Russia

A painful push by businesses to cut their natural-gas use is bringing Europe closer to its goal of weaning itself off Russian energy. Getting consumers to follow suit might prove more difficult, the Wall Street Journal reported. Businesses, facing skyrocketing prices during a widening economic conflict running in parallel with Russia’s invasion of Ukraine, have ratcheted down their gas use in recent months. The reduction has exacted a significant economic cost, with slowing production at chemical plants and closed metals factories now widely expected to tip Europe into a recession.

A Moscow court on Monday accepted a bankruptcy application by Google's Russian subsidiary and started initial bankruptcy proceedings, placing the company under supervision, Russian news agencies reported, according to Reuters. Alphabet Inc.'s Russian unit filed for bankruptcy this summer after authorities seized its bank account, making it impossible to pay staff and vendors. Free services, including search and YouTube, have continued operating. Read more.

Investors placed orders for over $1 billion of Russian bonds as part of a long-anticipated credit-default swap auction on Monday, more than three months after the Kremlin was ruled in default for failing to pay back creditors, WSJ Pro Bankruptcy reported. The high demand for Russia’s sovereign bonds reflects growing investor appetite for its bonds despite punishing sanctions on the Kremlin. While U.S. investors were forbidden from purchasing Russian debt this summer, the U.S.

A Swiss court has granted the operating company for the never-opened Nord Stream 2 pipeline, which was built to bring Russian gas to Germany but put on ice shortly before Russia invaded Ukraine, a four-month extension to its “stay of bankruptcy,” the Associated Press reported. The stay for Nord Stream 2 AG was extended from Sept. 10 through Jan. 10 by a regional court in Zug canton (state), according to a notice published Thursday in the Swiss Official Gazette of Commerce. The company, a subsidiary of Russia’s Gazprom, is based in Zug.

Power prices surged, European currencies hit multidecade lows and governments scrambled to contain the economic hit after Russia cut its main natural-gas pipeline to Europe, the Wall Street Journal reported. The cutoff, which the Kremlin blamed Monday on Western sanctions and said would be long-lasting, realizes the worst-case scenario Europe had been girding for since Russia invaded Ukraine in February. Europe is at the front lines of the economic war between Russia and the West that runs parallel to the battlefield war in Ukraine.

Russian sovereign bonds have staged a comeback this summer as investment banks have warmed up to trading the Kremlin’s debt again and investors outside the grip of Western sanctions on Moscow are buying bonds, WSJ Pro Bankruptcy reported. The run-up in prices reflects how Russia has maintained investor confidence in some pockets of the world and appears to be managing its economy amid the war with Ukraine.

Russia's economy shrank by 4.3% in July year on year after contracting by 4.9% in June, the economy ministry said on Wednesday, Reuters reported. In January through July, the economy shrank by 1.1% in year-on-year terms, the ministry said. First Deputy Prime Minister Andrei Belousov said on Monday that Russia's economy will shrink by less than 3% in 2022, a much shallower contraction than initially expected, while inflation will be below earlier projections. Read more.

Russia is set to shut its key Nord Stream natural-gas pipeline Wednesday for maintenance, leaving Europe guessing again about whether supplies will restart, as temperatures fall and demand for the fuel grows, the Wall Street Journal reported. Whatever the outcome, European officials and energy executives say the continent faces years of high energy prices and possible shortages as efforts to replace Russian imports clash with limited supplies elsewhere and regulations that discourage hydrocarbon usage.

Russia's economy has avoided the meltdown many predicted after Moscow sent its forces into Ukraine six months ago, with higher prices for its oil exports cushioning the impact of Western sanctions, but hardships are emerging for some Russians, Bloomberg News reported. After predicting at one point that the economy would shrink more than 12% this year, exceeding the falls in output seen after the Soviet Union collapsed and during the 1998 financial crisis, the economy ministry now expects a 4.2% contraction.

The Moscow Exchange will ban the use of dollars as collateral to underwrite transactions, it said on Monday, as Russia seeks to cut dependence on currencies of nations that have imposed sanctions on it, Reuters reported. A statement posted on the exchange's website said the new policy would come into effect on Aug. 29. It gave no details. Earlier this month the exchange - the country's largest bourse - said it would limit the use of dollars as collateral to 25% from 50%.