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Russia 110712Basic Political DevelopmentsItar-Tass news digest for Tuesday, July 12. MOSCOW — Divers have reached a children’s room at the lower hold of the sunken Bulgaria cruise ship, where they expect to find from 30 to 40 children, head of the Volga regional emergencies centre Igor Panshin told Itar-Tass on Tuesday. The children were said to have been gathered there to play. MOSCOW — Divers have examined three decks of the sunken cruise ship Bulgaria that went down on the Volga River on Sunday, July 10, a spokesman for Russia’s Emergencies Ministry told Itar-Tass on Tuesday. Now divers are searching through the ship’s lower hold. “As many as 30 divers worked all through the night. They made 56 dives and are now through with the examination of the ship’s main deck. KUIBYSHEVSKY ZATON, Tatarstan — Divers have recovered the dead bodies of the captain of the sunken MS Bulgaria and his wife, a spokesman for the headquarters of the search-and-rescue operation told Itar-Tass on Tuesday. According to the spokesman, divers examined the ship’s main deck overnight and now are inspecting the lower hold. As of now, a total of 58 bodies have been recovered from the sunken vessel. MOSCOW — A total of 66 dead bodies, including ten children, have been lifted from the sunken cruise ship Bulgaria that went down on the Volga River on Sunday, July 10, head of the Volga regional emergencies centre Igor Panshin told Itar-Tass on Tuesday. The data are as of 10:00 a.m. Moscow time, he added. In his words, the rescue operations involve 76 divers. Automated devices are also used to examine the sunken ship. BISHKEK — Kyrgyzstan’s President Roza Otunbayeva presented on Tuesday her condolences to Dmitry Medvedev over the wreck of the Bulgaria boat. “I was very sorry to learn the news about the Bulgaria boat, which sank on July 10 in the Kuibyshev pool of the Volga River, and where over a hundred were killed,” her telegram reads. “On behalf of the people of the Republic of Kyrgyzstan and of myself please let families and friends of the victims know that we condole with them.” MOSCOW — Suspected organiser of the mass clash in the Sagra Village of the Sverdlovsk Region is detained, spokesman of Russia’s Investigative Committee Vladimir Markin told Itar-Tass on Tuesday. “Investigators have detained a local, who is known as Krasnoperov /Sergei the Gypsy/, who is suspected of having organised the mass conflict in the Sagra Village,” he said. BRUSSELS — Russia and the EU are rounding off agreement of a list of joint steps to turn to a visa-free regime. The final round of talks on this document will be held in Brussels by director of the European cooperation department of the Russian Foreign Ministry Vladimir Voronkov and director of the European Commission general directorate for home affairs Stefano Manservisi. This document “will be officially approved by the coming Russia-EU summit late this year, Itar-Tass learnt at the European Commission press service. MOSCOW — A shell-less explosive device went off in the official of a deputy head of Moscow’s northwestern district administration of the Russian Investigations Committee, a source in Moscow police told Itar-Tass on Tuesday. According to earlier reports, the blast occurred near the building of the prosecutor’s office in Moscow’s northwetsren at Zhivopisnaya Street 42. This building houses the district investigations administration as well. No victims have been reported so far. MOSCOW — Criminal proceeding have been initiated over the blast that occurred in the office of a deputy head of Moscow’s northwestern district administration of the Russian Investigations Committee, a spokesman for the Russian Investigations Committee told Itar-Tass on Tuesday. According to Vladimir Markin, the criminal case was opened on charges of hooliganism and illegal possession of explosives. AHGABAT — Turkmenistan’s President Gurbanguly Berdymukhamedov and St. Petersburg’s Governor Valentina Matviyenko participated on Tuesday in an opening of two flyovers at the Turkmenbashi-Avaza highway, which connects the airport of the Caspian port with the national tourist zone. The flyover bridges of 1,300 and 1,400 metres cost 121 million dollars. They were built by St. Petersburg’s Vozrozhdeniye Company. MOSCOW — Moscow’s investigative department of the Russian Investigative Committee is probing into the attempt to set on fire a synagogue in the Otradnoye District. “Investigators check all circumstances of the incident and recordings from cameras,” a source in the department said. On Tuesday night, two unidentified persons threw four bottles with combustible liquid into the building of the synagogue of the Darkei Shalom religious community. GORNO-ALTAISK — Four persons are still missing after a Volga hydrofoil accident on Teletskoye Lake in Russia’s republic of Altai on Monday, a spokesman for the local small vessels inspection told Itar-Tass on Tuesday. According to the spokesman, the accident took place late on Monday when the hydrofoil, which was making a pleasure voyage, overturned and sank some 30 kilometers off the settlement of Artybash. There were 13 persons onboard the vessel, nine were taken by nearby motor boats. GORNO-ALTAISK— Search and rescue operations for the four missing in a hydrofoil wreck on Teletskoye Lake in Russia’s republic of Altai have been suspended over bad weather conditions, a spokesman for the republican emergencies administration told Itar-Tass on Tuesday. According to the spokesman, strong wind has caused two-meter-high waves, which hinder rescue operations. NOVOSIBIRSK — Criminal proceeding have been initiated over an accident with a Volga hydrofoil on Teletskoye Lake in Russia’s Republic of Altai, in which four persons were missing, a spokeswoman for the West Siberian transport prosecution office told Itar-Tass. According to the spokeswoman, the criminal case was opened on charges of violations of safety rules. Itar-Tass news outlook for Tuesday, July 12. MOSCOW – On Tuesday, Russia mourns for the people drowned on the cruise ship Bulgaria that sank on the Volga River in Tatarstan on July 10. As many as 79 out of 200 people, which were onboard the ship, have survived. MOSCOW – Divers have examined three decks and now are examining the lower hold of the sunken cruise ship Bulgaria. MOSCOW – Leaders of the four parties represented in the lower house of Russian parliament will by tradition meet with President Dmitry Medvedev to discuss election campaign themes. MOSCOW – Prime Ministers Mikhail Myasnikovich of Belarus, Karim Masimov of Kazakhstan, and Vladimir Putin of Russia will take part in the conference entitled “From the Customs Union to the Common Economic Space: Business Interests” organized in the framework of the Russian-Belarussian-Kazakh business dialogue. BRUSSELS – Talks on the list of joint step to abolish visas between Russia and the European Union will be held in Brussels by director of the European cooperation department of the Russian Foreign Ministry Vladimir Voronkov and director of the European Commission general directorate for home affairs Stefano Manservisi. CENEVA - Swiss President Micheline Calmy-Rey begins her two-day visit to Moscow to discuss closer cooperation with Russia in trade, finance, investments and energy. RABAT – Egypt’s Essam Sharaf will make a number of government reshuffles in the context of growing popular unrest over the government policies. TEV AVIV, BEIRUT – Israel and Lebanon are marking the fifth anniversary of The beginning of the latest Israeli-Lebanese war. NEW YORK – U.S. astronauts from the Atlantis shuttle docked to the International Space Station will make a space walk, the only one during Atlantis’ current flight that is to be the last one in its history. LONDON - WikiLeaks founder Julian Assange will begin his appeal against his extradition from Britain to Sweden for questioning over allegations of sexual misconduct. MOSCOW – Patriarch of Moscow and All Russia Kirill will serve a Divine Liturgy in Moscow’s St. Basil’s Cathedral, which marks its 450th anniversady. Black Sea Fleet holds training - The guard missile cruiser “Moscow” and minor anti-sub vessel “Povorino” held anti-air training exercises. They shot down twomissile targets launched from the Caucasian coast.Black Sea Fleet ships fired anti-aircraft missilesCustoms Union countries to sign 30 documents before year ends - At the same time, the Customs Union partners, as she said, face an objective “to organise institutional architecture of our integration union.” Nowadays, the Customs Union is regulated by three above-national bodies – the EurAsEC intergovernmental council, the Customs Union Commission and the EurAsEC Court. Business and government experts of Belarus, Kazakhstan and Russia holding dialogue on future of Customs Union and Common Economic Zone.Belarus’ delegation to attend Customs Union conference. Minister hopeful about economic ties with Russia - Swiss Economics Minister Johann Schneider-Ammann says there is great potential for Switzerland and Russia to further their economic ties.Mideast Quartet urges direct peace talks between Israel, PAU.S., Kremlin Reach Deal to Monitor Adoptions Russian foreign minister arrives in WashingtonSergey Lavrov will discuss the issue of NK conflict in Washington - It's reported the Russian FM will introduce the proposals package recommended to Yerevan and Baku on July 7 and 8.Lavrov Eyes Missile Defense, Not Visas - By Alexandra OdynovaBout's trial to resume - The trial of the alleged Russian arms dealer Viktor Bout will resume, ?despite his lawyers demands that the matter be closed.Russian foreign minister to visit Caracas in August - Russian President Dmitry Medvedev told his Venezuelan counterpart Hugo Chávez that Sergey Lavrov, his foreign minister, will visit Caracas on August 22.Diplomats expect progress on Russia, EU visa-free deal - Vladimir Voronkov, director of the foreign ministry's European Cooperation Department and Russia's chief negotiator on visa-free travel deal with Europe, will meet with European Commission Director General for Home Affairs Stefano Manservisi.Russia, EU to complete list of moves for visa-free regime. Companies Cry Foul at New Russian Visa Center - Companies have argued that the visa center abuses its monopoly status and have called for an open application procedure to find alternative providers to make prices more competitive. SV Tours director Jelena Bodrova said it previously cost 3 to 7 euros for consular fees and travel documents.Pravda: Britain breaks Russian laws and humiliates Russians in visa centerLithuania begins demarcation of water borders with Russia - The Russian-Lithuanian border (Lithuania borders only Russia’s Kaliningrad region) stretches over 294.4 kilometers, of them 253.7 kilometers are land and inland water borders. The border across the Curonian Spit runs across 18. 5 kilometers and across the Baltic Sea – 22.2 kilometers. Lithuania pays for Russian gas more again in May-JuneJapan calls on Russia to ease import curbs - Japan’s Deputy Foreign Minister Shinichi Nishimiya assured on Monday that Japan ensures a regular monitoring and takes all necessary measures to prevent the export of goods from radiation-affected areas. Russia and Armenia confirm interest in building new unit for Mestamor nuclear power plantAshgabat opens two new flyovers - “These bridges, in fact, are uniting Europe and Asia, as the route is of international importance,” Berdymukhamedov said. The thanked the Vozrozhdeniye company for the high quality of the project and expressed confidence that cooperation in transport infrastructures will continue in Ashgabat and in the Akhal Region. Saakashvili speaks to Ekho Mosckvy radio Medvedev to meet with leaders of four parliamentary parties. Transport Ministry may ban An-24 planes on regular flights in 2012. Russia mourns the Bulgaria ship victimsRussia says 128 likely dead in Volga river accidentMedvedev Orders Probe After Cruise AccidentFour persons missing after hydrofoil overturns on Teletskoye Lake in Altai. 21 wildfires reported in Russia’s Far East. Suspected organiser of clashes in Sagra detained - source. Blast occurs at office of Investigations Committee official in Moscow. 5 witnesses interrogated over blast at investigations committee office in Moscow. Police searching for Moscow synagogue arsonists. Arson attempted on synagogue in Moscow Fan held for bringing banana to a football match in SiberiaRussian nationalists given life for 27 racist murdersRussian carrier-rocket launch pushed back until later date - According to the official, just when the Soyuz will take off depends on how quickly the problems found during the preparation of the rocket for launching will be fixed.Surkov: Putin was given to Russia by God RIA Russian Press at a Glance, Tuesday, July 12, 2011ITAR-TASS Russian press review. Too Special A Friendship: Is Germany Questioning Russia's Embrace? - It's no secret Germany has one of Europe's closest relationships with Russia. Berlin is Moscow's largest customer for natural gas and its biggest trading partner in general. The close ties worry those who believe Russia is using its natural resources for political advantage as well as ... By RFE/RL? Kremlin grows concerned with military opposition - By Sergey Konovalov. The Defense Ministry’s personnel policy may be subject to revision in the near future. Rumblings of political activism among Russia's bikers - Alex Chachkevitch, the Moscow TimesMoscow to more than double in sizeWhy is Medvedev Moving the Capital Outside of Moscow? - Vladimir Frolov, Russia ProfileCould Energy Resources Cause Russia to Spark a Naval War in the Caspian? - By Dr. John C.K. DalyNational Economic TrendsRussia Raises Privatization to Six Tln Rubles, Vedomosti SaysThe Privatization Plan: More Ambitious, but Further Away – by Natalia OrlovaFitch reminds that the privatisation of CIS corporates might sometimes trigger negative rating actionsPrime Minister Vladimir Putin meets with economists from the Russian Academy of Sciences – transcriptBusiness, Energy or Environmental regulations or discussionsRosinter Restaurants, Sberbank, Rosneft: Russian Equity PreviewPhosagro narrows range for London IPO – sourcesRosinter ups H1 sales revenues 9.1% TO 4.8 bln rublesAeroflot CEO supports privatizationTMK boosts pipe shipments 16% in H1 to 2.2 mln tonesMMK Has 2nd Turkish Plant MMK: Mr. Putin goes to Magnitogorsk - Prime Minister to launch Mill 2000 at MMK on FridaySUEK and Russian Railways may also develop Tavan Tolgoi coal depositRussian cable deal on horizon - Vedomosti reports that that a meeting of the board of directors at Megafon is scheduled for mid July and that a deal to buy Akado could be wrapped up by the end of this month. Palfinger buys INMAN in RussiaREFILE-UPDATE 1-Melnichenko cuts stake in K+S to less than 10 pctRussian fish harvest up 1.4% since start of yearActivity in the Oil and Gas sector (including regulatory)Russian Energy Ministry Forecasts Growth in Demand for GasolineGas exports to Armenia up 8% in H1 CPC not planning to increase Tengiz-Novorossiysk pipeline expansion budgetRussneft Chief Gutseriev May Buy Mari Refinery, Kommersant SaysTNK-BP Invests 2.3 Billion Roubles in Modernization at Saratov Refinery in H1 2011GazpromGerman EconMin: Gazprom can invest in German firmsRussia's Gazprom in power cooperation talks with France's GDF Suez Germany's RWE Mulls Gazprom as Major Shareholder Nord Stream to counter Japan's gas takeupGazprom could contribute cash to JV with Renova IES Holding could sell gas pipes to Gazprom, Itera 99 Percent of Sakhalin – Khabarovsk – Vladivostok GTS Line Welded------------------------------------------------------------------------------------------Full Text ArticlesBasic Political Developments11:29?12/07/2011ALL NEWSItar-Tass news digest for Tuesday, July 12. Tass 139 MOSCOW — Divers have reached a children’s room at the lower hold of the sunken Bulgaria cruise ship, where they expect to find from 30 to 40 children, head of the Volga regional emergencies centre Igor Panshin told Itar-Tass on Tuesday. The children were said to have been gathered there to play. MOSCOW — Divers have examined three decks of the sunken cruise ship Bulgaria that went down on the Volga River on Sunday, July 10, a spokesman for Russia’s Emergencies Ministry told Itar-Tass on Tuesday. Now divers are searching through the ship’s lower hold. “As many as 30 divers worked all through the night. They made 56 dives and are now through with the examination of the ship’s main deck. KUIBYSHEVSKY ZATON, Tatarstan — Divers have recovered the dead bodies of the captain of the sunken MS Bulgaria and his wife, a spokesman for the headquarters of the search-and-rescue operation told Itar-Tass on Tuesday. According to the spokesman, divers examined the ship’s main deck overnight and now are inspecting the lower hold. As of now, a total of 58 bodies have been recovered from the sunken vessel. MOSCOW — A total of 66 dead bodies, including ten children, have been lifted from the sunken cruise ship Bulgaria that went down on the Volga River on Sunday, July 10, head of the Volga regional emergencies centre Igor Panshin told Itar-Tass on Tuesday. The data are as of 10:00 a.m. Moscow time, he added. In his words, the rescue operations involve 76 divers. Automated devices are also used to examine the sunken ship. BISHKEK — Kyrgyzstan’s President Roza Otunbayeva presented on Tuesday her condolences to Dmitry Medvedev over the wreck of the Bulgaria boat. “I was very sorry to learn the news about the Bulgaria boat, which sank on July 10 in the Kuibyshev pool of the Volga River, and where over a hundred were killed,” her telegram reads. “On behalf of the people of the Republic of Kyrgyzstan and of myself please let families and friends of the victims know that we condole with them.” MOSCOW — Suspected organiser of the mass clash in the Sagra Village of the Sverdlovsk Region is detained, spokesman of Russia’s Investigative Committee Vladimir Markin told Itar-Tass on Tuesday. “Investigators have detained a local, who is known as Krasnoperov /Sergei the Gypsy/, who is suspected of having organised the mass conflict in the Sagra Village,” he said. BRUSSELS — Russia and the EU are rounding off agreement of a list of joint steps to turn to a visa-free regime. The final round of talks on this document will be held in Brussels by director of the European cooperation department of the Russian Foreign Ministry Vladimir Voronkov and director of the European Commission general directorate for home affairs Stefano Manservisi. This document “will be officially approved by the coming Russia-EU summit late this year, Itar-Tass learnt at the European Commission press service. MOSCOW — A shell-less explosive device went off in the official of a deputy head of Moscow’s northwestern district administration of the Russian Investigations Committee, a source in Moscow police told Itar-Tass on Tuesday. According to earlier reports, the blast occurred near the building of the prosecutor’s office in Moscow’s northwetsren at Zhivopisnaya Street 42. This building houses the district investigations administration as well. No victims have been reported so far. MOSCOW — Criminal proceeding have been initiated over the blast that occurred in the office of a deputy head of Moscow’s northwestern district administration of the Russian Investigations Committee, a spokesman for the Russian Investigations Committee told Itar-Tass on Tuesday. According to Vladimir Markin, the criminal case was opened on charges of hooliganism and illegal possession of explosives. AHGABAT — Turkmenistan’s President Gurbanguly Berdymukhamedov and St. Petersburg’s Governor Valentina Matviyenko participated on Tuesday in an opening of two flyovers at the Turkmenbashi-Avaza highway, which connects the airport of the Caspian port with the national tourist zone. The flyover bridges of 1,300 and 1,400 metres cost 121 million dollars. They were built by St. Petersburg’s Vozrozhdeniye Company. MOSCOW — Moscow’s investigative department of the Russian Investigative Committee is probing into the attempt to set on fire a synagogue in the Otradnoye District. “Investigators check all circumstances of the incident and recordings from cameras,” a source in the department said. On Tuesday night, two unidentified persons threw four bottles with combustible liquid into the building of the synagogue of the Darkei Shalom religious community. GORNO-ALTAISK — Four persons are still missing after a Volga hydrofoil accident on Teletskoye Lake in Russia’s republic of Altai on Monday, a spokesman for the local small vessels inspection told Itar-Tass on Tuesday. According to the spokesman, the accident took place late on Monday when the hydrofoil, which was making a pleasure voyage, overturned and sank some 30 kilometers off the settlement of Artybash. There were 13 persons onboard the vessel, nine were taken by nearby motor boats. GORNO-ALTAISK— Search and rescue operations for the four missing in a hydrofoil wreck on Teletskoye Lake in Russia’s republic of Altai have been suspended over bad weather conditions, a spokesman for the republican emergencies administration told Itar-Tass on Tuesday. According to the spokesman, strong wind has caused two-meter-high waves, which hinder rescue operations. NOVOSIBIRSK — Criminal proceeding have been initiated over an accident with a Volga hydrofoil on Teletskoye Lake in Russia’s Republic of Altai, in which four persons were missing, a spokeswoman for the West Siberian transport prosecution office told Itar-Tass. According to the spokeswoman, the criminal case was opened on charges of violations of safety rules. 09:44?12/07/2011ALL NEWSItar-Tass news outlook for Tuesday, July 12. Tass 93 Telephone: 8 (499) 791-00-18 Fax: 8 (499) 791-00-19. SHIP-WRECK MOSCOW – On Tuesday, Russia mourns for the people drowned on the cruise ship Bulgaria that sank on the Volga River in Tatarstan on July 10. As many as 79 out of 200 people, which were onboard the ship, have survived. MOSCOW – Divers have examined three decks and now are examining the lower hold of the sunken cruise ship Bulgaria. PRESIDENT-PARTIES MOSCOW – Leaders of the four parties represented in the lower house of Russian parliament will by tradition meet with President Dmitry Medvedev to discuss election campaign themes. CUSTOMS UNION-CONFERENCE MOSCOW – Prime Ministers Mikhail Myasnikovich of Belarus, Karim Masimov of Kazakhstan, and Vladimir Putin of Russia will take part in the conference entitled “From the Customs Union to the Common Economic Space: Business Interests” organized in the framework of the Russian-Belarussian-Kazakh business dialogue. EU-RUSSIA-VISAS BRUSSELS – Talks on the list of joint step to abolish visas between Russia and the European Union will be held in Brussels by director of the European cooperation department of the Russian Foreign Ministry Vladimir Voronkov and director of the European Commission general directorate for home affairs Stefano Manservisi. SWITZERLAND-RUSSIA CENEVA - Swiss President Micheline Calmy-Rey begins her two-day visit to Moscow to discuss closer cooperation with Russia in trade, finance, investments and energy. EGYPT-GOVERNMENT RABAT – Egypt’s Essam Sharaf will make a number of government reshuffles in the context of growing popular unrest over the government policies. ISRAEL-LEBANON-ANNIVERSARY TEV AVIV, BEIRUT – Israel and Lebanon are marking the fifth anniversary of The beginning of the latest Israeli-Lebanese war. US-SPACE NEW YORK – U.S. astronauts from the Atlantis shuttle docked to the International Space Station will make a space walk, the only one during Atlantis’ current flight that is to be the last one in its history. BRITAIN-ASSANGE LONDON - WikiLeaks founder Julian Assange will begin his appeal against his extradition from Britain to Sweden for questioning over allegations of sexual misconduct. CULTURE AND RELIGION MOSCOW – Patriarch of Moscow and All Russia Kirill will serve a Divine Liturgy in Moscow’s St. Basil’s Cathedral, which marks its 450th anniversady. Black Sea Fleet holds training Black Sea Fleet has held anti-air training exercises, thepress-secretary of the fleet commander, Captain Vyacheslav Trukhachev,told ITAR-TASS.The guard missile cruiser “Moscow” and minor anti-sub vessel“Povorino” held anti-air training exercises. They shot down twomissile targets launched from the Caucasian coast.The “Moscow” is the lead ship of 1164 Project “Atlant”. It carriesS-300F “Rif” and Osa-MA anti-air complexes.TRANSLATED FROM RUSSIAN Sea Fleet ships fired anti-aircraft missilesMOSCOW, July 12. / ITAR-TASS /. Black Sea Fleet ships / BSF / conducted air defense exercises, the press secretary of the BSF Commander, Captain First Class Vyacheslav Trukhachev told Itar-Tass."In one of the training areas, the BSF guard missile cruiser / GRKR / Moscow and the small anti-sub / IPC / Povorino carried out planned firing of anti-aircraft missiles" - he said. They destroyed two target-missiles, launched from the Caucasian coast of the separate coastal missile and artillery brigades BSF.Guards missile cruiser Moskva is the lead ship of Project 1164 / Atlas /. The structure of weapons includes the cruiser launchers S-300F Reef and SAM Osa-MA anti-air complexes.11:56?12/07/2011ALL NEWSCustoms Union countries to sign 30 documents before year ends. Tass 151 MOSCOW, July 12 (Itar-Tass) — Russia, Kazakhstan and Belarus will sign before the current year ends 30 documents to develop the inited econo9mic space, Russia’s Minister of Economic Development Elvira Nabiullina told the Russian-Belarussian-Kazakh business dialogue on Tuesday. “Before the year end we plan to sign about 30 documents to develop the basic agreements, which we have,” she said adding that the documents will be designed “in close cooperation” with businesses. “We welcome your suggestions on harmonisation and unification of the norms /of the Customs Union countries/ in the spheres which need regulation,” Nabiullina said. She explained that the new agreement should unite national agendas with the tasks to achieve harmony and to comply with the WTO norms. At the same time, the Customs Union partners, as she said, face an objective “to organise institutional architecture of our integration union.” Nowadays, the Customs Union is regulated by three above-national bodies – the EurAsEC intergovernmental council, the Customs Union Commission and the EurAsEC Court. Nabiullina said that the Commission had gained a wide range of authorities, and the list will be added – from macro economy to agriculture. “We would like the Customs Union Commission to be a permanent and professional body,” she said. In late 2010, Russia, Kazakhstan and Belarus signed 17 agreements to form the United Economic Space, which will come into force from January of 2012. 12.07.2011 8:35Business and government experts of Belarus, Kazakhstan and Russia holding dialogue on future of Customs Union and Common Economic Zone. conference which is opening in Moscow today is dedicated to the new game rules. The heads of the governments of all three countries will give reports. Pavel Tukhto reports: Working conditions for business are changing right before our eyes. On July 1, the process of forming of a single customs territory, providing the transfer of customs controls to the common border of the three countries - Belarus, Kazakhstan and Russia - finished. Simultaneously, the new stage of integration processes on the creation of a single market for goods, services, capital and manpower of the three countries - within the CEZ or the Eurasian Economic Union started. And of course, the representatives of business circles are interested in participating in the development of the new game rules. The business unions of the three countries: the Confederation of Industrialists and Entrepreneurs of Belarus, the Russian Union of Industrialists and Entrepreneurs and the National Economic Chamber of Belarus established a trilateral business dialogue. It is the organizer of today's conference "From the Customs Union to the Common Economic Zone: Business Interests". The Prime Ministers of the three countries - Miasnikovich, Putin and Masimov - plan to express their opinion on the new rules of the economic activity and perspectives. Of course, they also plan to listen to the business representatives. Two main topics - technical regulation and improvement of customs legislation - are on the agenda. But it is unlikely that the dialogue between business and government will be confined to the stated topics. Russian government officials say that Moscow is making a big bet on the project of the Eurasian Economic Union. (Elvira Nabiullina, Minister of Economic Development of Russia) In its turn business is expressing interest that the norms and standards in the new economic union were unified with the European, to later create a general economic space from Lisbon to Vladivostok. (Alexander Shokhin, Chairman of the Russian Union of Industrialists and Entrepreneurs)02:36?12/07/2011ALL NEWSBelarus’ delegation to attend Customs Union conference. Tass 6 MINSK, July 12 (Itar-Tass) — Belarus’ governmental delegation led by Prime Minister Mikhail Myasnikovich will take part in the international conference “From the Customs Union to the Common Economic Space: Business Interests”, the press service of Belarus’ Council of Ministers that will open in Moscow on Tuesday told Itar-Tass. The conference organized by business unions of Russia, Belarus and Kazakhstan will focus on economic activity rules within the framework of the Customs Union as well as business prospects entailed by the creation of a common economic space. Since the launch of the Customs Union Belarus’ bilateral trade with Kazakhstan and Russia increased by over 20 percent to 29 billion dollars. In January-May Belarus’ trade with its Customs Union partners grew by 47.2 percent to 15 billion dollars as against the same period of 2010. Along with this the three countries’ economic relations experience certain problems. For instance, as a result of the strong financial crisis in Belarus most importers, in fact, forfeited their opportunities to buy foreign currency at the official exchange rate and prices of import goods significantly increased. Jul 11, 2011 - 21:05Minister hopeful about economic ties with Russia Economics Minister Johann Schneider-Ammann says there is great potential for Switzerland and Russia to further their economic ties.Schneider-Ammann was speaking on Monday to Russian captains of industry in Moscow, as part of a four-day visit to the country.The economics minister told the audience that interest from Swiss companies wishing to expand to Russia was growing.?“I'm sure that Switzerland with its modern economic structure, its potential in know-how and innovative high-technology products can be an interesting partner for Russia in the process of realizing its ambitious modernising efforts,” Schneider-Ammann said.?However, Frank Schauff, the director of the Association of European Businesses in the Russian Federation, told Schneider-Ammann and other members of the Swiss delegation that Russia had not yet recovered from the economic crisis.?Analysts expect the Russian economy to grow by around 3.5 per cent over the next few years, with inflation around eight per cent. In 2008, the economy grew by eight per cent.?On Wednesday, Schneider-Ammann will take part in a meeting between this year’s Swiss president, Micheline Calmy-Rey and Russian President Dmitri Medvedev.swissinfo.ch and agenciesMideast Quartet urges direct peace talks between Israel, PA 12/07/2011The Middle East Quartet of negotiators again urged the Israelis and Palestinians to resume direct talks without any preconditions, a high-ranking U.S. official said.Monday's Middle East Quartet meeting focused on ways to resume direct negotiations between Israel and the Palestinian Authority, the official said. The talks came to a halt in September 2010 after Israel refused to extend its 10-month moratorium on settlement construction in the Palestinian territories."The quartet principals have conducted a good meeting over the dinner tonight, characterized the discussion as excellent and substantive," the U.S. official said."The principals are reiterating... that there is urgent need to appeal to the parties to overcome current obstacles and find ways to resume the direct negotiations without preconditions," he added.The statement is contrary to a forecast made by chief Palestinian negotiator Saeb Erekat, who said ahead of the meeting the mediators will not call for the resumption of talks between PA and Israel.The source also said that though serious differences remain between Israelis and Palestinians, they do not make a peace solution impossible. He said the Quartet was ready for any mediation effort in search for a compromise, but both sides of the conflict must make hard decisions and concessions to forge peace.The Palestinians want to form an independent state within the 1967 borders before Israel occupied the West Bank, Gaza Strip and East Jerusalem, while Israel wants Jerusalem to be its "eternal and undivided" capital.The participants of Monday's meeting of the Quartet, comprising the United Nations, the European Union, the U.S. and Russia, decided not to issue statements on the results of their work."The quartet doesn't meet in order to issue statements," the official said. "The quartet meets in order to allow these principals to consult on some very complex and challenging issues, discuss how best to work and push them forward.""And this evening the decision was that we needed to realistically acknowledge the fact that more work needs to be done with the parties on their gaps and in order to allow us to get to the part when we might be able to have a productive public product by the quartet," he added.Quartet Meetings at various levels will continue until the end of the week, the source said.WASHINGTON, July 12 (RIA Novosti)JULY 12, 2011U.S., Kremlin Reach Deal to Monitor Adoptions RICHARD BOUDREAUX MOSCOW—The U.S. and Russia have reached an accord that will subject Americans who adopt Russian children to closer monitoring for signs of abuse or neglect in their homes, potentially removing an irritant in the two countries' relations.The agreement is set to be signed on Wednesday after 15 months of negotiation and sent to Russia's parliament for ratification. Both sides say it will help dispel distrust that has slowed American adoptions in Russia but also could make those adoptions somewhat costlier.More than 50,000 Russian children have been adopted over the past two decades by families in the U.S., more than in any other country, without a bilateral accord regulating the process.Russia had demanded one for years, but Washington agreed to the talks only after Moscow threatened to halt adoptions in response to the plight of a 7-year-old boy who was sent back to Russia alone last year by his adoptive mother in Tennessee, claiming that he had psychological problems with which she couldn't cope.Under the accord, a copy of which was reviewed by The Wall Street Journal, the U.S. State Department will work closely with Russia's Ministry of Education to gather periodic reports on the living conditions and "psychological and physical development" of adopted Russian children and to address any serious problems."We will have clear information, and this will make it easier for us to monitor the welfare of our children," Pavel Astakhov, Russia's children's rights ombudsman, said in an interview.Families are now required by Moscow to undergo four home visits by an American social worker within three years after adopting a Russian child, enabling the adoption agency to report to Moscow on the child's status. Under the agreement, the agency is further held responsible for tracking the child until age 18 and continuing to report any instances of abuse, neglect, termination of the adoption, or adoption by another family.The accord also would bar adoptions facilitated by independent operators to help parents short-circuit the process. Russia would limit participation in the program to those U.S. adoption agencies that comply with a 1993 Hague Convention on intercountry adoptions.Hague requirements include rigorous training of parents wanting to adopt foreign children. Most of the roughly 30 U.S. agencies licensed in Russia already meet those standards, adoption advocates say.U.S. officials welcomed the agreement but declined to discuss details ahead of its expected signing in Washington by Secretary of State Hillary Clinton and her Russian counterpart, Sergei Lavrov.Russian officials and American adoption advocates say the Cabinet-level oversight, strict licensing and prolonged reporting requirements would help detect troubled U.S. adoptions that have recently caused scandals in Russia. In one such case, a Georgia woman, Marta Blanford, adopted a Russian girl in 2001 but gave up her parental rights in 2009. The child was then adopted by the woman's sister and her husband, Michael Grismore. He was indicted last July on five counts involving the beating and sexual abuse of the child, and is awaiting trial in Cherokee County, Georgia.Had Russian officials been informed of the second adoption, Mr. Astakhov said, they could have objected, or at least requested home-study reports on her new family. The U.S.-Russia accord requires such notification "in a reasonable time" and Russia's consent for any readoption.The reporting requirements spelled out in the accord could lead to more detailed contracts between American agencies and adoptive families, involving marginally higher fees, adoption specialists say."What the Russians are saying is, 'We can ask you anytime about the child and you need to know where that child might be,' " said Larisa Mason, a board member of the Virginia-based National Council for Adoption, an adoption advocacy group. "There will be more responsibility on the agencies to be involved with the parents."She and other advocates said the agreement should reassure Russian governors and judges, who have been reluctant to approve adoptions in some regions since the Tennessee case last year, as well as American families who then hesitated to seek children in Russia. American adoptions in Russia declined last year to 1,079, from 1,586 in 2009."Instead of two countries addressing child protection issues independently, this agreement brings them together to ensure that children's best interests are served," said Tom DiFilipo, president of the Virginia-based Joint Council on International Children's Services, another advocacy group. "As a result, we believe there will be fewer incidents of abuse or neglect." —Shalini Ramachandran in Atlanta contributed to this article.Write to Richard Boudreaux at richard.boudreaux@ Russian foreign minister arrives in Washington 12/07/2011WASHINGTON, July 12 (RIA Novosti)Russian Foreign Minister Sergei Lavrov arrived in Washington early on Tuesday for talks with U.S. President Barack Obama and a meeting of the Middle East Quartet, a Russian embassy spokesman said.During his visit Lavrov will also meet with U.S. Secretary of State Hillary Clinton to discuss Obama's visit to Moscow due this fall.The Russian and U.S. top diplomats will also discuss European missile defense, visa issues and a bilateral adoption agreement.In his interview to the Rossiya24 channel shortly before departure, Lavrov said he would seek explanations for Washington's refusal to provide legally binding guarantees that the U.S. missile shield in Europe is not directed against Russia.The Russian Foreign Minister will also attend a meeting of the Middle East Quartet of negotiators, comprising Russia, the United Nations, the European Union and the United States.Lavrov will meet with his partners in the talks - Clinton, EU foreign policy chief Catherine Ashton and UN Secretary General Ban Ki-moon during a working dinner later in the day.The agenda of the talks will include the dispute between rival Palestinian factions of Fatah and Hamas over the formation of the unity government for the Palestinians and the resumption of direct peace talks between Israelis and Palestinians.14:56 11/07/2011 ? PoliticsSergey Lavrov will discuss the issue of NK conflict in Washington Foreign Minister Sergey Lavrov is paying three-day working visit to US, “finam.fm” radio station reports. According to the source, Lavrov is intended to discuss the issue of Nagorno-Karabakh conflict with the US administration.It's reported the Russian FM will introduce the proposals package recommended to Yerevan and Baku on July 7 and 8.Russian FM has posted on his Twitter blog that President Medvedev's message signals “it's high time to come to an agreement.”Lavrov Eyes Missile Defense, Not Visas July 2011By Alexandra OdynovaWhile a?U.S. diplomat has called agreements on?visa rules and?child adoptions the?highlight of?U.S.-Russian talks in?Washington, Foreign Minister Sergei Lavrov said the?"key issue" would be the?U.S. missile defense system.Lavrov arrived in?the United States on?Monday, and?his three days of?talks starting Tuesday are to?include the?signing of?the agreements with Secretary of?State Hillary Clinton and?a meeting with U.S. President Barack Obama, who is to?travel to?Russia later this year."The political meaning of?the situation around the?missile defense system — of?either a?positive or negative outcome — will, of?course, be discussed during my trip to?Washington," Lavrov told Rossiiskaya Gazeta in?an interview published Monday.The United States says it wants to?install elements of?the missile defense system in?Europe to?intercept threats from?Iran. Russia has objected to?the planned system and?offered an?alternative in?which it would participate.U.S. Ambassador John Beyrle said last week that an?Obama-initiated "reset" in?ties with Russia would reach a?new high with Lavrov's and?Clinton's signing of?a deal on?child adoptions and?to introduce three-year multiple-entry visas for?businesspeople and?tourists, as well as eliminating the?need to?secure visa invitations for?residents of?both countries."We can talk about a?lot that we have got done together over?the last three years … but for?me, the?best is really still yet to?come next week when I go to?Washington for?the signing," Beyrle said July 4.The date for?the visa signing is not set. Lavrov said Thursday that the?deal was being finalized.Under the?adoption agreement, adoptive parents will pass psychological testing, adoptions will be handled only by?accredited agencies, and?children will be considered Russian citizens until they turn 18, Lavrov said in?an earlier interview with Rossia-24 television. The?agreement will also require U.S. authorities to?monitor adoptive parents to?prevent child abuse.Adoptions were effectively halted by?Russia last year after a?U.S. adoptive mother sent her 7-year-old son back to?Russia unaccompanied on?a plane.Lavrov told Rossiiskaya Gazeta that in?Washington he would also discuss Russia's hopes to?enter the?World Trade Organization this year, unrest in?North Africa, and?the creation of?a wildlife reserve on?both sides of?the Bering Strait separating Russia and?Alaska.His trip was to?kick off late Monday with a?meeting of?the Middle East "Quartet" to?discuss the?Israeli-Palestinian peace process. The?Quartet comprises the?European Union, Russia, the?United Nations and?the United States.No breakthroughs were expected because the?mediators were to?only "compare notes about where we are and?plot a?course forward," State Department spokeswoman Victoria Nuland told reporters Friday in?Washington, according to?a transcript on?the State Department's web site.Bout's trial to resume 12, 2011 10:09 Moscow TimeThe trial of the alleged Russian arms dealer Viktor Bout will resume, ?despite his lawyers demands that the matter be closed.In May Bout’s? defense attorney? asked the presiding judge to lift the charges brought against his client, arguing that the US government had no authority to consider criminal acts committed outside US territory.?Viktor?Bout?was arrested in 2008 in Thailand after a sting operation masterminded by the US Drug Enforcement Agency.Federal agents said they caught him offering to supply weapons to people he believed were Columbian FARC rebels.President Medvedev talked to Chávez over the phone Russian foreign minister to visit Caracas in August President Dmitry Medvedev told his Venezuelan counterpart Hugo Chávez that Sergey Lavrov, his foreign minister, will visit Caracas on August 22. Medvedev congratulated President Chávez and the Venezuelan people for the bicentennial of Venezuelan independence Diplomacy Sergey Lavrov, Russia's Foreign Minister, will visit Caracas in order to organize the next meeting of the High-Level Intergovernmental Commission that assesses strategic cooperation between the two countries. Russian President Dmitry Medvedev told his Venezuelan counterpart Hugo Chávez that his foreign minister will visit Caracas on August 22, said state-run news agency Agencia Venezolana de Noticias (AVN), citing a statement from the Venezuelan government. Chávez and his Russian counterpart talked by phone, as stated in the text cited by AVN. Medvedev expressed his solidarity with Chávez about his health condition. He also congratulated President Chávez and the Venezuelan people for the bicentennial of Venezuelan independence.Diplomats expect progress on Russia, EU visa-free deal 12/07/2011BRUSSELS, July 12 (RIA Novosti)At their meeting on Tuesday, top Russian and European negotiators on bilateral visa-free travel agreements may finish the list of joint measures needed to mutually scrap visas.Vladimir Voronkov, director of the foreign ministry's European Cooperation Department and Russia's chief negotiator on visa-free travel deal with Europe, will meet with European Commission Director General for Home Affairs Stefano Manservisi."Today it might be announced that we finished work to edit this document, which paves the way to a visa-free regime," a source in the Russian embassy in the EU said.He said the document could be approved either at the Russia-EU summit in Brussels late this year, or at a meeting of the standing Russia-EU partnership council at the level of justice and interior ministers, due in October.President Dmitry Medvedev said in mid-June the stage-by-stage plan to lift the visa requirement will be finalized by the end of July.09:10?12/07/2011ALL NEWSRussia, EU to complete list of moves for visa-free regime. Tass 70 BRUSSELS, July 12 (Itar-Tass) — Russia and the EU are rounding off agreement of a list of joint steps to turn to a visa-free regime. The final round of talks on this document will be held in Brussels by director of the European cooperation department of the Russian Foreign Ministry Vladimir Voronkov and director of the European Commission general directorate for home affairs Stefano Manservisi. This document “will be officially approved by the coming Russia-EU summit late this year, Itar-Tass learnt at the European Commission press service. According to a spokesman of the Russian mission to the EU, “work on editing the list’s text is to be completed on Tuesday”. “The document, opening the way to drafting an agreement on a visa-free regime, consists of four sections: protection of documents, including biometric data, migration and border control, countering transborder terrorism and crime, while the last section includes remaining topics, inter alia, interaction with the Council of Europe, human rights, etc.” he explained. The discussion on prospects for introducing a visa-free regime between the EU and Russia has been going on for over a decade. Former chairman of the European Commission Romano Prodi suggested in 2003 that this could happen even in 2008. However, the European side has not fixed real dates for turning to a visa-free regime up to this time. Companies Cry Foul at New Russian Visa Center : 09:54 Tour operators have come up against a stone wall in getting Russia to change rules requiring them to apply for visas through a new system that charges a much larger fee.The new visa center, outsourced to Invisa Fiduciary Services, charges tourists and tour operators 21 euros, but tour operators can only apply for visas through the center, ETV reported. Citizens, on the other hand, can apply directly through the panies have argued that the visa center abuses its monopoly status and have called for an open application procedure to find alternative providers to make prices more competitive. SV Tours director Jelena Bodrova said it previously cost 3 to 7 euros for consular fees and travel documents.The Russian Embassy did not comment. The visa center said in its press release that there are many visa applicants and there was a desire to offer them a higher quality service.?Kristopher RikkenBritain breaks Russian laws and humiliates Russians in visa center The situation with issuing British visas to Russian citizens still remains a tense one. One may not say that the British Embassy is friendly to those Russians who want or need to visit their country. Now the embassy has stopped issuing visas because of technical problems."We are seriously concerned about the fact that because of technical malfunctions in the work of the consulate office of the British Embassy many people experience very big problems. It goes about tens and even hundreds of people, who suffered moral damage because of that," Konstantin Kosachev, the chairman of the State Duma committee for international affairs said."These technical problems occur against the background of the policies of restraint about visas, which the British side has been practicing during the recent years, since the so-called Litvinenko's case," the official added.According to the official, he does not understand, why the British try to connect these two absolutely different issues."From our point of view these two subjects do not relate to each other. Of course, we are interested in solving Litvinenko's case and punishing the guilty, whoever they are. However, it is inadmissible to make other people hostages of this criminal case. They just want to cross borders for educational, cultural, scientific and political interests," Kosachev said.Russian Foreign Minister Sergei Lavrov also said that one should not connect the visa issue with Litvinenko's case. Britain's David Lidington, the Minister of State responsible for European issues and NATO, stated that Britain could resume the talks with Russia about easing the visa regime with Russia only after Russian national Andrey Lugovoy goes on trial in London.Britain accuses Andrei Logovoi, a deputy of the Liberal and Democratic Party of Russia (LDPR), of being involved in the murder of Alexander Litvinenko, a former FSB officer, in 2006.Russian citizens do not see the connection between visas and Mr. Lugovoi either. Now there are technical problems in the British Embassy in Moscow, although British diplomats have not been friendly towards Russian travelers recently. The humiliating problem of the process to receive the visa to England, as well as numerous unfounded refusals to people have made many Russians rethink their plans to visit the UK.Many Russians are particularly concerned about the fact that they have to undergo the process of dactylography. Moreover, people must fill in all the documents only in English. Consulate offices of the majority of all other countries accept questionnaires and other documents written in Russian.It is humiliating indeed that people have to use a foreign language in their homeland. This rule violates the Constitution of Russia and the Federal Law "About the Russian Language." The law says that the only state language on the entire territory of the Russian Federation is Russian (except for the national regions where the language of a title nation is the second state language).The fact that the English language virtually acts as the language of international communication does not give it any preferences at all. English is no different from any other language of the world from the legal point of view. Just try to imagine what would happen if the consulate office of, let's say, China would make Russian travelers fill in visa forms in Chinese.Moreover, when going to the British Consulate for a visa, Russian citizens communicate with the British visa center, not with the consulate office. The British visa center is a Russian legal entity. The Russian law does not allow a Russian legal entity to use a foreign language as the only possible one in written communication with Russian citizens.It just so happens that Great Britain violates Russian laws as it tries to put pressure on Russia just because a Russian citizen offended against the law on the territory of Great Britain. It appears that Britain does not see any problem about it.Dmitry LukinPravda.Ru04:07?12/07/2011ALL NEWSLithuania begins demarcation of water borders with Russia. Tass 381 VILNIUS, July 12 (Itar-Tass) — Lithuania on Tuesday begins demarcation of its water border with Russia, the Baltic state’s border service said. “The border with the Russian Federation remains the only section of Lithuania’s border that has no demarcation signs,” the source said. The first demarcation sign will be installed on Lake Vistytis in the municipality of Vilkaviskis. Lithuania will also demarcate Matlaukis water reservoir, while Russia will do this on the Curonian Spit. According to Lithuania’s border service, this problem is very up-to-date as many fishermen and tourists violate the border that has no demarcation signs. In the near future the Baltic state plans to begin land demarcation with Russia’s westernmost Kaliningrad region. The Russian-Lithuanian border (Lithuania borders only Russia’s Kaliningrad region) stretches over 294.4 kilometers, of them 253.7 kilometers are land and inland water borders. The border across the Curonian Spit runs across 18. 5 kilometers and across the Baltic Sea – 22.2 kilometers. Lithuania pays for Russian gas more again in May-June Vaida, BC, Vilnius, 12.07.2011.Prices of natural gas for Lithuania became more expensive over two past months, rising by 166 litas per a tonne of oil equivalent (toe). The same increase in gas prices was observed over the entire year of 2010. In June 2011, Lithuanian heat supply companies paid for gas 1,648 litas/472.7 euros per toe, including transportation charges. In May, the gas price was lower by 50 litas per toe and stood at 1,598 litas per toe, including transportation charges. In April, gas cost 1,482 litas per toe, writes LETA/ELTA.?In January 2010, heat supply companies paid 1,248 litas per toe for gas, including transportation charges. In December, gas cost 1,414 litas per toe, including the charges.?President of the Lithuanian District Heating Association (LDHA) Vytautas Stasiunas says that there cannot be any more serious signs for our state urging it to declare the re-orientation of the heat economy from Russian gas to Lithuanian biofuel a national priority. "Good wishes are not enough anymore. Government support is necessary for biofuel facilities and attract EU funds," said Stasiunas.?He noted that it was impossible to re-orient the heat industry to biofuel by the efforts and funds of heat companies alone without increasing heating bills. 03:45?12/07/2011ALL NEWSJapan calls on Russia to ease import curbs. Tass 48 NIZHNY NOVGOROD, July 12 (Itar-Tass) — Japan called on Russia to ease import curbs. Japan’s Deputy Foreign Minister Shinichi Nishimiya assured on Monday that Japan ensures a regular monitoring and takes all necessary measures to prevent the export of goods from radiation-affected areas. “Japan, except for some territories, is safe and open for business and tourism,” he told a meeting of the sub-commission for interregional cooperation under the two countries’ commission for trade and economic cooperation. At present, Russia keeps effective the ban on the import of agricultural products and foodstuff from Japan’s six prefectures and on the import of seafood from eight prefectures, which encompasses a total of 242 processing enterprises. Japan’s diplomat asked Russia’s Deputy Regional Development Minister Maxim Travkin to reconsider import restrictions. Shinichi Nishimiya noted that during the summer Japan’s export volumes will be restored. “By the end of July the air link through Shendai Airport, in the city of Shendai, located in Miyagi Prefecture strongly affected by the earthquake will be resumed.” Travkin, in turn, called on Japan’s business to take part in investment projects within the framework of the preparation for the Asia-Pacific Economic Cooperation summit due in Vladivostok in 2012, in particular in the construction of hotels and the Ussuriysk hydro-electric power station. “Japan’s companies have already been participating in the construction of the bridge and electric generator turbines,” he said. According to Russia’s Regional Development Ministry, Japan’s investments into Russia’s economy exceeded 9 billion dollars in the first six months of 2011. Over 87 percent are investments into oil development and refinery, approximately 5 percent – into the manufacturing industry and 4 percent – in trade. Major investments are concentrated in the Moscow region, the Primorsky Territory and St. Petersburg. Participants in the meeting of the sub-commission for interregional cooperation pointed to a spontaneous nature of regional contacts. One of such positive examples is cooperation between Russia’s Nizhny Novgorod region and Japan’s Miyagi Prefecture. Last year they signed an agreement on trade, economic, scientific and cultural cooperation. In 2010 bilateral trade between the Nizhny Novgorod region and Japan totalled 145 million dollars (up by 47 percent). In the first three months of this year it grew three times to 5.6 million dollars as against the same period of last year. Russia and Armenia confirm interest in building new unit for Mestamor nuclear power plant, July 12. / ARKA /. After the thirteenth meeting of the Russian-Armenian intergovernmental commission on economic cooperation Armenia and Russia adopted a protocol confirming their interest in the construction of a new nuclear power unit in Armenia, the Russian ministry of energy said Monday in a statement. The meeting was held on July 8 in Rostov-on-Don, RIA Novosti reported. The Russian co-chairman of the commission is minister of transport Igor Levitin, the Armenian co-chairman is prime minister Tigran Sarkisian."The parties confirm their interest in cooperation on nuclear energy development of the Republic of Armenia, including the construction of a new power unit," the document says. It also notes successful progress in bilateral cooperation in the field of peaceful use of atomic energy.According to the protocol, the sides are collecting information about the construction site, including information about its seismic activity. The sides are also assessing the possible environmental impact of the new unit.Armenian minister of energy and natural resources Armen Movsisyan said in June that the disaster at Japanese nuclear power plant Fukushima could not lead to dropping plans to build a new power unit for the Armenian nuclear power plant, as the country has no alternative, and the construction of coal-or gas-fired plants will increase the cost of electricity.The Armenian NPP is managed now by the Russian Inter RAO UES. In 2010 August the sides signed a corresponding intergovernmental agreement. Construction work is scheduled to begin in 2011. The new unit is supposed to be commissioned before 2017. Until then the currently operating unit must be closed. However, on February 15 Armen Movsisian said that the existing nuclear power unit will operate until the new one is built.The Metsamor nuclear plant, which accounts for about 40 percent of Armenia's electricity, has undergone numerous safety upgrades since being reactivated in 1995. According to government figures, Armenia has received $130 million worth of assistance from the United States, the European Union, Russia and other international bodies to upgrade the plant’s safety. The plant located some 30 kilometers west of Yerevan, was built in the 1970s but was closed following a devastating earthquake in 1988 that killed some 25,000 people and devastated much of northern Armenia. One of its two VVER 440-V230 light-water reactors was reactivated in 1995. The new plant is supposed to operate at twice the capacity of the Soviet-constructed facility. -0-12/07/2011 12:311:12?12/07/2011ALL NEWSAshgabat opens two new flyovers. Tass 121 AHGABAT, July 12 (Itar-Tass) — Turkmenistan’s President Gurbanguly Berdymukhamedov and St. Petersburg’s Governor Valentina Matviyenko participated on Tuesday in an opening of two flyovers at the Turkmenbashi-Avaza highway, which connects the airport of the Caspian port with the national tourist zone. The flyover bridges of 1,300 and 1,400 metres cost 121 million dollars. They were built by St. Petersburg’s Vozrozhdeniye Company. As a bonus, the company constructed a major fountain complex next to the flyover. “These bridges, in fact, are uniting Europe and Asia, as the route is of international importance,” Berdymukhamedov said. The thanked the Vozrozhdeniye company for the high quality of the project and expressed confidence that cooperation in transport infrastructures will continue in Ashgabat and in the Akhal Region. “St. Petersburg’s companies are ready to offer their experience and modern technologies to Turkmenistan, which is proved by the construction of the flyovers, which involved the Vozrozhdeniye company,” Valentina Matviyenko said at the opening ceremony. Her three-day visit to Turkmenistan is over on Tuesday. On Monday, Turkmenistan’s President Gurbanguly Berdymukhammedov and St. Petersburg Governor Valentina Matviyenko signed an agreement on economic, scientific, technical and cultural cooperation. Berdymukhammedov signed an order to have anew contract with the Vozrozhdeniye Holding on several road projects in Ashgabat, which are worth 223 million dollars. Thus, the company’s all projects in Turkmenistan exceed 900 million dollars. The promising projects to involve St. Petersburg companies in Turkmenistan mentioned over the talks include a plant to restore sturgeon fish, modernization of water purification in Ashgabat, reconstruction of energy enterprises, supplies for the oil and gas industry and others. Saakashvili speaks to Ekho Mosckvy radio Messenger Staff Monday, July 11 There are no interstate relations between Georgia and Russia as far as Moscow does not recognize the Georgian government, Georgian borders and a ceasefire agreement, President of Georgia, Mikheil Saakashvili told Ekho Moskvy radio station on Friday. “Moscow says that it will not even hold serious negotiations,” Saakashvili noted “moreover, the representatives of the Russian leadership have stopped calling us a country – they call us a ‘territorial-ethnic entity’, it is an old soviet, painful term,” he said, adding however, that inter-people relations still exist. “There are air flights with tourists coming to Georgia,” he noted. Speaking about the Russian president, Dmitry Medvedev, Saakashvili said the two leaders have a lot in common. “We belong to one generation, mutual courses, even one profession. However, I think that we have differences in the main thing – Medvedev does not make any decisions. He is very well chosen. Meanwhile here we (not me personally, but all of us) are able to agree on things, we make decisions. While, on the Russian side there is only one person, who is potentially able to negotiate, however he will not agree with anyone, this is Vladimir Putin,” Saakashvili said. When asked if he would have changed anything if he could go back to August 2008, Saakashvili said that in order to do things differently, both countries involved would have to change something in their actions. “When there is one country, especially a big one, which exceeds your power much more, there is almost no chance for a small country to avoid it. The Georgian president said Moscow had “preplanned” a conflict with Georgia. “Head of the Russian General Staff warned NATO at the NATO-Russia commission about a possible war in spring 2008. Then they bombed us several times, checking our reaction,” Saakashvili told Ekho Mosckvy “everything was very well planned.” The Georgian president talked about the alleged terrorist acts carried out or planned to be carried out on the Georgian territory, saying that Georgia has a specific suspect - Russian officer Borisov. “I’ve sent a letter to President Medvedev...This issue was raised by leaders of Western states at the meetings with him. Now we are waiting for the reaction, because the letter has already been sent. Of course he did not answer,” Saakashvili noted. As for Russian law enforcers’ claims that several tens of warriors have entered Russia from Georgia’s Pankisi Gorge, Saakashvili said that now “everything is transparent” in Georgia. “Any rotation of armed forces in Georgia is controlled by European observers. This is part of our agreement with the EU,” he noted “We have created total transparency in order not to repeat 2008 when there were questions about who did what,” he stated. Saakashvili touched upon the issue of political processes in Georgia, saying that if his opponent had won presidential elections in 2008 it would have been the “end of the world.” “Why? because it was a person who said that if he’d win, he would abolish the presidential post in two years, his programme was to live with some new mentality. He used to get humiliated at any question about his views on budget deficit or about unemployment,” the President said, referring apparently to Levan Gachechiladze. The President commented on the detention of photojournalists, including his personal photographer, on espionage charges. Saakashvili said he did not know about the details until half an hour before the arrest took place. He said there were cases when his relatives were also under investigation. “As it concerns my personal photographer, I was very upset and still I am very, very upset. But my personal feelings are secondary in this case,” he said.05:29?12/07/2011ALL NEWSMedvedev to meet with leaders of four parliamentary parties. Tass 8 MOSCOW, July 12 (Itar-Tass) — Leaders of four parties represented in the lower house of Russian parliament will by tradition meet with President Dmitry Medvedev to discuss election campaign themes. The ruling party United Russia thoroughly prepared for the discussion on the parliamentary elections due in December, the deputy secretary of the party’s general council presidium, Yuri Shuvalov, told Itar-Tass. “The elections will take place in the post-crisis period, in compliance with the new election legislation providing support for small parties that as we believe will be able to make their names heard and perhaps, will implement the law on receiveing one-two mandates,” he said. “We will speak about the election control from the point of view of creating equal conditions for all parties to monitor the voting. Transparency of the elections and registration of all possible violations are very important for us,” Shuvalov said. He also assured that “if some initiatives that should be fixed legislatively emerge during the dialogue with the president, we have an opportunity to do this as there is an autumn session ahead.” State Duma speaker Boris Gryzlov plans “to focus on protection of young people from a drug trafficking threat emanating from our southern borders and unfortunately, making progress.” In this regard he reiterated that child protection was the central issue of the president’s state-of-the-nation address. The vice speaker of the lower house of parliament, Ivan Melnikov, who is the first deputy chairman of the Communist Party’s central committee, supposed that the president will as always set the tone of the meeting himself. “Probably, we will begin from the reasons of the tragedy on the Volga Rive (where the cruise ship Bulgaria sank on July 10 killing 58 people). Melnikov, who will accompany KPRF leader Gennady Zyuganov to the meeting with the president, underlined that “in fact, this will be the last meeting, when some compromise decisions can be taken, as this will already be late to do in autumn.” The Liberal Democratic Party represented by its leader Vladimir Zhirinovsky and head of the party’s State Duma faction, Igor Lebedev, will touch upon “better living conditions for Russian people in the country and abroad, regulation of migration processes and customs policy as well as the housing construction.” The LDPR will also oppose any amendments to be made to the election legislation ahead of the elections. Just Russia speaks against any amendments, especially those made at the regional level, the party’s leader, Sergei Mironov said. Among other issues for discussion he proposed social welfare and offshore zones. 04:34?12/07/2011ALL NEWSTransport Ministry may ban An-24 planes on regular flights in 2012. Tass 47 MOSCOW, July 12 (Itar-Tass) — Most An-24 planes may be put out of service beginning from January 2012, if Russia’s air carriers that use them on regular flights fail to modernize them, the Transport Ministry’s press service told Itar-Tass. On Monday, President Dmitry Medvedev instructed the ministry to consider the issue of putting An-24 planes out of service on regular flights following the emergency landing of the An-24 plane on Ob River in West Siberia that killed seven people and injured another 30. “At the same time there is no talk about cancellation of flights of this type of aircraft. They can be used on non-regular charter flights,” the source said. The Ministry underlined that all An-24 should be re-equipped with aircraft anti-collision systems. “If Russia’s air carriers using such planes fail to modernize them, these planes will be put out of service on regular flights,” the source said. At present, there are 99 An-24 planes in the fleet of Russia’s air companies. Russia mourns the Bulgaria ship victims 12, 2011 07:46 Moscow TimeRussia mourns the victims of the Bulgaria cruise boat today. National flags are flying at half mast all over Russia. There will be no entertainment programmes or commercials on national TV.Many international leaders have extended their condolences to President Medvedev.The Bulgaria sank on the Volga River in Tatarstan last Sunday.There were 208 passengers on board out of which only 79 were rescued.The official death toll stands at 58 including 5 children. The rest are unaccounted for.?The rescue operation has been going on round the clock. Taking part are over 100 scuba divers as well as unmanned submersibles and other equipment. ?Russia says 128 likely dead in Volga river accident EDTBy Gennady Novik and Nikolai IsayevSYUKEYEVO, Russia (Reuters) - Russia said there was little hope of finding any more people alive on Monday after an overloaded tourist boat sank in the Volga River, killing 128 people in Russia's worst river accident in three decades.Eighty people were rescued on Sunday after the Bulgaria, a double-decked river cruiser built in 1955, sank 3 km (2 miles)from shore in a broad stretch of the river in Tatarstan.Emergency Situations Minister Sergei Shoigu told President Dmitry Medvedev that little hope remained of finding survivors.Sixty of the passengers may have been children, Russian media reported, and survivors said 30 children had gathered in a room near the stern of the ship to play just minutes before it sank."Practically no children made it out," survivor Natalya Makarova said on state television. She said she had lost her grip on her 10-year-old daughter as they struggled to escape."We were all buried alive in the boat like in a metal coffin," Makarova said, who escaped through a window.Sania Zakirova waited anxiously on the shore at Syukeyevo for news of her missing grandson and pregnant daughter-in-law."No one is telling us anything. Are they alive or dead?" she screamed, wiping back tears. Her son, who survived, "was struck by a big wave that carried his son straight out of his hands," the Kazan resident told reporters.DISASTERSRussia has a history of disasters and deadly accidents stemming from lax implementation of safety rules, from fires to plane crashes and mining disasters.Another relative told regional official Grigory Rapota: "You cannot bring the children back! But find their bodies. I don't want money from you, I want to take them into my hands and bury them in peace."Transport Minister Igor Levitin said the captains of two passing ships -- who according to survivors had not helped them while sinking -- faced "the most severe punishment," state-run RIA news agency reported.He also banned such vessels, of which Russia has 18, from operating.Cruises on the Volga, which cuts through the heart of Russia hundreds of kilometers east of Moscow and drains into the Caspian Sea, are popular among Russians and foreigners.Mikhail Korbanov, the editor of Russia's River Transport magazine, said the sinking was the most deadly river accident since the Alexander Suvorov crashed into a railroad bridge on the Volga in 1983, killing at least 176 people.Medvedev said the sinking would not have happened if safety rules had been observed."According to the information we have today, the vessel was in poor condition," Medvedev told a hastily convened meeting of senior ministers at his Gorki residence outside Moscow. "Then umber of old rust tubs which we have sailing is exorbitant."Seeking to deflect possible criticism of the authorities ahead of the March presidential election, he called for a "total examination" of passenger transport vehicles in Russia.Prime Minister Vladimir Putin sent his condolences and a day of mourning was declared in Russia on Tuesday.The regional Emergencies Ministry said they had brought 58 bodies to the surface, five of whom were children, but divers said they had seen more bodies trapped in the restaurant cabin of the Bulgaria, a 78-meter craft the ministry said was designed for up to 140 passengers.The boat, which was built in Communist Czechoslovakia, had 208 people on board including 25 unregistered passengers, Shoigu said.A spokeswoman for the Prosecutor General said the Bulgaria was overloaded, had no license to carry passengers and a problem with its left engine when it sailed out in a storm. State TV said it had never undergone major repairs.The Federal Investigative Committee said it had confiscated documents from the company that owned the boat. Spokesman Vladimir Markin said investigators were looking into why the boat was listing to the right when it set out.At least five people were killed and 30 injured when a Russian plane made an emergency landing on a Siberian river after an engine caught fire on Monday.Medvedev Orders Probe After Cruise Accident Ilya Arkhipov and Lyubov Pronina - Jul 12, 2011 12:58 AM GMT+0200 Russian President Dmitry Medvedev vowed “a complete review” of passenger ships after one of the deadliest accidents since the collapse of the Soviet Union in 1991 killed as many as 129 people on an unlicensed cruise. Fifty-seven bodies have so far been recovered after the July 10 shipwreck on the Volga River and almost no hope remains for finding more survivors from the Bulgaria two-deck river cruise ship, Emergency Minister Sergei Shoigu told Medvedev yesterday outside Moscow. Of 208 people aboard the tourist boat, 79 people were rescued, according to the ministry. Medvedev, who made combating corruption a centerpiece of his term, ordered a probe of the operator, officials and boats. Neither Medvedev nor his mentor Prime Minister Vladimir Putin has ruled out taking part in next year’s presidential election. “State control has increased in the past 10 years, but there is more bribe taking and less order,” Dmitry Oreshkin, a political analyst, said by phone from Moscow. “Perhaps now, if not Putin himself, then his People’s Front, will come out with an initiative to toughen and broaden state control.” Putin, who stepped down as president in 2008 because of a ban on serving more than two consecutive terms, in May formed the All-Russia People’s Front, a coalition of interest groups including labor, business and women, to broaden the political base for his United Russia party. Corrupt Economy Russia is the world’s most corrupt major economy, according to Berlin-based Transparency International’s 2010 Corruption Perceptions Index released in October. U.S. President Barack Obama called Medvedev yesterday to extend his condolences over the accident. The leaders also discussed Libya, the World Trade Organization, Sudan, Afghanistan and the Nagorno-Karabakh conflict, according to statement released by White House press secretary Jay Carney. Medvedev declared today a day of mourning, and he and Putin expressed condolences. The disaster raises concerns about safety oversight and regulations of Russia’s passenger transportation, he said. “The number of old tubs in operation exceeds all limits,” the president said. “The government owns only a small number of these ships, but that doesn’t mean that the government should shirk control. Shipping Disaster The incident is the worst shipping disaster in more than 25 years, according to Alexei Klyavin, president of the Association of Shipping Companies. Plane crashes in Irkutsk killed 125 people in 2006 and all 145 people in 2001, according to the Aviation Safety Network’s website. The boat sank “in minutes, very fast,” Liliya Khaziyeva, a spokeswoman for the Rescue Service from the neighboring Udmurtia region, said by phone from a boat near the accident site. “We found dead people wearing safety jackets, people who were simply unable to leave the ship.” Nikolai Chernov, a survivor, said on state television that he saw at least two ships pass by without offering help. The ship was returning to Kazan, the capital of Tatarstan, from the town of Bolgar when it sank about 740 kilometers (460 miles) east from Moscow at 1:58 p.m. local time on July 10. It sank about three kilometers from shore, according to a statement on the Emergency Ministry’s website. “About 30 children were being entertained in one room, according to passenger reports,” Khaziyeva said. Divers are working at depths of 7 to 14 meters, she said. Workers have combed the river banks and islands in an area where the water stretches into a reservoir about 30 kilometers across, she said. Faulty Engine The Bulgaria hadn’t been overhauled since 1980 and was running with a faulty left engine, and the cruise was operated without a license to carry passengers, the Prosecutor General’s Office said on its website. The boat had passed an inspection this year, according to state television. The Bulgaria was listing to the right when it left Kazan, which may be one of the reasons it sank, Vladimir Markin, spokesman for the Investigative Committee said on state television. A criminal investigation has been opened into violations of transportation safety regulations, according to the Investigative Committee’s website. To contact the reporters on this story: Ilya Arkhipov in Moscow at iarkhipov@; Lyubov Pronina in Moscow at lpronina@ To contact the editor responsible for this story: Balazs Penz at bpenz@ 09:14?12/07/2011ALL NEWSFour persons missing after hydrofoil overturns on Teletskoye Lake in Altai. Tass 68 GORNO-ALTAISK, July 12 (Itar-Tass) — Four persons are still missing after a Volga hydrofoil accident on Teletskoye Lake in Russia’s republic of Altai on Monday, a spokesman for the local small vessels inspection told Itar-Tass on Tuesday. According to the spokesman, the accident took place late on Monday when the hydrofoil, which was making a pleasure voyage, overturned and sank some 30 kilometers off the settlement of Artybash. There were 13 persons onboard the vessel, nine were taken by nearby motor boats. Search and rescue operations for the missing four were conducted till 23:00 Moscow time on Monday and were resumed at 07:00 a.m. on Tuesday. According to preliminary information, the accident occurred because the boat had developed excessive speed. The boatman who drove the vessel was said to be drunk and might have lost control of the vessel. 08:23?12/07/2011ALL NEWS21 wildfires reported in Russia’s Far East. Tass 78 KHABAROVSK, July 12 (Itar-Tass) — As many as 21 wildfires on an overall area of 1,037 hectares are ravaging in Russia’s Far East, a spokesman for the local forestry department told Itar-Tass on Tuesday. “The most difficult situation has evolved in the republic of Yakutia, with 17 wildfires raging on 425 hectares of forests and 340 hectares of non-forest areas. A big fire on 160 hectares of forests is reported in the Chukotka autonomous area, three fires on 87 hectares of forests are reported in the Amur region. NO wildfires are reported in other regions of the Far Eastern federal district,” the spokesman said. Fire fighting operations involve more than 400 firemen and 47 units of hardware. As many as 10 aircraft are patrolling the area. They are also used to airlift fire fighters and equipment to remote areas. As many as 1,362 wildfires on 457,000 hectares have been register in the Far East since the beginning of this year’s fire season. A total of 198 local officials have been brought to liability over violations of forest protection laws, a spokesman for the Far Eastern administration of the Russian prosecutor general’s office. A criminal case has been opened in the Amur region against acting director of the Norsky wildlife reserve on charges of negligence of office duties. The administration of the reserve furnished fake information about the wildfire situation and failed to ensure proper fire protection of the area, investigators said. 11:47?12/07/2011ALL NEWSSuspected organiser of clashes in Sagra detained - source. Tass 144 MOSCOW, July 12 (Itar-Tass) — Suspected organiser of the mass clash in the Sagra Village of the Sverdlovsk Region is detained, spokesman of Russia’s Investigative Committee Vladimir Markin told Itar-Tass on Tuesday. “Investigators have detained a local, who is known as Krasnoperov /Sergei the Gypsy/, who is suspected of having organised the mass conflict in the Sagra Village,” he said. The investigators said that tense relations between Sergei the Gypsy and Sagra’s locals had caused the conflict. Detectives probe into a version that the conflict was caused by theft of personal belongings of a civilian who worked for Sergei the Gypsy, and by the competition in lumbering in Sagra. The mass fight involving Sagra’s locals and visitors from Yekaterinburg occurred on July 1 at the entrance to the village. Investigators opened criminal cases over murder and hooliganism. 09:57?12/07/2011ALL NEWSBlast occurs at office of Investigations Committee official in Moscow. Tass 95 MOSCOW, July 12 (Itar-Tass) — A shell-less explosive device went off in the official of a deputy head of Moscow’ s northwestern district administration of the Russian Investigations Committee, a source in Moscow police told Itar-Tass on Tuesday. According to earlier reports, the blast occurred near the building of the prosecutor’s office in Moscow’s northwetsren at Zhivopisnaya Street 42. This building houses the district investigations administration as well. No victims have been reported so far. Bomb experts have established that the blast occurred at the office of deputy head of Moscow’s northwestern district administration of the Russian Investigations Committee Mr. Zalmanov on the first floor of three-storey brick building. The device had no bolts and nut. Its yield was about 100 grams of TNT, the source said. The blast damaged the wall, the ceiling, and furniture, broke windows, window guards and the door. 11:15?12/07/2011ALL NEWS5 witnesses interrogated over blast at investigations committee office in Moscow. Tass 125 MOSCOW, July 12 (Itar-Tass) — Five witnesses have been interrogated over the blast that occurred in the office of a deputy head of Moscow’s northwestern district administration of the Russian Investigations Committee, a spokesman for the Russian Investigations Committee told Itar-Tass on Tuesday. According to Vladimir Markin, investigators are examining documents that were taken from the office. Earlier in the day, Markin said the criminal case was opened on charges of hooliganism and illegal possession of explosives. The blast occurred at 23:30 Moscow time on Monday, when an unidentified person threw a shell-less explosive device into the office through the window. The blast damages the office’s walls and ceiling, and broke the windows. No one was hurt. According to a source in local police, the device had no bolts and nuts. Its yield was about 100 grams of TNT. 06:23?12/07/2011ALL NEWSPolice searching for Moscow synagogue arsonists. Tass 22 MOSCOW, July 12 (Itar-Tass) — Police are searching for a group of men who made an arson attack on a synagogue in Moscow, the press service of the capital interior ministry department told Itar-Tass on Tuesday. “A group of hooligans attempted to put a synagogue in Moscow’s northeast on fire throwing several bottles of flammable liquid. No fire broke out,” the source said. Nobody was injured as a result of an arson attempt. Police are combing the area to find the arsonists. 12 July 2011, 11:00Arson attempted on synagogue in Moscow , July 12, Interfax - An arson attempt has been made on a synagogue in Moscow.Four unidentified young men wearing masks threw incendiary bottles into the synagogue building on Signalny Proyezd at 12:40 a.m. on Tuesday and fled, a law enforcement source told Interfax."Hooligans threw several incendiary bottles at the synagogue, but none of them hit the building and none of them exploded," a Moscow Police spokesman told Interfax."It was an act of hooliganism and the incident will be probed on hooliganism charges," he said.But a source in law enforcement services said the attack could have been an act of nationalists' revenge for a verdict, handed down to five members of the Nationalist-Socialist Society on Monday.Reports said earlier that the Moscow District Military Court sentenced five members of the Nationalist-Socialist Society to life on counts of attempted murder and attempted terror attacks. Fan held for bringing banana to a football match in Siberia 12/07/2011MOSCOW, July 12 (RIA Novosti)A football fan, who carried a banana in his bag, has been briefly detained before a match in the Siberian city of Novosibirsk, the official website of Russia's First Division said.The incident took place before a game between Russia's First Division clubs Yenisey Krasnoyarsk and Sibir Novosibirsk on Monday.A banana has become a symbol of racist attacks in Russian football after two incidents involving Brazilian footballer Roberto Carlos. Both Yenisey and Sibir have no black players, however."He [the fan] was detained by police who demanded him to write an explanation of why he brought a banana to the stadium," the website said."Later, he was informed of consequences that throwing a banana to the field may entail, and was allowed to return to his seat."In late June, Samara club Krylya Sovetov was fined 300,000 rubles ($10,630) following an incident when a fan threw a banana in the direction of Carlos.This is not the first time the 38-year-old Brazilian, who won the 2002 World Cup, has been subjected to an act of racism in Russia. A half-peeled banana was also thrust at Carlos in St. Petersburg in March, ahead of the first game of the season.Russian nationalists given life for 27 racist murders ISTMOSCOW (Reuters) - A Russian court handed down life sentences on Monday to five ultra-nationalists convicted of the racist murders of 27 people, and shorter prison terms to eight members of their group.The ringleader was among the five men given life sentences for the 2007-08 killing spree in and around Moscow, which targeted people from Russia's mainly Muslim North Caucasus and from ex-Soviet Central Asia.Standing in a glass box, the group shared jokes and attempted Nazi salutes in handcuffs before their sentencing in the Moscow Military District Court, state TV showed.Eight members of the gang, including one young woman, were given terms of between eight and 25 years behind bars, Russian media reported.Neo-nationalist groups have been increasing in number in Russia, and violent clashes in the capital between Muslims and ethnic Slavs have raised concerns authorities will be unable to keep order ahead of March 2012 elections.Over the last two years, a judge and a lawyer who fought against neo-nationalists, Eduard Chuvashov and Stanislav Markelov, were shot and killed in attacks officials connected to their work.Rights workers say the Russian government's lenient attitude to the far right allows racism to flourish in Russia, which is home to some 20 million Muslims, a seventh of the population.Many migrants from the impoverished North Caucasus, where an Islamist insurgency is raging, come to the Russian heartland for menial work. They say they are often treated with suspicion by ethnic Russians and many face racism.Those convicted on Monday belong to the far-right Nationalist Socialist Society, which was outlawed in February and whose logo is a red and black stylised swastika.The group's leader Lev Molotkov pleaded not guilty, and the defence plans to appeal against the length of the sentences, Russian media reported.After being convicted, some of the nationalists shouted: "Our conscience is above your laws, we'll be back!" Interfax news agency reported.They were also found guilty of attempted terrorism, creating and participating in extremism and inciting racial hatred.(Reporting by Amie Ferris-Rotman, editing by Tim Pearce)Russian carrier-rocket launch pushed back until later date 12, 2011 10:14 Moscow TimeThe launching of the “Soyuz-2.1.a” carrier-rocket with six US communication satellites Globalstar-2 has been pushed back until a later date, says the Roskosmos press service head Alexei Kuznetsov.According to the official, just when the Soyuz will take off depends on how quickly the problems found during the preparation of the rocket for launching will be fixed.Earlier, the take-off of the “Soyuz-2.1.a” was already postponed due to problems in removing the launch pad umbilical tower from the carrier-rocket, problems that emerged just seconds ahead of the take-off.12 July 2011, 11:32Surkov: Putin was given to Russia by God , July 12, Interfax - First deputy chairman of the Russian Presidential Administration Vladislav Surkov believes it is not by chance that Vladimir Putin became Russian President in hard times for Russia and Ahmad Kadyrov was the first President of Chechnya. "It seems to me that if God decides that a nation should live for some more centuries then in a hard hour He sends someone who leads people out of the dead-end, war, devastation, trouble. It seems to me Ahmad-Hadzhi was the man sent by God to the Chechen people in order to lead them out of trouble this nation faced," Surkov said in his interview with the Dialogi program on the Chechen TV on the eve of 60th birthday of the first Chechen President."He wasn't chosen by an HR department. There was no questionnaires and interviews, there was no announcements in papers that a president for the Chechen Republic is being searched for," Surkov went on to say.He has the same opinion on Putin's election in 2000."To tell the truth I believe that Putin was given to Russia by God and destiny in a hard hour for our one big nation. It seems that these people (Putin and Kadyrov) had to find each other as both of them were destined to save our nations, big Russian nation and the part of this nation - Chechen people. I believe that's the way it was," Surkov said. He again stressed that he rather refers it to the "questions of destiny than any personal characteristics." Russian Press at a Glance, Tuesday, July 12, 2011 12/07/2011BULGARIA SHIP SINKINGThe sinking of a tour ship on Volga is on the front pages of most Russian newspapers again. Tuesday was declared a nationwide day of mourning in Russia. As the victim’s bodies are being recovered from the sunken Bulgaria tour ship, more details of the deadly accident are becoming known(Kommersant, Vedomosti, Rossiiskaya Gazeta, Izvestia, Nezavisimaya Gazeta, The Moscow Times)?POLITICSRussian Foreign Minister Sergei Lavrov began a visit to Washington early on Tuesday. His talks with U.S. President Barack Obama and other top state officials are to focus on Obama’s forthcoming visit to Moscow. Russia and the U.S. are to speed up consultations on the European missile shield agreement, which the two leaders failed to sign during the G8 summit in Deauville(Kommersant, Izvestia, Nezavisimaya Gazeta, The Moscow Times)?Russian President Dmitry Medvedev met with major Russian businessmen to discuss privatization and ways to improve investment climate in the country(Kommersant, Rossiiskaya Gazeta, Izvestia)?Russian Prime Minister Vladimir Putin met with members of the Russian Academy of Sciences and heard their opinions on how to improve Russia’s development strategy through 2020(Kommersant, Rossiiskaya Gazeta, Izvestia, Nezavisimaya Gazeta)?The approval rating of Ukrainian President Viktor Yanukovych and his party fell dramatically, though not to the benefit of his main political rival, former Prime Minister Yulia Tymoshenko. Experts warn that the growth of protest sentiments in the absence of a strong opposition force may lead to an uprising against the system in general(Kommersant)?An armed conflict may break out between Israel and Lebanon over gas fields in the Mediterranean, which Israel has recently included into its exclusive economic zone(Kommersant, Moskovskie Novosti)?ECONOMYThe government prepares to significantly increase its privatization program by selling assets worth over 1 trillion rubles annually in 2012-2016(Vedomosti)?REAL ESTATEThe Moscow authorities decided to reconsider the previous government’s decision to demolish 209 buildings in Moscow’s historic center(Kommersant)?TELECOMS & ITRussian long-distance operator Rostelecom plans to provide all houses in the Central Federal District with broadband Internet access and WiFi. The government has already included the project into the list of its priorities(Vedomosti)?SOCIETYMoscow Mayor Sergei Sobyanin and Moscow Region Governor Boris Gromov have agreed to more than double Moscow territory by including 144,000 hectares into the official boundaries of the Russian capital. The project was submitted to the Russian president for approval(Kommersant, Moskovskie Novosti, Vedomosti, Rossiiskaya Gazeta, Izvestia, The Moscow Times)?Six people died when an Antonov An-24 plane with 37 people on board, including one child, ditched in the Ob River on the border between the Tomsk and Khanty-Mansiisk regions early on Monday after a fire broke out in the aircraft's port engine(Kommersant, Moskovskie Novosti, The Moscow Times)?The Moscow District Military Court sentenced the leader of a Russian nationalist group and five other members to life in prison for dozens of ethnically motivated murders, others were sentenced to 10-13 years behind bars(Kommersant, Rossiiskaya Gazeta, The Moscow Times)?Two aides to lawmakers tried to sell a State Duma mandate for 7.5 million euro. They offered to put the buyer into the party’s list at the forthcoming parliamentary elections(Rossiiskaya Gazeta, Izvestia)?Children of migrants who want to study in Moscow schools, will be tested for their knowledge of Russian(Izvestia)12:13?12/07/2011ALL NEWSRussian press review. Tass 92 MOSCOW, July 12 (Itar-Tass) — Itar-Tass World Service. Russia announces mourning day for the dead on July 10 in disaster with M/S Bulgaria. July 12 was announced the day of national mourning in connection with the shipwreck of the Bulgaria cruise ship that sank in the Volga River in the area of the Tatarstan Republic. It turned out on Monday that the disaster of the Bulgaria diesel electric ship, that took the lives of over 100 people on July 10 (third of whom were children), took place under conditions which could be clearly called as ordinary for the Russian river fleet. In any case, dozens of outdated vessels carry passengers on the self-same Volga. They have no licenses; and their owners regard haulages, listings as well as non-operating engines as nothing extraordinary. The ship was operable, claimed its owner and operator. The Bulgaria pleasure boat with a seating capacity of 140, built in Czechoslovakia in 1955, sank quickly on Sunday three kilometres from the Volga bank, notes Vedomosti. According to Minister for Emergencies Sergei Shoigu, the vessel carried not 185 people, as it was recorded in documents, but 205. Only 80 were rescued. Skin divers could bring from the sunken ship 55 bodies by Monday evening. Novye Izvestia states that a report from spokeswoman from the Prosecutor-General’s office Marina Gridneva appeared on Monday. According to Gridneva, the M/S Bulgaria was overhauled 30 years ago, while it started its tip overloaded and with dead left engine as well as with no license for carrying passengers. In the opinion of chairman of the State Duma Transport Committee Sergei Shishkarev, the crippled ship started its trip either over negligence of control bodies, or corruption. According to the latest data, there were 205 people aboard the M/S Bulgaria, notes Rossiiskaya Gazeta. It turns out that the Bulgaria was overloaded. The thing is that according to technical specifications, the motor ship could carry no more than 120-140 people. Kommersant sources at the state commission, investigating circumstances of the disaster, noted that all factors, called by law enforcement bodies, could contribute to the emergency, but were not likely its reasons. In the commission’s opinion, dozens, and may be, hundreds of ships on the Volga and other Russian rivers operate under similar and even more difficult conditions for years. The state of those ships is far from ideal. Commission members believe that the cause of the disaster is probably connected with actions of the crewmembers, above all, its captain while making the last manoeuvre. Izvestia quotes President Medvedev’s words at a special meeting on Monday. “The number of such old tubs is innumerable. It is necessary to assess the situation and to make owners carry out their overhaul or put them out of operation. Tthe entire country should face this task,” he stated. X X X Moscow to expand by 150 percent. Moscow Mayor Sergei Sobyanin and Governor of the Moscow Region Boris Gromov described plans to Dmitry Medvedev on Monday on expanding Moscow’s territory. The Russian capital will be 150 percent larger thanks to the region’s territory. Offices of a financial centre will be built outside the Moscow Circular Highway supposedly in the Rublyovo-Arkhangelskoye direction. Sobyanin and Gromov submitted Medvedev their proposals on changing the capital’s boundaries, Vedomosti writes, noting that an idea of turning Moscow into a metropolitan area and of shifting federal officials beyond the Moscow Circular Highway, was put forth by the president at the recent Petersburg economic forum. Moscow’s area will increase thanks to the region by 135 percent, from the present 107,000 hectares to 251,000. The capital will expand, above all, in the southern direction: Moscow may receive areas, limited by the Kievskoye and Varshavskoye highways as well as the Grand Circle of the Moscow Railway. But it follows from a press release of the Moscow city government, the government of the Moscow Region and Gromov’ s statement that Moscow may also include Skolkovo with its innovation centre (south-west) and “Rublyovo- Arkhangelskoye” (west) where an International Financial Centre will be located. It is planned to build 105 million square metres of real estate in new areas (60 million square metres of housing and 45 million square metres of administrative offices), that is nearly ten times more than there is now there as well as to resettle two million people there (press release says that 250,000 people live there now, though according to the census, much more population lives in that area), the newspaper notes. A Kremlin official, to whom Vedomosti refers, says that Medvedev backed all proposals on the whole, but will study them additionally. Kommersant emphasises that 144,000 ha, the city gets from the region, are located between the Varshavskoye and Kievskoye highways. The city boundary in this sector will sprawl from the present Moscow Circular Highway to the Grand Circle of the Moscow Railway. Federal offices will move precisely there with time. It was not specified on Monday when the resettlement is made. Sobyanin only explained that it would take a year for drafting a project for withdrawing government offices from Moscow’s centre. It was decided to look for a place for an International Financial Centre a bit more to the west – in the Roblevo-Arkhangelskoye direction. “A tentative decision was taken to move precisely in this direction,” Gromov said. The new territory will need making a radically new master plan of Moscow instead of the one, adopted under Yuri Luzhkov in 2009, Kommersant learnt from scientific director of the Transport Research Institute Mikhail Blikin. According to the scientific director, “the best highway in the area of new development construction – the Kievskoye Highway” – will need reconstruction, since the eight-ten-lane traffic along the highway is organised only for the first 40 kilometres, and turns into the four-lane road closer to a new Moscow border. The Kaluzhskoye Highway should be also reconstructed. Besides, the Moscow City Hall reported that three new routes would be built, connecting city boundaries, bypassing the centre. The Moscow Circular Highway will be also reconstructed. It is also planned to build a Metro underground line to Skolkovo. X X X Bank of Russia does not advise citizens to sell dollars. First deputy chairman of the Bank of Russia Alexei Ulyukayev said that Russians, keeping their savings in hard currency, should not dump US dollars over rumours about problems with the American state debt. In the deputy chairman’s opinion, “who will start selling dollars, will lose”. Experts are also sure that nothing will happen to the American currency in the near future. Komsomolskaya Pravda quotes Ulyukayev’s words: “A jump in exchange rates is possible, but those who will start selling out dollars, will lose. A simple rule for unsophisticated investors: don’t make fuss and don’t change the structure of your investments”. There are no grounds either or anxiety over the fate of the Russian rouble, while prices may nosedive in the new future, hopes Ulyukayev, writes Rossiiskaya Gazeta. He gave an advice to dollar holders in connection with press reports on a possible technical default of the US on state securities. The thing is that the country topped another ceiling of the state debt back on May 16 which was set by the Congress at 14.3 trillion dollars. If the Congress does not vote for an increase in the ceiling by August 2, this may trigger a technical default, that is the country will not pay for its obligations. But Ulyukayev explained that though a technical default may cause some drops in the dollar’s exchange rates, the question is how long this will last. The main thing is, the deputy chairman intimated, that he does not believe in the very possibility of a default. “This is impossible,” he said. On the other hand, a potential partial default of the Greek economy will not tell negatively on the rate of the Russian rouble. “We are not holders of Greek obligations,” Ulyukayev dispelled fears. He confirmed his previous forecast on a zero outflow of capital, despite the fact that money was flowing away from Russia in the past. Leading expert of the Development Centre Sergei Pukhov, quoted by Novye Izvestia, is convinced that nothing threatens the dollar in the long-term perspective. “Indeed, the US debt dependence is on the rise, but trust in the dollar persists for the time being,” the analytic said. “That is no matter what happens to the top level of the debt, people will invest in American assets all the same. Nothing will happen to the dollar. Moreover, if any upheavals, connected with debt problems, incidentally not only in the US, but also in Europe, happen, the dollar will play the role of a calm haven. Capital will be quickly invested precisely in dollar assets during a crisis.” Too Special A Friendship: Is Germany Questioning Russia's Embrace?'s no secret Germany has one of Europe's closest relationships with Russia. Berlin is Moscow's largest customer for natural gas and its biggest trading partner in general. The close ties worry those who believe Russia is using its natural resources for political advantage as well as ...Monday, July 11, 2011By RFE/RL? ?? Temperatures were approaching freezing last November when a stern Vladimir Putin delivered a trademark tirade at a business forum in Berlin's venerably posh Hotel Adlon, steps from the Brandenburg Gate.Captains of industry sat stony faced as the Russian prime minister, reminding them Germany was phasing out nuclear power, said they had nowhere to turn but Russia, which was already supplying 40 percent of the country's demand for natural gas from its vast deposits. Otherwise, "how will you heat your houses?" he mocked. "Even for firewood, you'd have to go to Siberia."The immediate object of Putin's ire was a European Union plan -- "no better than terrorism," he called it -- to liberalize its energy markets, which he said would create barriers to investment by Gazprom, Russia's giant state-controlled monopoly.Gazprom had spent years buying up European energy infrastructure. That effort was now under threat, prompting thunder from Putin. "What's this robbery?"It was the kind of performance his hosts had been intent on avoiding. Since the collapse of communism in Russia, successive German governments have exerted painstaking efforts to smooth relations with Moscow. Now Putin appeared to confirm his critics' fears.Some read his diatribe as an indication of frustration. The Kremlin had been confidently cementing European dependence on Russia, partly by collecting stakes in European energy companies. Then the global financial crisis diminished energy consumption, compounding other developments in the industry that were threatening to undermine Moscow's strategy. Casting himself as a great liberalizer, Putin proposed the creation of a free-trade zone "from Lisbon to Vladivostok."Polite SkepticismGermans responded with polite skepticism. Chancellor Angela Merkel issued vague praise before dismissing the offer as belonging to a "future vision." For the first time in years, however, the future of Germany's energy relations with Russia is no longer clear.Putin and other officials have been busy seeking exemptions from EU regulations in Brussels, chiefly by threatening higher gas prices. Meanwhile Moscow is pushing ahead with colossal projects to build two pipelines to Europe that the Kremlin hopes will lock in European dependence.One of the routes will end in Germany, Gazprom's largest customer and Russia's biggest trading partner in general. Moscow sees its relationship with Berlin as its greatest asset for playing a greater role in European affairs. At the same time, Germany, positioning itself as Russia's most important EU partner, is trying to finesse what Germans call a "modernization partnership" with Moscow.The tight relationship worries those who believe that Russia is using its natural resources for political advantage as well as commercial profit.Critics say that by making lucrative deals with companies in Germany and elsewhere, Some believe Moscow's promise of a steady flow of cheap energy has encouraged German politicians to surrender a degree of sovereignty by reducing their enthusiasm for EU unity and collective action, especially on the energy front.Such tendencies reverberate far outside the country's borders since Germany, the European Union's longtime industrial engine, is now emerging as its sole political superpower. Falling gas prices may now encourage Germany to reassess its role, but it may be too late to slow Moscow's race to further consolidate its control over Europe's energy industry.Co-DependenceDays after Putin's November visit, record snowfall during a freak deep freeze all but shut down Berlin as if to reinforce his warning.Although the efficient order projected by legislators' modernist offices near the Bundestag seems a world away from Moscow's corruption and bluster, the fact is that Germany's extraordinary export-driven economic boom depends on Russian energy.The implications of that dependence were first driven home for most Germans when Gazprom briefly cut off gas to Ukraine during a price dispute in 2006, disrupting European supplies. As Putin indicated in November, the dependency will surely grow as Germany moves up its timetable to shut down its nuclear power plants in the wake of Japan's Fukushima Daiichi disaster, and demand for energy continues to rise.Hans-Ulrich Klose, a dapper, gray-haired veteran member of the Social Democratic Party (SPD), admitted the obvious by saying it's impossible for Germany to solve its energy problems without Russia.Antagonizing the Kremlin with criticism and isolation isn't the answer, he told me in his handsome office adjacent to the parliament, laying out the official rationale. Instead, engagement offers the prospect of influencing long-term change. "So it makes a lot of sense to try to put them on a reliable basis, which is what we're actually trying," he said.Former German Chancellor Gerhard Schroeder declined to be interviewed for this article.Germany may depend on Russia for energy, Klose added, but Russia desperately requires German investment and technology to tackle the critical task of modernizing its seriously inefficient economy.Despite evidence that growing Russian authoritarianism is increasingly marginalizing independent NGOs, he said Russians also want German help in building civil society and democratic institutions. That, he said, makes the relationship workable because it's one of co-dependence.SPD politicians led by their onetime leader former Chancellor Gerhard Schroeder are among the strongest advocates for better relations with Moscow.Acknowledging that Russia doesn't meet normal Western European standards, Klose said making it a "normal European" country will require two or three generations. In the meantime, he maintained, creating dependency limits the possibilities for Russia to "to sneak out and do something crazy."'Historic' DealSuch arguments for engaging Russia gained their greatest currency around December 2005, when officials from both countries met in a small village in northwestern Russia on a snowy day for an event Schroeder may have wished had never taken place.The German energy minister joined Russia's prime minister to launch construction on a key Kremlin project: a new pipeline that would directly connect Russia and Germany under the Baltic Sea. The Northern European Gas Pipeline, later christened Nord Stream, would deliver supplies from the Yuzhnoe-Russkoe fields in western Siberia, bypassing Soviet-era pipelines traversing troublesome transit countries such as Ukraine.Gazprom CEO Aleksei Miller was on hand, but before giving the signal for welders to begin joining the ceremonial first two pipes -- symbolizing the start of what he called a "fundamentally new phase in cooperation between Russia and Germany" -- he dropped a bombshell: the chairman of the Gazprom-controlled consortium overseeing the construction would be none other than Schroeder himself.He'd stepped down as chancellor only weeks earlier, and the reaction to the news in Western capitals was instant and damning. Schroeder's new job was for a project he'd not only championed in office, but also, as it later turned out, guaranteed with a billion euros of government money.Schroeder, who declined to be interviewed for this article, said he would receive 250,000 euros a year. If nothing else, his critics charged, it stretched the boundaries of bad form. Others went further.Polish Defense Minister Radek Sikorski -- whose country, along with Ukraine, Lithuania, and others, feared the end of transit fees and access to Russian gas -- compared the Nord Stream deal to the Molotov-Ribbentrop pact that partitioned Poland between Nazi Germany and the Soviet Union in 1939.Former Czech President Vaclav Havel told me the pipeline project was a "provocation." It could only be completed "by people who don't know anything about modern history, or what's going on today."No doubt aware of the controversy his new job would generate, Schroeder had wanted the announcement to come the following summer. But Alexander Rahr of the German Council of Foreign Relations, told me Putin decided to "give Schroeder a present" instead; by leaking the news he believed would make Schroeder appear more influential.A key figure in German-Russian economic relations with close ties to Moscow, Rahr called Schroeder a "strong believer" in the alliance he helped forge with Moscow. "He thinks he'll enter history for that."Schroeder's involvement with Russia -- where the Kremlin's drive to employ retired Western politicians has been dubbed "Schroederization" -- had personal as well as political motives. The son of a housecleaner, he felt close to Putin, who spent his hardscrabble childhood in a Leningrad communal apartment and speaks fluent German.The chancellor, who has adopted two Russian orphans, became one of Putin's biggest boosters, once famously calling him a "flawless democrat."But it wasn't until the U.S.-led invasion of Iraq in 2003 united the two in opposition that they drew publicly close. Criticized even within his own SPD for pushing painful social reform at the time, Schroeder "needed other projects," Rahr said. "And by turning to Russia, he was following the Ostpolitik tradition of Helmut Schmidt and Willy Brandt," who called for "change through rapprochement" with communist East Germany in the 1970s.New OstpolitikSchroeder's old SPD allies titter uncomfortably when asked about their former leader's move to Nord Stream.Rolf Muetzenich, the party's foreign policy chief, told me he sees no conflict between the ex-chancellor's ongoing role as a politician and Gazprom lobbyist. "He's a social democrat when you look at his values," he concluded in his plush office on Unter den Linden, Berlin's Champs d'Elysées.However, others criticize Schroeder's decision -- and his continued membership in a party that still promotes "social justice," including combating the influence of big monopolies -- as more than a mere embarrassment."Disgusting," said Marieluise Beck, a Green Party member of parliament, over tea in her office in the same building. "With the Nord Stream deal, Schroeder gave Russians the first real possibility of dividing and conquering," said Beck, who is among the very few politicians to criticize, or even admit, Russian influence on foreign policy.She is convinced Gazprom is different from Western firms because beyond than the usual merging of politics and business, it actually helps execute Moscow's foreign policy by offering very lucrative contracts to European energy companies.Their executives then act as lobbyists for the Kremlin, leaning on their governments to put their national interests above a unified European energy strategy. "Of course it weakened the EU," Beck said of Nord Stream, "giving Putin a wonderful opportunity to act according to his interests and not the interests of those countries."Merkel's election in 2005 promised change. Born in East Germany and conversant in Russian, she took office urging the EU to adopt a unified energy policy and diversify energy supplies.During her first visit to Moscow as head of state -- in January 2006, shortly after Russia's gas shutoff to Ukraine -- Merkel made a point of meeting human rights activists to signal a departure from Schroeder's refusal to so much as nod in their direction.German Chancellor Angela Merkel soon dropped her combative stance towards Russia.That "changed the atmosphere," said Beck, a prominent rights advocate. But, she added, Dmitry Medvedev, who has cultivated a misleadingly liberal image since becoming Russia's president in 2008, has since "softened" views toward Moscow. "He looks like the West and talks like the West, so relations are more friendly and relaxed. But when it comes to real change in Russia, you don't find much."Nevertheless, Merkel soon dropped her combative stance. Her first government, which lasted until 2009, sold its renewed drive to engage Russia as an updated Ostpolitik.Now "rapprochement through economic interlocking" would supposedly encourage Moscow to adopt Western values by helping integrate it into the Western economy, a notion the energy lobby tirelessly promoted.By 2008, Germany again appeared to be Russia's biggest booster in Europe. When the Bush administration campaigned to put Ukraine and Georgia on a path to NATO membership, which provoked fury in Moscow, Merkel led the opposition to the plan.NATO rejected the initiative, despite international outrage over Russia's summer invasion of Georgia. Beck said he believes Merkel "closed the window of opportunity" on Ukraine, where a new pro-Moscow government is now busy arresting former pro-Western officials.Perhaps more tellingly, Merkel then headed the effort to block proposed EU regulations that would have restricted foreign companies from buying European energy utilities, measures aimed at slowing Gazprom's advance.Beck told me that in Russia itself, the culture of corruption, lawlessness, and arbitrary Kremlin rule has been bolstered by Germany's unwillingness to criticize it. "Our logic is we must be nice, good friends with the Kremlin because we want their oil and gas," she said. "But the Putin show would be over if he couldn't sell them to his Western partners."A Clandestine CompanyGazprom conducts much of its German business through the sleek Berlin headquarters of its subsidiary Gazprom Germania.It was established in the early 1990s by Moscow's old friend Hans-Joachim Gornig, the former deputy chief of East Germany's oil and gas industry who oversaw the construction of the GDR's pipeline network.Now headed by Vladimir Kotenev, a well-connected former Russian ambassador to Germany, the company employs some 200 people. They maintain a low profile, said Heiko Lohmann, who publishes a newsletter about Germany's gas industry, partly because no one in German officialdom keeps "a really close eye" on their activities.What's clear is that Gazprom has signed deals that have proved very profitable for its German partners, chief among them its main Nord Stream collaborators: energy giant E.ON and chemical giant BASF.E.ON has the flexibility to buy less gas, at Gazprom's expense, when temperatures rise. Claus Bergschneider, a former managing director of Gazprom Germania who told me that Western companies don't do the same, characterized the favorable terms as "political support" for German energy companies.Besides making money for its corporate partners, Gazprom has taken advantage of previous liberalization in the EU gas market aimed at weakening the power of large monopolies by forcing them to "unbundle" distribution networks from production facilities.Ironically, that has helped one of the world's largest monopolies snap up newly freed parts of the profitable "downstream" energy market, the utilities that deliver Russian energy supplies directly into the homes of its European customers.Gazprom's German ventures include its Wingas joint venture with Wintershall, a subsidiary of BASF that's Germany's largest oil and gas producer and controls 18 percent of the gas market. Gazprom has given its top German partners unrivaled -- albeit largely symbolic -- stakes in some of its Russian assets. BASF and E.ON each control almost one-quarter of the Yuzhno-Russkoe gas fields that will provide most of the supplies for Nord Stream.In addition to its numerous German ventures, Gazprom Germania holds stakes in a number of companies outside the country, including almost 40 percent in a shady Austria-based gas-trading company called Centrex, whose parent company Stern magazine traced to an "inconspicuous three-story building" in Cyprus. "Such convoluted constructions make it almost impossible to keep track of the flow of money," the magazine declared.SPD foreign policy spokesman Muetzenich dismissed such criticism, saying there's "no big difference" between the behavior of Russia and other countries. "Is there a difference when you look at Libya or Qatar or other key players in energy policy?" he asked. "Governments and companies are also very close there."As for concerns about Gazprom buying up Western energy utilities, Muetzenich said, "it's a free market." But it's no secret Gazprom uses shadowy front companies to obscure its role in deals across the continent and, many suspect, in channeling huge sums to partners and friendly politicians.Among oligarchs and other powerful enablers, the company has been tied to Semyon Mogilevich, reputedly Russia's biggest mobster. Frankfurt-based investigative journalist Jurgen Roth sees that arrangement reflecting the corruption in the company's ethos. "You can be sure nothing takes place without kickbacks or bribery," he told me.Roth has uncovered border guard documents describing an investigation of a Gazprom manager found carrying letters that outline schemes for transferring billions of dollars around the world. He said the German authorities declined to probe further because they deemed the case didn't involve Germany. "But that money belongs to Gazprom shareholders," Roth said, "and it's flowing here from Russia."Kremlin LobbyistsGazprom lobbying is especially effective in Germany because the energy industry's influence is unrivalled. Four companies -- BASF, E.ON, and electricity utilities RWE and Energie Baden-Wurttemburg -- are dominant. Ties between business and politics are especially strong in the SPD heartland of North Rhine-Westphalia, a major industrial base that's home to RWE, the country's second-largest electricity producer, and E.ON subsidiary E.ON Ruhrgas.The big four play a large role in formulating German energy policy through a "very complicated network" that lobbies ministries and manipulates public opinion, the Green Party's energy policy chief Hans-Josef Fell told me.Fell, who sports black jeans and a beard, wrote a renewable energy act enacted when the Greens -- who want all Germany's energy to come from renewable sources by 2030 -- were in government.Fell said he believes only renewables can provide real energy security. He said when power companies blamed spending on renewable energy for a recent rise in consumer electricity prices, "nearly everyone believed it.""But it wasn't true," he said. "In fact, renewables lower the price."When it comes to Berlin's Russia policy, the energy lobby influences public and political opinion through the Committee on Eastern European Economic Relations, which represents German companies doing business in Russia and other former Soviet Bloc countries. Director Rainer Lindner, who denied the organization is a lobby group, likened its activities to "economic diplomacy.""People like Schroeder are actively trying to improve energy security in Europe," he told me, dismissing criticism that co-dependence is chiefly a means of sugarcoating the harsh reality that Germany has nowhere but Russia to turn for its energy. Repeating the argument that Germany can influence Russian behavior, he pointed to a high-profile annual conference on civil society called the St. Petersburg Dialogue, set up a decade ago by Schroeder and Putin.But journalist Gemma Poerzgen, who wrote a book about Germany's energy ties to Russia and attended last year's meeting, called the conference "ridiculous."She told me last year's meeting in Yekaterinburg, which she attended representing Reporters Without Borders, included not a single small or medium-sized company. "It's dominated by Gazprom." Gazprom chairman Viktor Zubkov, a stern Putin crony and former prime minster whose son-in-law is the current defense minister, heads the conference's Russian committee."There's a lot of interest in driving the dialogue in the direction of nice talk with no real debate or criticism," Poerzgen said. The Committee on Eastern European Economic Relations, she added, "makes a huge effort to create the impression that Russia business is Germany's most important issue."Nevertheless, the publicity -- together with lavish Gazprom spending on public relations, parties for Berlin's great and good, and funding of amusements parks and Russian language lessons in schools -- appears to be influencing German public opinion.Sponsoring the Schalke soccer club in North Rhine-Westphalia has been especially popular. "They're very successful in creating an image of being a nice sponsor, of being like other companies," Poerzgen said.Energy expert Kirsten Westphal of the Institute for International Security and International Affairs, which advises the government, said she believes the PR effort also indirectly affects foreign policy. "E.ON Rurhgas and Wintershall are powerful lobbyists for the strong bilateral relationship with Gazprom," she told me.When E.ON and BASF opposed the EU's proposed liberalization measures that so exercised Putin in November, they employed the standard argument that its passage would hinder long-term investment.A warning from Rahr, of the German Council of Foreign Relations, is starker: If the EU doesn't "compromise" on its "very utopian" plans, gas-producing countries will be forced to defend their interests by forming cartels. "That will lead to confrontation" and encourage Russia to sell its gas elsewhere, principally in Asia, "which would be not very good for us."Rahr also praised Russia for opening its energy market to Western investment. "Before the global financial crisis, Russia's oil and gas-drunken elites thought everything would play in their favor, that they don't need Western technology. Now they want to bring in Western companies in force."But Westphal disagreed. Like many others in Moscow, she said there's little evidence of any significant change in Russia, which so far has allowed little more than symbolic investment in Gazprom and other companies the Kremlin considers strategically important.Foreign Policy LiteObservers of German politics say there's little concern about Moscow's influence in Berlin because few understand what's really going on in Russia. Journalist Poerzgen told me most politicians, even those who help formulate foreign policy, are engaged with it only superficially: "Despite Germany's new responsibilities since reunification, its view of the world is becoming increasingly provincial."Moscow's hulking consulate -- built in the 1950s with an unmistakable Stalinist stamp in a tony part of former East Berlin -- boosts the very visible presence of Russian speakers in Germany. The 3 million of them, who comprise the second-largest group after the Turks, help influence attitudes toward Russia. Their number includes many ethnic Germans who left the Soviet Union after the communist collapse and wealthier recent migrants who have given the upscale neighborhood of Charlottenberg in downtown former West Berlin the new moniker "Charlottengrad."Rolf Fuecks, director of the Heinrich Boll Foundation, a think tank connected to the Green Party, told me many Germans still feel guilt toward Russia for their country's role in World War II. "There's a sense we should avoid conflict at any cost," he said of the feelings, said especially to affect Schroeder, whose father died in the war.His views and those of other older SPD members hold sway inside the party partly because many young prospective members have joined the Green Party instead, depriving the SPD of a "normal change of generations," Poerzgen said.But she added that all parties are affected by a traditional sensitivity about being seen as "fighting too hard" for Germany's interests abroad. That's something the Russians have been able to exploit. "Whatever your opinion of Putin," she said, "he's clever in thinking in global terms, especially concerning long-term economic and political strategies. That's something politicians just don't do in Germany."Putin has been especially adept at employing a legacy of the Cold War: a network of former East German officials still doing Moscow's work in Germany. The number of ex-Stasi agents among its ranks, including Gazprom Germania's director of personnel and its director of finance, who was investigated in 2008 for allegedly lying about his past, is particularly disturbing to critics.But the best example of the Kremlin's use of communist-era intelligence agents for building modern-day Russia's state-controlled energy industry is Matthias Warnig. The director of the Nord Stream consortium is a decorated former Stasi officer who "The Wall Street Journal" reported as having helped Putin recruit spies in the 1980s, when the future president was a young KGB operative in the then-East German city of Dresden.Warnig has denied working for the Stasi, and although he's said to have been close to Putin since their Dresden days, the Kremlin maintains they first met in the 1990s, when Warnig moved to St. Petersburg -- where Putin was a top city administration official -- to open an office for Dresdner Bank.Dresdner played a role in the state takeover of Mikhail Khodorkovsky's Yukos oil company in 2004, when the bank's investment banking arm valuated Yukos assets for the government. Later sold to an unknown shell company in a rigged auction, those assets were eventually acquired -- with the help of a loan from the same Dresdner Bank -- by state-controlled Rosneft, which became Russia's biggest oil company.Most Germans don't suspect the old Stasi connections still exist, journalist Roth said. But "Gazprom couldn't have been as successful without them."EU RoleAlthough the Economics Ministry is supposedly primary in formulating energy policy, economist Claudia Kemfert of the German Institute for Economic Research told me there was "no energy policy" under Schroeder. "Instead there was a government that protected the energy companies and didn't regulate the market," she said. "But that's changing." So are attitudes to the EU.Parliamentary elections in 2009 ended the grand coalition of the Christian Democratic Union (CDU) and the SPD in favor of a new junior partner, the free-market Free Democratic Party (FDP). Their agreement dropped any mention of a "strategic partnership" with Russia, a change FDP member Michael Link said represented a "sober, pragmatic approach."Link occupies the middle ground in the German debate on Russia. "It doesn't mean we don't want a strategic relationship," he told me. But "it's a goal, not reality." A polyglot former interpreter who's one of the Bundestag's top Russia experts, Link believes energy policy shouldn't be made solely on a national level.The arrival of a new German energy commissioner in Brussels last year, a top CDU member named Guenther Oettinger who is former head of Baden-Wurttemberg, has boosted his hope for a bigger EU role.Link praised Germany's domestically embattled foreign minister -- FDP leader Guido Westerwelle, who lost the party leadership since we spoke -- for seeking consensus among smaller EU members Schroeder's government all but ignored.That development reflects dramatic improvement in ties with the Czech Republic, Poland, and other former Soviet Bloc countries that have traditionally been among Russia's most vocal critics, partly because trade between Germany and those countries is booming, dwarfing business with Russia.Germany sells more to the Czech Republic alone than to Russia, while imports from the Czech Republic, Poland, Slovakia, and Hungary amount to 40 billion euros a year, compared to only 15 billion euros from Russia, including its energy.Ties between Germany's Central European neighbors and Russia are also slowly improving, helping shift the postcommunist dynamic of relations in Central Europe. Even attitudes toward the Nord Stream pipeline, once a lightning rod in the split between "Old" and "New" Europe, have changed.Pipeline WarsScheduled to be completed at the end of next year, the Gazprom-controlled Nord Stream pipeline will cost an estimated 7.4 billion euros. Advocates say the 49 percent stake in German, Dutch, and French hands will ensure the security of supplies to Europe. "It's a European, not a German project" that won't lock Germany into greater dependence on Russia, said Lindner of the Committee on Eastern European Economic Relations. Others argue Nord Stream's structure reflects the Kremlin's energy plan, not a unified European one.The Green Party's Fell said far from ensuring European supplies, Nord Stream will enable Moscow to stop deliveries to Poland and other countries at will and "sell gas to those who pay more. We've seen it already [in 2009], when people in Romania and Bulgaria were freezing when it was minus 30 degrees. That's terrible for the people."But Germany's importance to Russia as a beachhead for its strategy across the continent lies in more than just Nord Stream. One of countless Gazprom-controlled or connected companies selling energy and channeling money through opaque schemes, Gazprom Germania holds shares in at least 25 more subsidiaries and joint ventures in England, Italy, Turkey, Hungary, and elsewhere.One recent deal was particularly telling. In 2008, the company joined Centrex -- the obscure Austrian-based Gazprom subsidiary -- to buy a 20 percent stake in a gas storage site in the Viennese district of Baumgarten. Not just any such facility, Baumgarten had been selected to serve as the end hub for a rival project.The $11 billion Nabucco pipeline, launched in 2002 by energy companies from Austria and other countries, plans to transport gas from fields in the Caspian Sea region and Central Asia along a route that avoids Russia. Supported and partly financed by the EU, Nabucco is seen as an important symbol of cooperation that would push back against Moscow's efforts to split EU unity.But it languished until Russia's gas cutoff to Ukraine, which deprived millions of heat during a bitter cold spell because 80 percent of Russian supplies to the continent cross Ukraine's Soviet-era pipeline network.Schroeder's foreign minster, former Green Party leader Joschka Fischer, gave Nabucco another boost in 2009 by becoming an adviser. Still, Nabucco's uncertain future depends on whether enough gas-producing countries sign on.Nowhere is that better understood than in Moscow. Although the pipeline wouldn't come close to meeting Europe's growing demand for gas, the Kremlin is taking Nabucco as a serious challenge.Gazprom, which already owned 30 percent of the Baumgarten facility, bought the additional 20 percent as part of a project for building a hugely expensive second major pipeline to Europe along roughly Nabucco's route, a project even Gazprom supporters call "political.""The Russians want to show their muscle by stopping Nabucco," said Alexander Rahr, who doubts the $15 billion Russian project, called South Stream, will be completed.Nevertheless, Moscow is busy buying up gas in Central Asia and the Caspian in a bid to starve Nabucco, while publicly ridiculing the rival project. "It's useless and dangerous," Putin said last year, "to build a pipeline without having supply contracts."Meanwhile, Putin has headed a remarkable diplomatic offensive that has delivered a succession of deals with energy companies in eight European countries, including some participating in Nabucco. BASF has also joined, and the Kremlin has invited E.ON. But even as the pipeline wars heat up, experts are increasingly questioning their rationale.Changing MarketNow accepted as inevitable, Nord Stream no longer generates heated opposition from formerly fierce critics. Even Poland is now considering taking part. Andreas Schockenhoff, a CDU member of parliament who serves as a Russia envoy for the Foreign Ministry, told me the answer to fears the pipeline would strengthen Kremlin control is to build an integrated European gas market. "We have to be able to provide supplies to other countries if there's a political or technical problem with Russia," he said.But new developments in the global gas market have put the project under question. When Nord Stream was inaugurated five years ago, experts were predicting future gas shortages, but the current situation is "completely different," economist Kemfert said.New discoveries of gas in the United States, Middle East and elsewhere that are increasing global supplies and the advance of LNG -- liquefied natural gas that can be shipped anywhere by tanker -- are driving a burgeoning spot market for short-term gas deals.Together with the reduction in energy demand caused by the global financial crisis, those developments are driving down prices and transforming the global gas market. Although prices rose earlier this year as a result of the earthquake and tsunami in Japan, many economists believe the disaster will actually push prices down because of its negative impact on industrial production.Westphal speaks of a "power shift." "Before the global financial crisis, the Kremlin set the rules," she said. "Now gas markets are under pressure. It's amazing." Kemfert agrees, saying the Nord Stream pipeline is "unnecessary," partly because Russia isn't investing enough in gas production to ensure it will be adequately supplied.E.ON Rurhgas and other German companies are said to be questioning their decisions to sign long-term contracts for Russian gas, which is pegged to the rising price of oil. "I'm not sure how aware Russia is about this," Westphal said. Since bilateral contracts are negotiated in secret, it's hard to know how much the changing market is affecting relations, but many point to E.ON Ruhrgas's decision to sell its 3.5 percent stake in Gazprom in November 2010.Dismissing such concerns, Nord Stream spokesman Ulrich Lissek told me that "long-contracted" pipelines "stand for safety and stability in gas delivery." Others say despite recent developments, gas will inevitably grow more important as a "bridge" supply while wind, solar and other renewable energy sources slowly replace traditional fossil fuels. "Fifty percent of our supplies coming from renewables in 20 years is a nice dream," Rahr said, "but the next 20 years will be the era of gas."For now, the Kremlin is forging ahead with its old strategy, based on future high gas prices. "I'm not sure it will pay off," Westphal said. But whether changes on the gas market will undermine Russia's race to lock in European demand, she added, depends on "how quickly Europe diversifies and builds up an internal, functioning gas market."Too Special A RelationshipWith the changing gas market offering Germans their best opportunity to tack toward a strong, unified EU position, the debate about relations with Russia is growing increasingly serious. But whether it leads Berlin to pursue energy security by looking beyond its immediate national energy interests -- enriching the energy industry through a "privileged" relationship with Russia -- before it's too late to decide otherwise remains to be seen.How the struggle over energy plays out will affect other serious matters, including the advocacy of democracy in former Soviet republics, which Russia sees as part of its sphere of influence. The movement of Ukraine and Belarus back into Russia's orbit, at least for now, has caused the EU's Eastern Partnership plan for a future free-trade zone and visa-free travel regime for the EU and six countries on Russia's periphery to be put on hold, perhaps indefinitely."We're a really important voice, even if we Germans don't like to hear it, for Russia probably the most important in Europe," the Green Party's Marieluise Beck said. "Our voice on such issues is critical for Europe's future, but it's missing now. It's just too much of a special friendship." Copyright (c) RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.Kremlin grows concerned with military opposition: 12 July, 2011, 07:01Edited: 12 July, 2011, 07:07 By Sergey Konovalov The Defense Ministry’s personnel policy may be subject to revision in the near future. In the near future, Russian President Dmitry Medvedev will sign a number of decrees appointing army commanders to the Armed Forces. A high-ranking official in the Defense Ministry has informed Nezavisimaya Gazeta (NG) that these appointments are associated with a rotation of cadres declared by the Defense Ministry. At the same time, he says that personnel decisions regarding a number of generals of the Defense Ministry’s central command, including three high-ranking senior officers who wrote their resignation letters due to their disagreement with the course of army reforms (read NG 07.05.11 issue), have been “frozen.”??? This applies to the head of the Main Operations Directorate (GOU) and deputy chief of the General Staff, Lieutenant General Andrey Tretyak, the head of the Main Staff and first deputy commander-in-chief of the Ground Forces, Lieutenant General Sergey Skokov, and the head of the Electronic Warfare Directorate (REB) of the General Staff, Major General Oleg Ivanov.??? These military commanders submitted their resignation letters to Defense Minister Anatoly Serdyukov. NG’s sources say this was possibly done due to their disagreement with the military reform decisions that are currently being made by the chief of the General Staff, Army General Nikolay Makarov. NG’s publication of the news has received widespread attention, including from foreign media. Some of them even suggested the emergence of a so-called military opposition in the Defense Ministry. For example, Italy’s TMNews argues that “the uprising against Russia’s military reform has reached a high level.”?????? The Defense Ministry tried disproving NG’s report by announcing that the generals were retiring due to poor health. This has raised confusion among many in the expert community: Why are young, promising generals who previously successfully passed the required standard medical examinations suddenly falling ill – and all three at once? NG’s source in the Defense Ministry says that, “in the near future, the generals who have submitted their letters of resignation will be interviewed by HR representatives from the presidential administration, in order to reveal the true reasons for the young, promising leaders’ retirement from the army.”????? Meanwhile, NG’s source in military law enforcement argues that the Defense Ministry’s personnel policy has long raised questions in the Main Military Prosecutor’s Office.“Competent officers are retiring, while various offenders who have had to deal with representatives of the military justice system are being promoted to higher-ranking positions,” the source said. For example, an officer in the justice system provided NG, on the condition of anonymity, with case files on the current head of the Central Military District, Lieutenant General Sergey Surovkin. It turns out that Surovikin was under investigation in the State Committee for Emergency Situations (GKChP) case (read NG 07.11.11 issue). In September 1995, Surovikin, then a major, was found guilty by the Moscow Garrison Military Court under Article 218 of the Criminal Code (illegal arms and ammunition trafficking). While studying at the Frunze Military Academy, he was sentenced to one year of probation for trying to sell a gun. In other countries, similar offenses lead to the perpetrator being dishonorably discharged from the army. But in Russia, in 1995, Surovikin was sent into “exile” to the 201st Division in Tajikistan, to serve as the commander of the mountain infantry battalion.??? Now, as it is known, Surovikin is being promoted to the post of head of the Military Police of the Armed Forces. In other words, he will be in charge of law and order in the army and the navy.?? Here is another example: Just recently, a verdict by the military court came into effect sentencing a former head of the Main Indoctrination Works Directorate, Lieutenant General Anatoly Bashlakov, to seven years in prison for bribery. But recall how Bashlakov was appointed to this post. His name is associated with a tragic event in which two of his former subordinate officers beat a soldier at the Plesetsk Spaceport in 2007, leaving him to die in a dog kennel. The soldier died two weeks later in the hospital. Bashlakov was not the one punished, as military leaders had promoted him to become the main disciplinarian of the Russian army. A while later, however, a case was filed for bribery at the Plesetsk Spaceport, and the general was sent to prison.??? Another representative of disciplinary structures who was at one time found to be responsible for various incidents in Moscow’s Military District was also promoted. In July 2010, a mass brawl broke out between conscripts at the training grounds of a tank brigade near Naro-Fominsk.? The brigade commander who arrived on the scene was forced to separate the fighters by firing machine gun rounds into the air. According to the conclusions drawn by, as they say, “various competent agencies,: among other reasons the incident was possibly due to a lack of proper disciplinary action by the district headquarters, which was under the command of Colonel Vladimir Zharov. Recently Zharov was promoted to deputy troops commander of the Southern Military District. Personnel agencies gave a similar assessment of the work of the former commander of the Chita Railroad Brigade, Colonel Igor Golygin, who has been held administratively liable for various violations three times. There had also been some serious concerns about the financial and economic activities in his military unit. Despite this fact, in the fall of 2009 he was promoted to general and stationed in Komsomolsk-on-Amur.? Such examples are numerous. The Main Military Prosecutor’s Office cites a rise in service-related misconduct among officers. Meanwhile, individuals involved in these cases are often promoted. Incidentally, the promotions are given by presidential decrees – though personnel suggestions are, of course, issued to the head of state by the Defense Ministry.?? However, according to NG’s sources, the Defense Ministry’s HR policy will soon be subject to examination on behalf of the relevant structures in the presidential administration of Russia.Rumblings of political activism among Russia's bikers 11, 2011Alex Chachkevitch, the Moscow TimesBikers, who say they get the short end of the stick on the road, raised their voices when one of their own was seriously injured in a traffic accident.Leather. Hard rock. Disdain for traffic rules. Cruising on a highway. Wind in the face, and maybe the occasional beer belly. There are many associations with the biker subculture, but political activism is not on the list.?However, a recent display of bikers’ grassroots activism in Moscow — a rare but not unique event — has raised questions about whether the motorcyclists are capable of organizing to pursue political goals, much like car drivers have done.?During the protest last month, about 200 motorcyclists gathered in front of police headquarters to demand a thorough investigation into an accident earlier in the month when a luxury Porsche Panamera, driven by a Moscow businessman, crashed into biker Rauf Abzalov, 43, seriously injuring him.?The protesters, who cruised the Garden Ring before rallying on Ulitsa Petrovka, acted over fears that the crash investigation had stalled, event co-organizer Yury Nekrasov told The Moscow Times.?Police guards did not allow the bikers to enter the building but accepted their petition to police chief Vladimir Kolokoltsev — who, Moskovsky Komsomolets reported, was outraged by the unauthorized rally. No sanctions followed, however, and police briefed representatives of the biker community on the investigation’s progress two weeks later.?It appears that any biker discontentment has been laid to rest — for now. But bikers could become a force to be reckoned with in the months before the State Duma elections in December. Prime Minister Vladimir Putin has himself put the bikers on political footing by mingling with Moscow’s Night Wolves, Russia’s oldest and largest motor club.?“The number of motorcyclists is rising,” said Alexandra Korol, a co-organizer of last month’s protest, explaining what motivated the bikers. “Anyone of us could be in his place.”?Korol has a point because the number of road accidents involving bikers is also growing, if not by much. During the first five months of this year, Moscow police registered 322 incidents, slightly higher than 2010’s year-on-year figure of 317, said a spokesman for the Moscow branch of the Federal Road Agency.?"We also just got fed up with the?rising negativity toward bikers," biker Nekrasov said. "For some reason it's common practice to?automatically blame the?biker for?accidents. We didn't want the?driver to?get away with what he had done." ?The?grassroots protest was simultaneously proposed by?a handful of?regular bikers, including friends of?Abzalov, who discussed the?story on?web forums for?motorcyclists, Nekrasov said.?While the?bikers won their desired results, Vyacheslav Lysakov, head of?the Svododa Vybora (Freedom of?Choice) motorists rights group, said protesting outside police headquarters and?disrupting traffic was not the?right way to?express disappointment.?Bikers should have simply written a?letter to?the prosecutors in?the case, said Lysakov, who is a?member of?the All-Russia People's Front, a?new public group created by?Putin in?May.?He said the?motorcyclists won't become an?active political force until they join an?existing organization like the?All-Russia People's Front through which they could integrate with the?political system and?receive representation in?the Duma. ?"Why scream under the?window when you can enter through the?door?" Lysakov said.?Motorcyclists are not a?political group, and?what unites them is their love for?the bike, said David Konstantinovsky, director of?the Center of?Sociological Education, Science and?Culture.?Still, many of?them are young and?active and?ripe for?being drafted as a?force in?politics, he said.?No opposition group has expressed interest in?bikers, and?the organizers of?the bikers' protest insisted that they did not having any political interests guiding them. Other motorcyclists agreed?— even those who themselves rub shoulders with politicians.?"We do not want to?get into?politics," said Alexander Zaldostanov, who heads the?Night Wolves biker club. "And we do not need any perks."?Zaldostanov, known by?the nickname "Khirurg" ("Surgeon"), had met Putin several times, including in?Crimea last summer when Putin lead a?column of?motorcyclists to?a biker convention, riding a?tricycle himself.?Zaldostanov said he has only positive feelings and?the outmost respect for?Putin, calling him "the only one in?the government to?not be ashamed of."?But the?big wheel of?the Russian biker movement acknowledged that fellow bikers were going to?continue to?stand up for?their rights. ?Nekrasov also said he hopes motorcyclists will keep organizing protests if needed. "This is the?first time when the?wave of?activism is clear and?head-on," Nekrasov said.Although the?biker scene in?Russia is about 20 years old, it was not until recently that its members began to?dabble in?public activism.?About 100 Kaliningrad bikers protested against increased tariffs on?motorcycles in?December 2009, and?about 60 of?them canceled their motorcycle registrations altogether. Two months later, the?bikers joined a?rally of?12,000 people unhappy with the?economic policies of?then-Governor Georgy Boos, who eventually lost his job.?In?recent months, bikers have also united with car drivers to?protest rising gas prices in?several regions, including Chita in?eastern Siberia.?Their efforts are not a?complete surprise because other social groups have also taken up public activism. Other examples include teachers, who protested education reform in?Moscow in?June, and?football fans, some 5,500 of?whom rallied in?December on?Manezh Square after accusing police of?mishandling a?murder investigation.?"People who were previously on?the sidelines are stepping up," said Andrei Dozorov, leader of?the Blue Buckets, a?motorist group that opposes the?abuse of?flashing blue lights on?government officials' cars. "They are seeing that results can be achieved through rallying."?Dozorov cited a?recent Blue Buckets victory in?which a?court took away the?license of?a driver at?the Defense Ministry who in?May rammed his car with a?flashing blue light into?another vehicle in?Moscow and?fled the?scene.?But he also said the?authorities' newfound toleration of?unsanctioned public protests might be a?pre-elections stunt. Indeed, the?government gained a?reputation in?the 2000s for?cracking down on?any and?all unsanctioned protests.?"It may just be a?way to?improve its image and?show that it cares about its people," Dozorov said.?When the?elections are over, the?crackdowns may return, he said.?The article was originally published in the Moscow Times.Moscow to more than double in size 12, 2011Some details of an ambitious plan to more than double the geographic boundary of Moscow, extend metro links to Skolkovo, and build an international financial centre in the Rublyovo-Arkhangelskoye district - outside the current city limits to the west - were reviewed by President Dmitry Medvedev on Monday, reports The Moscow Times.Medvedev ordered Moscow's mayor and the governor of the Moscow region to draft a plan that aims to reduce traffic congestion and support the IFC plan. The idea will see the Russian capital expand its borders into the surrounding Moscow Region, from which millions commute each day. One of the leading elements in Medvedev's plan is to move federal government agencies out of the city center. The two officials were originally given a deadline of July 10 to deliver a proposal.Mayor Sergei Sobyanin told reporters that the proposal would see Moscow grow 2.4 times to 251,000 ha from its current 107,000 ha. The expansion will scoop up large swathes of the Moscow region, mainly in areas to the west, southwest and south of the city."The place in question is a large strip of land from Varshavskoye Shosse to Kievskoye Shosse and to the railway ring line in the southwest," Sobyanin said after meeting with Medvedev and Moscow region Governor Boris Gromov at the president's Gorki residence outside Moscow, Interfax reported.Gromov said an international financial center might be set up in the upmarket Rublyovo-Arkhangelskoye district west of Moscow. "An initial proposal was made to move in that direction," he told reporters. Sobyanin stressed that the plans were preliminary and no financial figures were available. He also said it remained unclear where government agencies might be relocated to.The proposal also envisages a metro station being opened at the Skolkovo innovation center, the Red Line being extended from the Yugo-Zapadnaya station to the Troparyovo and Rumyantsevo districts and the Gray Line to the Yuzhnoye Butovo district, Interfax said, citing a statement from the Moscow and Moscow regional administrations.VTB Capital writes: Vedomosti has summarised the proposals of Moscow Mayor Sergey Sobyanin and Governor of the Moscow Region Boris Gromov to extend the boundaries of the City of Moscow, thereby increasing the capital by 2.5 times, with residential and commercial construction within 1,500km2 to the south of the city between Kievskoye Highway and Varshavskoye Highway. The new area can accommodate as much as two million people and is suitable for the construction of 105mn sqm of space (60mn sqm of residential and 45mn sqm of commercial). According to preliminary estimates, the project could be finalised by 2020.Gromov and Sobyanin also suggested including Skolkovo and Rublevo-Archangelskoye (to the south-west and the north-west of the capital, respectively) into Moscow.Our View: The proposal to develop outside of Moscow is in line with the recently adopted plan to ban new construction within the Third Ring Road. If agreed, it would be the largest development in Moscow in the last twenty years, implying 10mn sqm of completions annually (assuming 2020 as a final year of development). We note that this figure is double the average annual completions in Moscow in the last three years.According to our calculations, the construction costs alone (excluding infrastructure) could reach USD 160bn, meaning some USD 18bn is to be spent each year in the city.We think it is too early to draw any conclusions as the project is likely to be discussed for a while, with potentially significant changes to the scope and timing of the project. Were it to be adopted, though (even on a smaller scale), that would materially increase the amount of construction in the city, both residential and infrastructure, and serve as a cap on price growth for residential property.Why is Medvedev Moving the Capital Outside of Moscow? 11, 2011Vladimir Frolov, Russia ProfileRussia’s President Dmitry Medvedev has ordered the government to move all government agencies and their employees out of Moscow to a designated area in the suburbs (to be determined at a later date) which, together with the city of Moscow, would constitute a new and unique federal district. What does Medvedev hope to achieve by such a move in Russia? What would moving the capital out of Moscow mean for the Russian state? How would this impact Russian federalism? Would this really ease the horrendous traffic in Moscow? Would such a move be enough to make Moscow an international financial center? Would this move make Medvedev more popular and stamp his name in Russian history?Contributors:?Vladimir Belaeff,?Elena Miskova?Medvedev’s official rationale for this decision was to ease the gridlock on Moscow’s roads and improve living conditions in the Russian capital to make it a better, cleaner and more attractive place for foreign investors and financiers. Encouraging these professionals to move to Moscow is an essential part of the strategy to make the Russian capital a major international financial center – a long time pet project of Medvedev and his liberal economic advisors.Many major foreign investors have complained to Medvedev that horrendous traffic jams in Moscow make it an unattractive destination to do financial business.?Despite the removal of former Moscow Mayor Yuri Luzhkov, it seems there is little that new authorities could do to make any drastic improvement in the road situation. Moscow’s downtown, which houses almost all government buildings, is indeed a very crowded place, with little room for organic growth and construction of modern freeways. Moving government offices out of central Moscow beyond the Garden Ring would probably easy many of the traffic problems.Medvedev, however, has opted for a much bigger relocation. He has basically proposed building an entirely new Russian capital in the Moscow suburbs. The last time the capital was moved out of Moscow was under Peter the Great, who built a “European Capital” for Russia in St Petersburg. Medvedev has not proposed anything of that magnitude, yet the significance of creating a special capital for government workers will not be lost on anyone. It is an innovation for Russia.Building a special city to house government institutions is not a novel idea. Many major and prosperous states have done a similar thing – the United States, Canada, Australia, Brazil, Malaysia, the former West Germany (out of the political necessity of dealing with partition, of course), as did the less-successful Pakistan. In the Former Soviet Union, Kazakhstan moved its capital from Almaty in the south to Astana in the north to compensate for geographical divergences that were undermining the cohesiveness of the new state. Last week, Georgia made a decision to move its parliament out of the capital Tbilisi to an important provincial center Kutaisi.Well, it’s been done before with varying degrees of success, but what does Medvedev hope to achieve by such a move in Russia? What would moving the capital out of Moscow mean for the Russian state? How would this impact Russian federalism? Would this really ease the horrendous traffic conditions in Moscow? Would such a move be enough to make Moscow an international financial center? Are there significant political implications for Russia in Medvedev’s decision? Would this move make Medvedev more popular and stamp his name on Russian history?Vladimir Belaeff, Global Society Institute (USA), San Francisco, CA?The suggestion that Medvedev has “moved the capital out of Moscow” seems to be infused with a bit of summertime madness, or with a kind of excitability and nervousness, which are deliciously curable with a tall, well-iced gin-and-tonic.What is proposed is the migration (at a future date) of many government administrative offices and staff to a not-yet-built campus some distance from the Kremlin. While there are many departments that would benefit from such a move, others cannot realistically change location for different logistical, technical and security reasons.In Washington DC, the Pentagon is located some distance away from the center of the city. Louis XIV had his offices in Versailles. In neither case was the capital city of the country (in those cases Washington and Paris) “moved.” There is no reason why many of the administrative offices, currently scattered in central Moscow, should not be conveniently relocated to a custom-made campus in the suburbs. This is not “moving the capital of Russia.”Moscow is an old city, though certainly not as ancient as Rome, Athens, London or Paris. Moscow is overpopulated. The building frenzy of the past two decades occurred without any consideration for infrastructure such as roads, mass transit or automobile parking. Every skyscraper added to the center of Moscow means tens of thousands of additional people (occupants and service staff) who will crowd into the city to either work in the new building or service its operation.Moscow’s bloating began even before 1917, but skyrocketed in Soviet times and much of this growth was caused by the ugly deformities of Soviet society. The countryside was desolated and survival in cities was much easier than in villages. Marxism in any case is an urban creed: Karl Marx hated villages and farmers, and so did Lenin.Furthermore, Moscow, Leningrad and Kiev were cities, which were given top priority in receiving very scarce basic supplies. Even in the late Soviet period, enterprises 200 kilometers away would send employees on “shopping expeditions” to Moscow – to buy basic necessities like sausages, clothes, shoes, and toilet paper. Everyone tried to move to Moscow, and many succeeded. Add to the Soviet-era population growth the explosive growth of automobile ownership (a tangible proof of growing living standards in the post-Soviet era) and the aforementioned irresponsible construction of huge office buildings – and urban congestion is inevitable. One sometimes wonders why the traffic in Moscow moves at all. It must be all the local saints praying for their modern descendants.Thousands of Russian government officials of various ranks get stuck in those traffic jams, either on their way into the offices, or travelling between offices for meetings. The damage to productivity of an already creaking governmental machine is definitely significant. Thus the motivation to consolidate offices and to place them outside the congested center of Moscow is rational, realistic and not surprising.?There may be fewer “migalki” – the blue lights on cars that allow high-ranking officials to flout basic traffic rules – on the Moscow roads as a result. There may be one undeclared intention: to give Russian bureaucrats fewer opportunities to be de facto absent without leave from work. (“Ivan Ivanych has just left the office en route to the Kremlin” is announced at one end of the journey and simultaneously “Ivan Ivanych has not yet arrived from the Kremlin” is announced? at the other, while Ivan Ivanych is in reality swimming in some pond…). Now Ivan Ivanych will always have to be within walking distance of his desk, and might have to take up bicycle riding on campus, which might improve his longevity and humor…There is no reason for paranoia. Medvedev did not “move the capital” – but he is proceeding with modernization…Elena Miskova, Managing Partner, LEFF GROUP Government and Public Relations, MoscowPresident Medvedev’s initiative to relocate the seat of the Russian government out of the city of Moscow to a suburban location raises many serious questions, although it is a very important and vital initiative, with game-changing implications.It remains a mystery what the President meant by proposing to set up a special “Capital Federal District.” Does it mean a separate Federation subject, carved out from territory belonging to the city of Moscow and Moscow Region, with special and peculiar constitutional rights and forms of political representation as is the case with the District of Columbia in the United States (it cannot elect members of Congress and senators and its budget is approved directly by the US Congress, although it does elect a mayor and a city council by popular vote)? Will it be headed by another unelected Presidential Envoy (which would destroy the political power of the mayor of Moscow)?Both Moscow and St.Petersburg are already “federal cities” – they are separate Federation subjects in and of themselves, although calls for their integration with surrounding “oblasti” (neighboring regions which are also separate Federation subjects) are raised with increasing frequency. St. Petersburg is already the seat of Russia’s Constitutional Court and the operations command headquarters of the Russian Navy. So what would the “special status” of the proposed Federal Capital District mean in practice? This is a key issue, given the increasing political and administrative weakening of the Federal Districts as a layer in the Russian government administration of its regions. The Federal Government, particularly the Ministry of Finance and the Ministry of Regional Development, are much more important players than the Federal Districts and the Presidential Envoys who head them.Some experts argue that Moscow needs to grow significantly, perhaps by as much as 100 kilometers in diameter, in order to get rid of the transportation gridlock and reroute most of the transit cargo traffic through neighboring regions. This would require the abolition of the Moscow Region as a Federation subject with outlier suburbs being transferred to neighboring regions Tver, Kaluga, Vladimir, and Yaroslavl.What specific government agencies will be relocated to the new “seat of government”? Will the President and the Prime Minister also move out of the Kremlin and the Russian “White House”? Will the Presidential Administration relocate as well? What about the Defense and Foreign Ministries, as well as special security services with their sophisticated secure communications networks? What about the Duma and the Federation Council?Some experts say that the Kremlin and surrounding neighborhoods will have to continue to serve as the seat for the President and his Administration – perhaps to instill fear and respect by virtue of location. The same logic argues for keeping the MFA where it is now – in the monstrous and aging Stalin skyscraper on Smolenskays Sennya (you cannot order the relocation of foreign embassies to locations 50 miles from downtown Moscow).If that is the plan, then moving the government to a location beyond the Moscow Beltway (MKAD), makes little sense and could probably result in more congestion downtown (where today a government bureaucrat could take a brisk walk or take the Metro, tomorrow he will have to drive 20 or 30 miles to attend an interagency meeting at the Presidential Administration a block from the Kremlin).Will the government bureaucrats move to live in the “Federal District” or will they commute every day in and out of Moscow (which simply will change the traffic gridlock patterns without eliminating the gridlock)? How much new office and residential space needs to be built to accommodate the “seat of the Russian Government”?Why are they now calling for building the International Financial Center in the suburbs? And what would it look like? And could it really be ordered into existence in a place where the largest financial transaction has recently been limited to purchasing a plot of land or a home?Medvedev’s initiative, although necessary, is a good example of how big government decisions are made in Russia today – with little preparation, almost no research and no interagency debate, resulting in a set of different options presented to the President for his decision. This results in questions that are left hanging in the air.Could Energy Resources Cause Russia to Spark a Naval War in the Caspian? Dr. John C.K. Daly | July 11, 2011 3:38 PM GMTIn the past three decades the Islamic Republic of Iran has developed a well-earned sense of paranoia. First, in September 1980 Saddam Hussein invaded Iran in what he thought would be a quick military victory, but which quickly turned into an eight-year bloody slugfest, leaving an estimated 500,000-1,000,000 dead before the guns fell silent.More recently Iran has been subjected to increasingly militant rhetoric from both Tel Aviv and Washington over its civilian nuclear energy program, with thinly veiled threats of possible military action if Tehran does not abandon its efforts, even though they are completely complaint under the terms of the Nuclear Non-Proliferation Treaty (NPT), which Iran has signed.Now however, potential is brewing for Iran from an unexpected direction - the north.Russia is sharply increasing its military presence in the Caspian. Russian Federation Navy Commander in Chief Admiral Vladimir Vysotskii has stated that Russia's Caspian Sea Flotilla will receive up to 16 new ships over the next decade, while some aviation units will be transferred to the Navy from the Russian military's southern operational-strategic command. What has really got to have the mullahs in Tehran fingering their worry beads however is Vysotskii's promise to provide the Caspian Sea Flotilla with Bastion shore-based missile systems armed with Yakhont hypersonic missiles, which are designed to destroy surface targets at distances of up to 200 miles. Russia's Caspian Sea Flotilla flagship, the Tatarstan frigate, is already the most powerful vessel on the Caspian, armed with Uran missiles with a range of 100 miles. Later this year the Tatarstan will be joined by a sister ship, the Dagestan.The Caspian Sea Flotilla is also taking delivery of the first in a series of new Project 21631 Buyan-M-class rocket-artillery ships, along with three amphibious assault ships.The Iranian Navy has a total of approximately one hundred, mostly small combat and supports ships on the Caspian. They include three Iranian-made midget submarines (of a North Korean type that can transport a group of combat divers and have a range of 1,200 miles), an outdated Salman-class minesweeper (American-made), and patrol cutters.Russian analysts believe that Iran however has the ability to increase its Caspian naval forces by 50 percent in short order by relocating craft from the Persian Gulf.As for the other Caspian littoral states - Azerbaijan, Turkmenistan and Kazakhstan, their naval forces are negligible, to be polite.So, why is Russia beefing up its naval presence?The most likely reason is the one that has bedeviled the region for the last two decades - a final treaty delineating the ownership of the Caspian's offshore waters and seabed has yet to be signed. While Moscow and Tehran might agree about keeping the U.S. locked out of exploiting the Caspian's energy resources, worth an eye-watering $3 trillion, they remain at loggerheads over the issue of dividing the Caspian, with Russia insisting that each nation receive offshore waters in proportion to its coastline, while Iran insists that all five nations receive an equitable twenty percent apiece. Under the Russian definition Iran's share would be 11-13 plicating the issue is that international law has yet to definitively designate whether the Caspian is an inland "sea" or a lake, an adjudication which has enormous implications for both the applicability of the 1982 U.N. Convention on the Law of the Sea and negotiation of the boundary demarcation regime affecting the littoral states' rights to significant undersea oil deposits.Ironically, Iran has itself played the "gunboat diplomacy" card in the past. On 23 July 2001, an Iranian warship and two jets forced two Azeri research vessels, the Geofyzik -3 and the Alif Hajiyev, operating in what Azerbaijan calls the Alov oilfield on behalf of BP-Amoco, to leave the field where they were conducting surveys, which lies 60 miles north of Iranian waters. BP-Amoco immediately announced it would cease exploration activities and withdrew the research vessels. Azerbaijan denounced the move as a violation of its sovereignty and on 31 July charged that an Iranian reconnaissance aircraft had violated Azeri airspace and come within 90 miles of Baku. Ramping up the pressure, Iranian former Pasdaran Commander Mohsen Reza'i pointedly reminded Azerbaijan that the whole country had once been Iranian territory and that Iran might decide to take it back, even as the Iranian press speculated that the whole thing was a provocation cooked up by Azerbaijan who was scheming to bring about American intervention in the Caspian.In the unlikely event that hawks in Washington ever considered, then or now, to fly the Stars and Stripes on the Caspian while taking a few potshots at the evil Russkies or the even more perfidious Axis of Evil mullahs, then geography seems to have thrown a spanner in the works, as the Caspian's sole exit point, the Volga-Don canal, is controlled by... Moscow.What seems to be happening is that Russia has decided that gunboat diplomacy has its uses, and an upping of its naval presence in the Caspian might finally persuade Iran's obstinate mullahcracy that it's time to divvy up the Caspian pie according to Moscow's formula.And, after all, 11-13 percent of $3 trillion is no small chunk of change, even to an OPEC member.Source: . John Daly of Economic TrendsRussia Raises Privatization to Six Tln Rubles, Vedomosti Says Jason Corcoran - Jul 12, 2011 6:08 AM GMT+0200 Russia is to increase the size of its privatization program to six trillion rubles ($211 billion) from 2012 to 2016, Vedomosti reported, citing unidentified people who attended a meeting between President Dmitry Medvedev and businessmen yesterday. If approved, the new program will bring in revenue of 1.2 trillion rubles a year, according to one of the people cited by Vedomosti. The draft budget for 2012-2014 currently provides an annual income from privatization of 300 billion rubles, the newspaper added. To contact the reporter on this story: Jason Corcoran at Jcorcoran13@ To contact the editor responsible for this story: Gavin Serkin at gserkin@The Privatization Plan: More Ambitious, but Further Away BankJuly 12, 2011In response to President Medvedev's request to intensify the privatization process, the original list of 10 large companies to be privatized before 2015 may now be extended to 20 in total. The big news is that the cabinet is ready to fully exit 11 companies from the list. However, the deadline has been moved further back to 2017, and in some cases the state is willing to extract the present state functions from the privatized companies and/or maintain a golden share. The amended plan thus highlights the risk that the state is not ready to release its influence over the real sector.The FactsPrivatization list extended: After the president's recent request to intensify the privatization process, the list of 10 companies approved in November 2010 could be extended by another 10, according to the media. While Inter RAO, Alrosa, United Shipbuilding Company and United Aircraft Company represent new entries, Svyazinvest, Zarubezhneft, Sheremetyevo, Aeroflot, Transneft and MRSK Holding had already been under consideration for quite some time.State to fully exit from 11 companies: The new plan extends beyond previous plans, which contained only minority stakes for sale. At the same time, a number of counter-balancing amendments were also discussed, beginning with the deadline delay. Secondly, the state wishes to divide privatized assets in order to retain key responsibilities under the state's umbrella. Finally, for four companies on the list (see table) the state intends to maintain golden shares to control the companies' strategic decisions even after privatization.Extension of the privatization list lacks implications for the budget: The privatization discussion still plays little role in financing budget needs. Privatization revenues are expected to stay at around RUB300bn per year in 2011-2014, only 20% of the next year's budget deficit of 2.7% of GDP under $93/bbl oil prices.Our TakeMost of the new names are not really new: We believe the discussed amendments to the privatization plan are very long-term plays, especially given the deadline extension. Most of the new entries represent names that were considered previously but had not made it onto the original short list. The most notorious example is Svyazinvest, which has been subject to privatization rumors for the last 10-15 years. This suggests that the proposed enlargement of the privatization list is rather a technical response to Medvedev's request, at least for this time.Golden share approach will reduce value: While the intention to exit 11 companies is big news, the deadline seems distant and the state does not wish to release its influence completely. Maintaining golden shares, i.e. the right to state intervention in the companies' strategic decisions, is creating huge uncertainties for the four companies considered. The idea to divide state assets in the agriculture sector means that a state agency may be created to replace the companies at least in part, thus reducing the value of the assets.Implementation will depend on management interests: Our take on the recent changes is that the privatization plan creates risks that the state is willing to privatize companies without truly exiting supervision over the assets. In this case, we believe that privatization will proceed only in companies where management holds interest in the process. Sberbank seems the first and obvious candidate, while companies like Inter RAO and Aeroflot may follow. We are much less certain in the cases of the other names listed.Natalia OrlovaFitch reminds that the privatisation of CIS corporates might sometimes trigger negative rating actions 11, 2011VTB CapitalNews: Last week, Fitch released a commentary titled Privatisation of State- Owned Entities in Russia and Other CIS Countries May Have Negative Rating Impact. The rating agency reminded everyone that privatization might result in weaker state support and, consequently, negative rating revisions. Fitch preliminarily indicated that some 60% of rated state-owned companies could in theory be downgraded. At the same time, Fitch made a series of disclaimers explaining that reduced government participation might in many cases be rating-neutral (Gazprom is mentioned as one example).OurView: Fitch's comments do not come as a surprise, nor do they suggest any imminent rating actions. Hence, they will likely be ignored by the CIS bond market. The report contains a useful table as a reminder of the rating approach used by Fitch for rated state-controlled corporates. Unfortunately, it does not cover financial institutions.One important consideration omitted from Fitch's publication is that during the recent financial crisis, not only state-controlled corporates and banks from the region had access to financial aid provided by the state, but so did privatelyowned borrowers of critical size.Mikhail Galkin11 july 15:45 Prime Minister Vladimir Putin meets with economists from the Russian Academy of Sciences “We want to be appraised of every possible perspective. Even if at first glance they seem incompatible and diametrically opposed, I believe that we should be aware of all possible approaches to these issues. Only by holding a broad professional dialogue will we be able to find balanced solutions and eventually guarantee an effective programme of national development.” Vladimir Putin's opening address:Good afternoon,We've gathered here today to discuss economic issues. But, as you know, there was a terrible tragedy yesterday – a cruise ship sank on the Volga River. These people were vacationing with their families and children. It is already clear that dozens lost their lives. I'd like to express our support for the victims and my most sincere condolences to the families of those who were lost. Let us now take a moment to pay tribute to their memory. (A minute of silence follows, everyone stands.) Thank you.As I said, we've gathered here to discuss issues of national development. In attendance are members of the Russian Academy of Sciences' economics branch, prominent scholars, and representatives of the most diverse movements and schools of thought. We realise that the recent global economic crisis affected the agendas of many countries and seriously altered the course of world economic development. Today, we bear witness to gradual recovery in many countries and in the world's leading economies, but there are still many challenges we have yet to face. Some measures have been taken, but they are only stopgaps. Their inadequacy as a lasting solution is borne out by problems in the labour market and continuing financial trouble in some European economies. We see how difficult these issues are and the kinds of social effects they produce. People are extremely worried and far from ready to sacrifice their immediate interests in order to address medium-term, not to mention long-term problems.We were beset with problems during the crisis as well. Needless to say, we also sustained losses in many industries, but we still managed to keep our economy afloat, maintain key social institutions, and, most importantly, preserve our development potential.It is very important to scrutinise what happened in the world economy – to study the circumstances in which the crisis unfolded, find a cure, and draft measures to preventing such adverse developments in the future. We must make our national economies reliable and productive, and protect them against all kinds of negative factors, risks, and potential pitfalls. Practically every country in the world is now tackling these problems. Our government is no exception.As you know, we've decided to implement the Strategy for Socio-Economic Development up to 2020. I'd like to emphasise that we will continue pursuing its primary objectives: to improve the living standard and guarantee dynamic economic advancement through the introduction of innovation.This year, we expect our experts to draft specific proposals designed to help us achieve key goals in economic modernisation and the effectiveness of social services, government management, and budgetary spending. We must involve as many specialists in this work as possible. I'm referring to independent experts, representatives of the regions and of businesses, public associations, and, last but not least, academics. We want to be appraised of every possible perspective. Even if at first glance they seem incompatible and diametrically opposed, I believe that we should be aware of all possible approaches to these issues. Only by holding a broad professional dialogue will we be able to find balanced solutions and eventually guarantee an effective programme of national development.Your vision is of particular importance because you are engaged in fundamental research. You have the opportunity to look beyond the immediate horizon and calculate all possible outcomes. Therefore, I'd like us not only to discuss current economic issues but also look at the medium-term and at more remote perspectives.It goes without saying that such long-term forecasts can be a fruitless endeavour, but we can predict what will happen in individual industries based on the general trends of global markets and national economic development with a greater or lesser degree of accuracy. I'm referring to investments made in different spheres. Proceeding from how we manage specific industries, we can even look beyond the horizon of 20 years. I look forward to hearing such estimates today.Let's also talk about budgetary policy and macroeconomics as a whole. Now, after the crisis, it is important for us to set our priorities straight and considerably enhance the return on government investment. In this context, we should exchange our opinions on the following issues: which industries have the strongest trends towards growth and which industries can become the engines of our economy.Our next task is to ensure the expansion of balanced and stable development across our vast territory. We view all of our constituent entities with equal importance, but we understand very well that it is now critical to guarantee the dynamic development of Siberia and the Far East. The depopulation that has taken place there over the past few decades is a very dangerous trend, and we must do all we can to prevent it in the future. The relevant programmes and government commissions are in place, but they are strictly administrative and bureaucratic. We must study this issue more thoroughly and make comprehensive decisions on these territories. We must prevent all kinds of environmental, demographic, and social imbalances in this respect and correctly identify ways to build regional clusters and effectively use our natural resources.Our manpower potential is closely linked with this issue. The multiplication of enterprises and the expansion of production will require a more active policy on the labour market. This boils down to the development of the so-called human factor and is consistent with the implementation of our plans in healthcare, education and culture, or, in brief, with new living standards in Russia.I'd also like you to speak about integration. In the years since the collapse of the Soviet Union, we have merely been marking time. However, with the formation of the Customs Union and the Common Economic Space, economic integration in the post-Soviet space has now acquired a real outline.This morning, I talked with our Ukrainian colleagues, and I spoke just now with the Ukrainian president. Our government experts are actively analysing their proposal for a "3+1" arrangement: that is, the three members of the Customs Union – Belarus, Russia, and Kazakhstan – plus Ukraine. We are still unable to say what decisions this joint effort may produce. Our experts are actively reviewing the Ukrainian proposals, and I hope that future progress along this track will be important and beneficial to all parties. I'd like to hear your opinions on this score as well.That's everything I wanted to tell you before we begin.* * *Vladimir Putin's closing remarks:Let's bring things to a close. In conclusion, I'd like to say that today we discussed some truly fundamental issues. The country's future will largely depend on how we address them – and that is no exaggeration.To begin with, however, we must agree on our definitions. When talking about strategic planning, we are not at all referring to the Soviet-style economic planning of old. When speaking about excessive liberalism, we do not mean that we are against liberal values. Let's be frank: over the previous few years, our economic policy has been fairly liberal, and during the crisis we remained confident not only because of our accumulated reserves but because our economy had grown severalfold since the early 1990s.After the collapse of the Soviet Union and what took place in the decade that followed, our economy did not diversify as rapidly and broadly as we would have hoped. But take, for instance, the changes in agriculture: before, one could hardly speak of Russian agriculture so much as of dying villages. Now we have become the world's third largest grain exporter and are close to ranking second. We've seen similar achievements in other areas as well. All this helped us to surmount the very peaks of the crisis with confidence but it does not mean that we can continue to rely successfully upon what we have done in the past. On the contrary, we must look at today's realities and prospects for the future and then elaborate the most effective regulatory methods possible.First, I'd like to thank you all for today's discussion. Second, I'd like to ask you, Mr Glazyev, to make a brief report and you, Mr Fetisov, and your colleagues to draw up separate notes on regional policy, economic projects, and your proposals in that regard. Please, don't make them too long. Just get at the heart of the problem to which you would like to attract the attention of the government, making point-by-point notes on each issue. That will be more effective.Mr Glazyev, you used to be a minister, and you know that every document requires a note or resolution to make it work. If the note is too general, it will tumble about endlessly in the bureaucratic corridors. But if we separate each point, the effect may be seen much more quickly.Moreover, I hope that this is not our last discussion. After you have submitted your proposals, we will review them and decide on a format. Agreed? Business, Energy or Environmental regulations or discussionsRosinter Restaurants, Sberbank, Rosneft: Russian Equity Preview Marina Sysoyeva - Jul 11, 2011 10:03 PM GMT+0200 The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading. The 30-stock Micex Index fell 1.3 percent to 1,701.48. The dollar-denominated RTS Index dropped 2 percent to 1,919.08. OAO Rosinter Restaurants (ROST RX): Rosinter Restaurants is scheduled to issue its June trading update. The restaurants chain rose 0.8 percent to 370 rubles in Moscow. OAO Sberbank (SBER03 RX): OAO Sberbank plans to invest as much as $800 million to create a megacenter for data processing at the Skolkovo innovation center, RIA Novosti said yesterday, citing German Gref, chief executive officer of the Moscow-based lender. Russia’s state bank slid 2.7 percent to 102.41. OAO Rosneft (ROSN RX): Russia’s Finance Ministry is scheduled to give initial oil price estimates used to calculate export duties for August. Russia’s state oil producer dropped 1.6 percent to 235.51 rubles. To contact the reporter on this story: Marina Sysoyeva in Moscow msysoyeva@ To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@ Phosagro narrows range for London IPO – sources EDTMOSCOW, July 12 (Reuters) - Russian fertiliser group Phosagro has narrowed the range for its planned initial public offering and is on track to float at the mid-point of its forecast valuation, two financial market sources told Reuters.The company, scheduled to begin trading on the London stock exchange on Wednesday, narrowed the price range for shares to $13.75-$15.75 from an earlier $13.00-$16.50.The mid-point of both ranges is $14.75, valuing the group at around $6 billion. Phosagro hopes to raise at least $500 million from the sale of a 10-15 percent stake. (Reporting by Olga Popova, Writing by John Bowker, Editing by Maria Kiselyova) July 12, 2011 10:07Rosinter ups H1 sales revenues 9.1% TO 4.8 bln rubles. July 12 (Interfax) - OJSC Rosinter Restaurants Holding (RTS: ROST), one of the leading family-eatery chains in Russia, saw net consolidated sales revenues rise 9.1% to 4.847 billion rubles in the first half, a company press release says.June earnings totaled 819 million rubles, a 7.9% increase from 759 million rubles in June of last year.Cf(Our editorial staff can be reached at eng.editors@interfax.ru)Aeroflot CEO supports privatization CapitalJuly 12, 2011Event: In a Reuters interview yesterday (11 July), Aeroflot CEO Vitaly Saveliev said that he supports the privatisation of the airline, as previously proposed by the government. In his view, the process should begin in 2014 with the sale of 25% of the state-owned 51.7% stake. Saveliev confirmed that the company plans to consolidate the Rosavia assets by YE11, with the number of passengers carried by the joint company 50% greater than in FY10, at about 20mn people in 2011. He estimated that Aeroflot's organic passenger capacity growth, excluding subsidiaries, would be 28-30% in 2011. Aeroflot will deconsolidate its terminal debt (approximately $900mn) by YE11, resulting in a reduction in its net debt/EBITDA ratio from 2.0x currently, even after Rosavia's debt is included.Action: Neutral for Aeroflot in the short term, in our view.Rationale: We are positive about a gradual privatisation of Aeroflot. Management expects to fully demonstrate the synergies of the Rosavia merger by 2014. We do not believe privatisation will lead to a loss of preference from the state. At the same time, reducing the state's control will allow management to pursue more flexible policies, eliminating the need to fulfil social obligations (such as loss-making flights to the Far East) and provide financial support to the industry. In the short term, we do not expect this news to affect the share price, as officials have often brought up the topic of privatisation over the past year.Dmitry KontorshchikovJuly 12, 2011 11:57TMK boosts pipe shipments 16% in H1 to 2.2 mln tones. July 11 (Interfax) - Russia's TMK (RTS: TRMK), one of the world's top-three oil and gas industry pipe producers, boosted pipe shipments 16% year-on-year in H1 2011 to 2.2 million tonnes, the company said.Shipments rose 1% in Q2 2011 to 1.09 million tonnes.The company affirmed its forecasts that earnings before taxes, depreciation and amortization (EBITDA) and the EBITDA margin would not differ much in Q2 2011 from the $293 million and 18% seen in Q1 2011.Pr(Our editorial staff can be reached at eng.editors@interfax.ru) MMK Has 2nd Turkish Plant July 2011Magnitogorsk Iron & Steel's Turkish venture MMK-Atakas Sirketler Grubu will open a?galvanizing and?coating plant in?Dilovasi, northwestern Turkey, on?July 15, aiming for?more than 800,000 tons of?annual output and?$750 million of?sales, according to?a statement Monday.Magnitogorsk, owned by?Viktor Rashnikov, opened a?$2.1 billion steel plant in?Iskenderun in?southern Turkey with local partner Atakas in?March. It expects to?sell $2.5 billion of?hot-rolled coils next year from?the Iskenderun plant, Cem Ustun, sales manager for?MMK-Atakas, said May 10.(Bloomberg)MMK: Mr. Putin goes to Magnitogorsk 12, 2011Prime Minister to launch Mill 2000 at MMK on Friday. On Friday (15 July), MMK (MMK LI - Buy) will commission its new cold-rolling Mill 2000 with a capacity of 2 mln ton, which could supply steel products to foreign automakers (this weekend Russia will celebrate Metallurgist Day). According to media, Prime Minister Vladimir Putin will visit Magni- togorsk Steel Plant this Friday and launch the project. Mill 2000 is a stra- tegic project for MMK, which will continue the development of its high value-added product chain and will boost MMK's margins. Mill-2000 may add around $500-600 mln EBITDA to MMK in 2012-2013 and going forward. We believe the mill's launch could be a positive catalyst for the stock, which has recently underperformed the market and its sec- tor peers. As a trading idea, we recommend buying MMK shares ahead of Friday's event. Unique Mill 2000 Cold Rolled Steel Complex. Mill 2000 was the primary investment project for MMK, along with the steel plant (Atakash) in Turkey. Mill 2000 is designed to produce high-quality automotive cold-rolled steel for foreign carmakers, pro- ducing cars in Russia. The project is part of MMK's strategy to increase production of HVA products and substitute imports in the Russian markets, as currently, Ford, Volkswagen, Toyota and others are importing cold-rolled automotive steel from European producers due to the low quality of Russian steel products (almost all HR and CR mills in Russia were built in 1970-80). We esti- mate that the EBITDA margin of Mill 2000 products will be around 30-35% versus an EBITDA margin of 20% for MMK in 1Q11. Trading idea - Buy MMK shares ahead of Friday's event. We note that in July 2009, Putin also visited Magnitogorsk on Met- allurgist Day and commissioned another of MMK's strategic projects, Mill-5000 (1.5 mln tons of thick-plate capacity, designed primarily to supply LD-pipe producers). The launch of Mill 5000 received extensive media coverage and boosted MMK's share price by 35% in July 2009 (stock outperformed all other peers - see price chart below). After stock underperforming in 1H11 (MMK share price is down23% since April 1), we believe the launch of Mill 2000 will be positively perceived by the market and the stock has fairly good chances for a rebound over the next 2-3 weeks. We therefore reiterate our Buy recommendation on the name.SUEK and Russian Railways may also develop Tavan Tolgoi coal deposit CapitalJuly 12, 2011Event: Reuters last week published a list of companies granted access to the Tavan Tolgoi coal deposit project in Mongolia. The tender was conducted for the western Tsankhi block, which holds 1.2bnt of coal reserves (65% coking coal) and which has an estimated 30-year production life of 15mn tpa. China Shenhua will obtain a 40% stake in the project. A consortium of companies, which includes Russian Railways (RZhD), SUEK and major Asian steel and mining companies, will control another 36%, while Peabody will get the remaining 24%. The second part of Tavan Tolgoi will be developed by the Mongolian company Erdenes Tavan Tolgoi, which plans an IPO in 2H11.Action: The news is neutral for Russian coal names, in our view.Rationale: According to Reuters, the Mongolian parliament's approval on Tavan Tolgoi was expected before 11 July. We are not aware that the parliament granted approval before this date. The Mongolian government has previously stated plans to build a railroad to the Trans-Siberian Railway and only after that build a rail link to the Chinese border. The transportation shoulder from Tavan Tolgoi to Russian ports in the Far East is approximately 5,000 km in length, while China's nearest port Tianjin is 1,570 km away. Geopolitical considerations remain a top priority for the Mongolian government. RZhD was ready to offer special railway tariffs to compensate for the transportation disadvantage of supplying coal for the Russian border. We must wait for a final decision from the Mongolian government and official project capex/timing details before we can provide our estimates of Tavan Tolgoi's impact on the global coking coal supply-demand balance.Boris KrasnojenovRussian cable deal on horizon Europe/London, July 12, 2011 By Chris DziadulThe sale of Moscow-based Akado, one of Russia’s leading cable operators, has moved a stage closer. Vedomosti reports that that a meeting of the board of directors at Megafon is scheduled for mid July and that a deal to buy Akado could be wrapped up by the end of this month. The sale price – around $1.2 billion (€849.6 million), including debts, estimated at some $370 million as of the beginning of this year, though now apparently down to around $200 million – is apparently the same today as was reported half a year ago. Apparently under the terms of the proposed deal, Megafon would pay 70% of the sale price in cash immediately and the remaining 30% later, depending on Akado’s financial performance. Renova Industries, which is backed by Viktor Vekselberg, and Yuri Pripachkin, the current owners of Akado, have been looking to sell the company since 2009. Should the deal be finalised, Megafon, which is already one of the leading mobile companies in Russia, would also become the largest provider of broadband internet services in Moscow.Palfinger buys INMAN in Russia by Euan Youdale - 11 Jul 2011Austria-based Palfinger has acquired fellow loader crane manufacturer Ischimbajskie Neftianiye Manipuliatory, JSC (INMAN), based in Russia.INMAN is headquarterd in Ishimbay, the Republic of Bashkortostan, in the Volga region south of Russia. The company has two factories and has been a distributor of straight boom and articulated loader cranes since 1992. It has 415 employees and a €20 million (US$28 million) turnover.The company also offers a range of services from certification for the Russian market to maintenance and spare parts. It primarily supplies companies in the oil and gas industry."We were looking for a well-established and reliable partner based in the CIS area in order to establish local value creation. INMAN is a manufacturer of premium, reliable products and has a very strong and long-standing brand name. Its product portfolio is the perfect addition to the Palfinger products. The company's good market position allows us in particular to open up the Ural region," said Herbert Ortner, CEO of Austria-based Palfinger.INMAN will exist as a separate brand within the Palfinger group. The acquisition is still subject to the approval of the supervisory boards of both parties and the Federal Antimonopoly Service of the Russian Federation (FAS). Palfinger now has 50 dealers on both sides of the Urals.REFILE-UPDATE 1-Melnichenko cuts stake in K+S to less than 10 pct EDT(Removes duplicate dateline) * Stake declines from almost 15 percent in September * Melnichenko needs funds to exploit Urals potash deposits * K+S share price falls 1.9 percent (Adds further details, background) FRANKFURT, July 12 (Reuters) - Russian tycoon Andrei Melnichenko has cut his stake in German potash miner K+S to less than 10 percent, down from almost 15 percent since the last notification 10 months ago, as he seeks to fund the development of costly potash deposits in the Ural mountains. K+S said on Tuesday that investment vehicles held by Melnichenko including his EuroChem fertiliser group have reduced their combined stake to 9.9 percent. A K+S spokesman said he could not comment on Melnichenko's further plans. In October last year EuroChem walked away from negotiations to jointly develop with K+S or other foreign partners the Verkhnekamsk potash deposits in the Urals. EuroChem said at the time it was looking at various funding options, including an IPO, to fund the development on its own. In March another major shareholder, chemicals giant BASF (BASFn.DE: Quote, Profile, Research, Stock Buzz), sold its 10 percent stake in K+S, severing ties with its former subsidiary. (Reporting by Ludwig Burger; Editing by Greg Mahlich) July 12, 2011 12:20Russian fish harvest up 1.4% since start of year. July 12 (Interfax) - Russian fishing outfits have harvested 2.111 million tonnes of fish and other types of seafood year-to-date, 28,800 tonnes or 1.4% more than in the same period last year.Russian federal fisheries agency Rosrybolovstvo reported that fishermen had caught 1.446 million tonnes in Far Eastern waters - 79,400 tonnes more year-on-year. More than 1 million tonnes of that catch was Alaska pollock, although the harvest of this food species was 27,800 tonnes less than it was for the same period of 2010.The catch was up 50,300 tonnes at 368,600 tonnes in northern waters, with cod representing 189,900 tonnes of that (27,800 tonnes more year-on-year).The Baltic Sea produced 23,700 tonnes of fish for Russia (2,500 tonnes less year-on-year). The Baltic herring catch was down 700 tonnes at 5,800 tonnes.In the Black Sea and Sea of Azov, Russian fishing craft hauled in 17,100 tonnes of fish, 700 tonnes less year-on-year. The Caspian Sea yielded 20,200 tonnes, 200 tonnes more. The Caspian sprats catch totaled 900 tonnes versus 2,100 tonnes a year ago.Russian fishermen harvested 160,000 tonnes of fish and other seafood in the waters of other countries, 80,300 tonnes fewer year-on-year. The total catch was down 17,500 tonnes at 75,400 tonnes in convention zones and on the open seas.Cf(Our editorial staff can be reached at eng.editors@interfax.ru)Activity in the Oil and Gas sector (including regulatory)12.07.2011Russian Energy Ministry Forecasts Growth in Demand for Gasoline Russian Energy Ministry, slightly frightened by the lack of gasoline in the country, intends to ask governors for information in the demand for the fuel in their regions through 2015. the study is meant to determine whether or not Russia needs to establish oil product reserves. Setting up a reserve could be costly — according to Izvestiya.ru, fuel purchases could cost as much as $2 billion.The ministry intends to compare regional demand with forecasts for growth in demand in the industrial and agricultural sectors of the economy and even with weather forecasts. Based on this data, the ministry will develop a system for fuel reserves. "This is a widely-used practice around the world. Reserves are established in the USA, Norway, South Africa and Austria. And Norway, like Russia, is a big oil exporter", the ministry reported. Copyright 2011, Oil and Gas Information Agency. All rights reserved.Gas exports to Armenia up 8% in H1 , 12.07.2011, Moscow 10:39:46.Russia raised its natural gas exports to Armenia 8% year-on-year to 800m cubic meters in January-June, Russia's Energy Ministry reported today. This figure was announced at a meeting of the Russian-Armenian Economic Cooperation Commission. ??????The parties also discussed electric power cooperation. Specifically, the construction of a fifth unit of the Razdan thermal power plant in Armenia is about to be completed. Russian power company Inter RAO UES has received a 100% stake in the TPP according to earlier agreements. July 12, 2011 11:21CPC not planning to increase Tengiz-Novorossiysk pipeline expansion budget. July 12 (Interfax) - The Caspian Pipeline Consortium (CPC) has no plans to increase its estimated budget for the expansion of the Tengiz-Novorossiysk oil pipeline, the company said.The CPC expansion project, as approved by consortium shareholders this past December, figures a budget of $5.4 billion and provides for unanticipated expenses calculated on the basis of potential risks, the CPC said in a statement."According to the CPC plan for project financing adopted by shareholders, the main source is the company's own funds received in profits from core business activity. In the event of a short-term insufficiency of these funds during the project's implementation, use may be made of limited outside borrowing within CPC's borrowing capacity," the statement says.As reported, CPC began expanding the pipeline's throughput capacity in Kazakhstan on July 1. The consortium plans to increase capacity from 28.2 million to 67 million tonnes per year. The project will cost an estimated $5.4 billion, and the financing is fully backed by production by extraction companies holding share interests in the consortium under the 'pump or pay' scheme.CPC operates the 1,511-kilometer Tengiz-Novorossiysk oil pipeline. Its sovereign shareholders are Russia with 31% (managed by Transneft (RTS: TRNF) - 24% and CPC Company - 7%) and Kazakhstan has 20.75% (KazMunayGas - 19% and Kazakhstan Pipeline Ventures LLC - 1.75%). The other shareholders are: Chevron Caspian Pipeline Consortium Company (15%), Lukarco B.V. (12.5%), Rosneft-Shell Caspian Ventures Limited (7.5%), Mobil Caspian Pipeline Company (7.5%), Eni International (N.A.) N.V. (2%), BG Overseas Holding Ltd (2%) and Oryx Caspian Pipeline LLC (1.75%).Cf(Our editorial staff can be reached at eng.editors@interfax.ru)Russneft Chief Gutseriev May Buy Mari Refinery, Kommersant Says Jason Corcoran - Jul 12, 2011 6:39 AM GMT+0200 Mikhail Gutseriev, who heads Russian oil producer OAO Russneft oil, is in talks to buy the Mari refinery, in Yoshkar-Ola, for about $200 million, Kommersant reported, citing unidentified market participants. The transaction will be financed mainly through borrowed funds, in particular from Raiffeisenbank, the newspaper said. To contact the reporter on this story: Jason Corcoran at Jcorcoran13@ To contact the editor responsible for this story: Gavin Serkin at gserkin@ 12.07.2011TNK-BP Invests 2.3 Billion Roubles in Modernization at Saratov Refinery in H1 2011 invested over 2.3 billion roubles in modernization projects at its Saratov refinery in the first half of 2011, the company reported in a news release. The company will increase this sum of investment to? 7.5 billion roubles by the end of the year, Saratov Refinery General Director Aleksandr Romanov said during a news conference.The investment program at the Saratov Refinery for 2011-2012 is over $300 million. The program envisions building a 300,000 tons per year isomerization unit, reconstructing the hydrotreatment unit as well as other projects aimed at producing Euro-5 standards compliant motor fuels and increasing output from 6 million to 7-7.5 million tons per year.Copyright 2011, TNK-BP. All rights reserved.GazpromGerman EconMin: Gazprom can invest in German firms, Jul 11 2011BERLIN, July 11 (Reuters) - Russian gas monopoly Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) is free to take a stake in German companies as long as it complies with anti-trust rules, a German Economy Ministry spokesman said on Monday.German magazine Der Spiegel had reported on Sunday that the Chief Executive of German utility RWE (RWEG.DE: Quote, Profile, Research, Stock Buzz) would approve of Gazprom, the world's largest natural gas producer, taking a stake in RWE. [ID:nLDE768058] (Reporting by Erik Kirschbaum, Writing by Sarah Marsh) Russia's Gazprom in power cooperation talks with France's GDF Suez (Platts)--11Jul2011/1109 am EDT/1509 GMTThe heads of France's GDF Suez and Russia's Gazprom discussed Friday possible "cooperation" in the power sector, as well as covering current issues on the Nord Stream gas pipeline project, the French company said late Friday.GDF Suez CEO Gerard Mestrallet met with Gazprom Chairman Alexei Miller in Paris and also discussed future gas supplies from Russia to Europe, in the light of the Fukushima nuclear disaster in March. GDF Suez, France's dominant gas supplier, holds long-term contracts with Gazprom for gas flows from Russia out to 2030. GDF Suez has said it is trying to renegotiate these long-term contracts as it tries to untangle its procurement costs from oil indexed contracts, which have recently proved more expensive than prices in the wholesale gas market.The companies "discussed the additional gas volumes that Europe may need in the future, following the decisions made post-Fukushima events," GDF Suez said.Several European countries, including Germany and Italy, have turned their back on nuclear power since the Japanese nuclear disaster, raising the demand for gas-fired power generation.The companies also agreed that the Nord Stream pipeline will "be a guarantee of meeting the growing energy demand of the French and European consumers in the long term," GDF Suez said. The French company is to receive around 2.5 billion cu m/year of gas through the pipeline.--Robin Sayles, newsdesk@07/11/2011? Cooperation TalksGermany's RWE Mulls Gazprom as Major Shareholder energy firm RWE and Gazprom, Russia's largest company, have been talking about possible link-ups in the future that could include Gazprom buying a strategic stake in the company, SPIEGEL has learned.??German energy firm RWE and Gazprom, Russia's largest company, are considering far-reaching cooperation and RWE could imagine Gazprom buying a major stake n it.RWE head Jürgen Grossmann met Gazprom CEO Alexei Miller in Paris on Friday to discuss gas supply contracts but also the possibility of future link-ups, SPIEGEL has learned. Grossmann told confidants after the meeting that he could imagine the Russian giant taking a long-term major stake in the company. He aims to inform his supervisory board of the outcome of the negotiations in early August. Gazprom has supplied the German company with gas for years. Rising Costs Germany's decision to stop using atomic power by 2022 has left RWE in a difficult position. Grossmann has said that Berlin's decision to accelerate its nuclear power exit plans would leave the firm facing "several billions" of unexpected costs over the coming years. Adding to its costs, the German firm, a leading CO2 producer, will have to buy emissions permits starting next January. Gazprom also held talks with German energy firm E.on's CEO Johannes Teyssen on July 7 to discuss similar issues. However, relations between the two managers are said to be strained because of a long-standing conflict about high Russian gas prices. jas -- Der Spiegel and wire reportsNord Stream to counter Japan's gas takeupPublished: July 11, 2011 at 9:40 AMRead more: , July 11 (UPI) -- The Nord Stream natural gas pipeline could help address the energy deficit that resulted from Japan's nuclear disaster, executives said.Japan was forced to take on more shipments of natural gas when a magnitude-9 earthquake and tsunami crippled the Fukushima Daiichi nuclear power plant.Gerard Mestrallet, the chief executive officer at French energy company GDF Suez, welcomed his Gazprom counterpart Alexei Miller to Paris to discuss bilateral energy issues. Both companies are major shareholders in the consortium overseeing the Nord Stream natural gas pipeline.Construction on the Nord Stream pipeline started in April 2010 and it will pass through economic zones in Russia, Finland, Sweden, Denmark and Germany. The Nord Stream consortium said last month it was nearly finished laying the twin natural gas pipeline through the Baltic Sea to Germany."Parties discussed the additional gas volumes that Europe may need in the future, following the decisions made post-Fukushima events," GDF Suez said in a statement on the meetings.Read more: could contribute cash to JV with Renova , 12.07.2011, Moscow 10:49:24.Gazprom may pay in cash for its interest in a joint electric power venture with Renova, Viktor Vekselberg, chairman of Renova's board of directors, told reporters late Monday.??????Renova is to contribute its core power assets to the venture with Gazprom, he added. In reply to the question of whether he expects any obstacles from the Federal Anti-Monopoly Service, Vekselberg said that no problems are expected because the companies comply with the regulator's instructions.??????On July 7, Gazprom and Renova signed an agreement of intent to merge their power assets. Anti-Monopoly chief Igor Artemyev termed the deal unadvisable. IES Holding could sell gas pipes to Gazprom, Itera , 12.07.2011, Moscow 11:20:26.IES Holding, the energy arm of Renova, could offload its gas distribution assets to Gazprom and Itera, sources close to Gazprom told RBC Daily.??????Gazprom and IES Holding declined to comment on this report. Itera confirmed that such talks are being held. Itera is interested in gas distribution pipelines in the Sverdlovsk Region.??????The length of IES Holding's gas distribution pipelines exceeds 51,000 kilometers in Russia and Ukraine. They transport over 27.5bcm of gas annually to over 4m consumers. 12.07.201199 Percent of Sakhalin – Khabarovsk – Vladivostok GTS Line Welded's group of experts led by Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee finished a business trip to the Far East.Yuzhno-Sakhalinsk hosted a meeting on creation of the priority gas transmission facilities in the Far East as part of the state-run Eastern Gas Program implementation.Shaping of the Unified Gas Supply System in Eastern Russia creates the required conditions for sustainable socioeconomic development, growth in commercial output, gasification development, wealth and environmental improvement in a number of the Far Eastern regions.A high degree of readiness of the key facilities within the first Far Eastern Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS) was highlighted in the course of the meeting. By now, 1,333 kilometers (99 per cent) of the 1,350 kilometer long linepipe have been welded as part of the first startup complex, 1,277 kilometers have been trenched and buried. The sections constructed by now are being tested making 400 kilometers of the linepipe so far. Simultaneous efforts are being taken to construct operations bases for the Amur, Khabarovsk and Primorsky Line Pipe Operation Centers.The equipment has been fully mounted at the Sakhalin main compressor station with hydraulic testing of the gas supply lines performed. Preparations are underway to receive gas and launch the gas pumping units.Over 1,500 heavy construction machinery units and some 4,000 constructors with 1,200 of them being residents of the Far Eastern Federal District are engaged in construction of the GTS facilities.Shortly after finishing tests of the linear part Gazprom will start feeding gas into the Sakhalin – Khabarovsk – Vladivostok gas pipeline. In September 2011 natural gas will be delivered to Vladivostok including the 2012 APEC Summit venues on the Russky Island.Based on the meeting results, specific tasks were given to ensure timely implementation of the Company's investment projects in the Far East.Copyright 2011, Gazprom. All rights reserved. ................
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