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. Last Updated: 07/27/2016

Lavrov Looking for Return to Normalcy

Foreign Minister Sergei Lavrov said Friday that Russia hoped to restore normal relations with Britain following tit-for-tat expulsions of diplomats last week, but business leaders said commercial ties could suffer.

Norway's armed forces, meanwhile, expressed concern over Russian bomber sorties over the North Sea.

"Russia is interested in having relations with Britain brought back to normal," Lavrov said during a visit to Berlin. "We proceed from the assumption that they should be based on respect for each other's interests and common sense. We are prepared for this."

But a major business lobby warned British companies that they might have to fight harder for business in Moscow after the strain in relations and Russian firms could steer clear of London.

Lavrov denied that Moscow had ceased contact with Britain in the fight against terrorism as a reprisal for the expulsion of four Russian diplomats. He said it was Britain that had stopped cooperating with the Federal Security Service, which leads Russia's anti-terrorism efforts.

Russia expelled four British diplomats Thursday as the dispute escalated over Moscow's refusal to extradite Andrei Lugovoi, suspected of killing former security services officer Alexander Litvinenko in London in November.

"What we did yesterday only follows the situation created by our British colleagues," Lavrov said Friday.

The Russian Union of Industrialists and Entrepreneurs warned that British firms will lose favor with Moscow, while Russian firms may snub the London Stock Exchange .

"Perhaps, under broadly equal conditions, some [British] companies may fail to win tenders," Alexander Shokhin, head of the powerful business lobby group, RIA-Novosti reported.

"If events develop in this way, Britain's trading floors -- traditionally favored by Russian companies, including state-run companies -- will start losing ground," he said.

Russian companies prefer London to the New York Stock Exchange because British listing rules are less stringent.

Private and state-owned companies have raised billions of dollars in loans, bonds and share listings in recent years in London.

Market analysts say turnovers of this volume would be impossible in continental Europe, where stock exchanges are much smaller.

Russian firms raised $15.7 billion in the LSE in the first half of this year, accounting for 77 percent of the LSE's initial public offering business, according to London-based data firm Dealogic.

A banking source in Moscow said that a benchmark dollar-denominated bond by gas monopoly Gazprom could be postponed, but added that at the moment the signals were it would go ahead.

On Thursday, two Russian Tu-95 bombers made unusually long sorties over the North Sea, forcing NATO members Norway and Britain to scramble fighter jets to follow them, Norway's armed forces said.

"It's a long time since [Russian bombers] have been that far south. I would say that is rather unusual," said John Inge Oegland, spokesman for Norway's armed forces.

The incident was the latest of several sorties at the end of last week. The Air Force commander said these were training flights for the long-range bombers.