David Ignatius
By David Ignatius
A good summary of market expectations was a Bloomberg News story featured at the website of Russia Today, described by U.S. intelligence as a Kremlin propaganda outlet, which published a jubilant Dec. 21 story noting Bloomberg’s poll and predicting: “Donald Trump’s election is expected to bring fundamental changes in U.S. foreign policy.”
Among the biggest cheerleaders for a Trump move to end sanctions were the chief executives of Sberbank and VTB Group, two big Moscow banks partly owned by the Russian government. Both have been targets of U.S. sanctions, squeezing their ability to borrow or move money in the West.
“I think Mr. Trump should remove sanctions against the four leading Russian banks,” said Andrey Kostin, VTB’s chief, in a Jan. 19 story published by RT. “It would be very helpful. [The sanctions] didn’t kill us … but of course that very much made our future not as bright as we expected,” he explained. VTB surfaced in the so-called “Panama Papers” as an alleged money-laundering tool for Putin, a charge the bank denies.
“Trump is the president of change,” said Herman Gref, the CEO of Sberbank, in a Dec. 28 interview with the newspaper Vedomosti, “I have met Trump and my impression from the interaction is very positive. I know several people from his team,” said Gref, who has been a close Putin adviser, in a translation of the interview published Dec. 29 by the website Eastern Daily News.
Gref had indeed met Trump, in November 2013, when the mogul was in Moscow for the Miss Universe pageant. Gref invited Trump to a two-hour dinner at the Moscow branch of Nobu restaurant. “There was a good feeling from the meeting. He’s a sensible person … [with] a good attitude toward Russia,” Gref told Bloomberg News in a Dec. 21 story.
Trump apparently felt the same way. Bloomberg quotes his comment about the Moscow dinner to Real Estate Weekly after he returned to New York that month. “The Russian market is attracted to me,” Trump is quoted as saying. “Almost all of the oligarchs were in the room.”
For the Russian banks, it has undoubtedly been disappointing to see Trump back away from any quick easing of sanctions. Sberbank shares sold in Britain, which rose 35 percent from Nov. 4 to Jan. 27, have since fallen 3 percent. VTB’s British shares, which jumped 20 percent on pro-Trump enthusiasm, have slipped 4.5 percent since their January high.
These financial machinations illustrate one little-examined reason why it matters whether former national security adviser Michael Flynn talked to Russian Ambassador Sergey Kislyak about sanctions before the inauguration, or whether anyone from the Trump campaign had contact with Russian officials.
These issues don’t just interest journalists or Trump’s critics in Congress. They move markets. The Trump trade was looking like a winner for Moscow, but now, not so much.
David Ignatius’ email address is davidignatiuswashpost.com.
(c) 2017, Washington Post Writers Group
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