cheap. Under a 2023 presidential decree the Russian government took control of Finnish energy company Fortum, German power company Unipro, France's dairy company Danone and Danish brewer Carlsberg. Even if a peace deal removed the U.S. from the list of unfriendlies, and if the massive Western sanctions restricting business in Russia were dropped, the track record of losses would remain vivid. And there's little sign any of that is going to happen. While the Russian government has talked in general about companies coming back, 'there's no specific evidence of any one company saying that they are ready to come back,' said Chris Weafer, CEO of Macro-Advisory Ltd. consultancy. 'It's all at the political narrative level.' Russia's actions and legal changes have left 'long-lasting damage' to its business environment, says Elina Ribakova, non-resident senior fellow at the Bruegel research institute in Brussels. She said a return of U.S. businesses is 'not very likely.' 'We need to strangle them' In a meeting at the Kremlin on May 26 to mark Russian Entrepreneurs Day, Putin said that Russia needed to throttle large tech firms such as Zoom and Microsoft, which had restricted their services in Russia after Moscow's invasion of Ukraine, so that domestic tech companies could thrive instead. 'We need to strangle them,' Putin said. 'After all, they are trying to strangle us: we need to reciprocate. We didn't kick anyone out; we didn't interfere with anyone. We provided the most favorable conditions possible for their work here, in our market, and they are trying to strangle us.' He reassured a representative from Vkusno-i Tochka (Tasty-period) — the Russian-owned company that took over McDonald's restaurants in the country — that Moscow would aid them if the U.S. fast food giant tried to buy back its former stores. Asked for comment, McDonald's referred to their 2022 statement that 'ownership of the business in Russia is no longer tenable.' Not much upside On top of Russia's difficult business environment, the economy is likely to stagnate due to lack of investment in sectors other than the military, economists say. 'Russia has one of the lowest projected long-term growth rates and one of the highest levels of country risk in the world,' says Heli Simola, senior economist at the Bank of Finland in a blog post. 'Only Belarus offers an equally lousy combination of growth and risk.' Most of the opportunity to make money is related to military production, and it's unlikely U.S. companies would work with the Russian military-industrial complex, said Ribakova. 'It's not clear where exactly one could plug in and expect outsize returns that would compensate for this negative investment environment.' Repurchase agreements Some companies, including Renault and Ford Motor Co., left with repurchase agreements letting them buy back their stakes years later if conditions change. But given Russia's unsteady legal environment, that's tough to count on. The Russian purchasers may try to change the terms, look for more money, or ignore the agreements, said Weafer. 'There's a lot of uncertainty as to how those buyback auctions will be enforced.' But what about the oil and gas? Multinational oil companies were among those who suffered losses leaving Russia, so it's an open question whether they would want to try again even given Russia's vast oil and gas reserves. US.. major ExxonMobil saw its stake in the Sakhalin oil project unilaterally terminated and wrote off $3.4 billion. Russia's major oil companies have less need of foreign partners than they did in the immediate post-Soviet era, though smaller oil field services might want to return given the size of Russia's oil industry. But they would have to face new requirements on establishing local presence and investment, Weafer said. Some never left According to the Kyiv School of Economics, 2,329 foreign companies are still doing business in Russia, many from China or other countries that aren't allied with Ukraine, while 1,344 are in the process of leaving and 494 have exited completely. The Yale School of Management's Chief Executive Leadership Institute lists some two dozen U.S. companies still doing business in Russia, while some 100 more have cut back by halting new investments. EU sanctions could remain even if US open U.S. sanctions are considered the toughest, because they carry the threat of being cut off from the U.S. banking and financial system. But the EU is still slapping new rounds of sanctions on Russia. Even if U.S. sanctions are dropped, EU sanctions would continue to present compliance headaches for any company that also wants to do business in Europe.
