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agreements effectively established a joint venture in all but name. The regulator said it had imposed the maximum penalty it could on Gazprom. It has also fined the company’s European partners some PLN234mn ($62mn), representing 10% of the annual turnover of their subsidiaries involved in Nord Stream 2.
Poland is among the staunchest opponents of Nord Stream 2 and Russian influence in Europe. Polish officials argue that Nord Stream 2 will undermine competition in Poland’s gas market, and also enable Gazprom to divert gas supplies to Europe that currently flow through Poland, robbing Warsaw of billions of dollars in transit revenues. The project would also increase Europe’s dependence on Gazprom for gas, UOKiK argues.
“Such a situation may bring about serious consequences for the economy of Poland and of the EU, in particular by introducing territorial restrictions affecting the delivery of natural gas, and by increasing the prices of gas to end customers, in particular to Polish consumers,” the regulator said. “The high cost of implementing the undertaking may be offset by higher bills paid by Polish recipients of gas, and the negotiating position of ... Gazprom will be strengthened considerably both in relations with Poland and with other EU member states.”
2.6 ​ ​Russian banks and other corporates reduced foreign debt by $11bn in 3Q20
Russian banks and other corporates reduced foreign debt by $11bn in 3Q20 after a similar spike in 2Q20. The swings here could be technical, but the 3Q20 drop confirms that the private capital outflow unrelated to foreign debt seems to have stabilised. This is a promising future sign for the balance of payments.
Corporate foreign debt reversed its previous gains, suggesting technical nature of recent flows The recently released foreign debt statistics for 3Q20 provide additional colour to the broader balance of payments we covered earlier.
Nominal corporate foreign debt (of banks and non-financial companies) dropped by $17bn in 3Q20 to $388bn as of the end of 3Q20. However, as up to 45% of the corporate debt is denominated in € and RUB, a significant portion of the 3Q20 nominal growth reflects paper decline due to the quarterly depreciation of $RUB from 70.4 to 78.8, partially mitigated by the appreciation of EUR$ from $1.12 to $1.17. Adjusted for this effect, the actual decline in corporate foreign debt was around $11bn, in our estimates.
This $11bn decline mirrors the similar increase for 2Q20, which we now estimate at $10bn (higher than our initial $7bn assessment) following a CBR update on the foreign debt currency structure. The swings in foreign debt between 2Q and 3Q seem to be in line with seasonality, but the size of the quarterly moves appears quite large. Remember, corporate foreign debt has remained stable since 2019 after the sanction-driven net redemption we saw in 2014-18.
13 ​RUSSIA Country Report​ November 2020 www.intellinews.com