Russia lashed out at the U.S. Again Monday, predicting a long period of cold relations and saying that Moscow won’t agree to any conditions for the lifting of sanctions on it.
The comments by Foreign Minister Sergey Lavrov in a speech at a foreign policy institute in Moscow Monday, come after a bruising verbal encounter between President Vladimir Putin and European leaders in Milan last week, which failed to yield any material progress in ending the conflict in Ukraine.
“This period now affecting our relations will be a long one,” Interfax reported Lavrov as saying Monday, putting the blame for the deterioration of relations squarely on the U.S.’s refusal to accept the rise of other powers after two decades of the post-Cold War ‘Washington Consensus’.
The E.U.’s decision to fall in with U.S. Policy on Ukraine and join it in applying sanctions has angered Moscow, which had counted on the importance of their bilateral trade relations–especially in energy–to protect it. Instead the E.U., like the U.S., has banned Russia’s largest banks from its capital markets and limited sales of high-tech goods to its crucial oil sector.
Europe’s de facto leader, German Chancellor Angela Merkel, had told the Bundestag before meeting with Putin Thursday and Friday that she wanted Russia to withdraw its troops from Ukraine, allow independent monitoring of the Russia-Ukraine border, and support free regional elections in the disputed provinces of eastern Ukraine under Ukrainian law.
“We won’t agree to any criteria and conditions of the sort,” Lavrov told the NTV channel Sunday, saying that Russia was already doing more to end the crisis than anyone else.
“We can find a way out of the present crisis and will help our Ukrainian brothers agree on how to restructure their country,” Lavrov said, in a reference to Moscow’s support for the “federalization” of Ukraine. The two regions partially held by pro-Russian rebels, Donetsk and Luhansk, have said declared independence and won’t accept anything less.
For all the defiance, pressure on the Russian economy is slowly mounting under the combined influence of sanctions and, more importantly in the short term, the sharp drop in the price of oil, its main export. On Friday, Moody’s Investor Service cut the country’s long-term debt rating to Baa2, only two grades above junk status, with a negative outlook.
The ruble has weakened to a series of all-time lows against the dollar, despite the central bank softening the decline with billions of dollars of foreign exchange interventions.
At the weekend, Russia agreed to a temporary compromise–proposed by the E.U.–on resuming gas supplies to Ukraine at a price 20% below what it had previously asked for. OAO Gazprom had stopped supplying it in May citing unpaid bills of $5 billion for past deliveries.
The deal should avert the risk of a shutdown in crucial supplies to some E.U. Countries this winter, but it’s unclear how Ukraine will pay for the deliveries. The country is on the verge of bankruptcy after the annexation of Crimea and the war in the east wrecked its economy. Industrial production in September was down 16.6% from a year ago due to collapsing output in Donetsk and Luhansk.