NEWS,31.01.2013

Income surge releaves US consumers

American income growth surged in December as companies rushed to make dividend payments before higher tax rates set in, while buoyant wage growth also gave a lift to households. US personal income rose 2.6% last month, the biggest increase in eight years, the Commerce Department said on Thursday. While much of the gain was due to special payments aimed at beating tax increases due to begin this month, wages still grew at one of the faster rates seen last year. That should lend support to consumer spending and provide some underlying momentum for the economy despite a surprise contraction in gross domestic product during the fourth quarter."Even abstracting from the one-off surge in dividend payments ... the general tone of this report was quite encouraging," said Millan Mulraine, an economist at TD Securities in New York.The increase in overall personal income was well above analysts' expectations for a 0.8% gain. However, another economic report showed an increase in new jobless claims last week, and US stocks traded lower as investors sifted through the mixed data, while prices for US Treasuries were higher.The big rise in incomes put consumers on stronger footing entering the new year, even if the gains may not have been distributed evenly throughout the workforce. Extra dividend payments likely went to the nation's wealthier households who derive more of their income from investments.Still, wages and salary payments grew 0.6% last month, building on a sizable 0.9% gain in November.The income gains helped push the saving rate, the amount of disposable income households socked away, to 6.5%, the highest since May 2009. That offers a cushion for consumer spending as the temporary boost in incomes from investments unwinds and households deal with higher tax rates that took effect this month.Last month, consumer spending rose a modest 0.2%, which was just below the pace expected by analysts.The Commerce Department report also showed cooling inflation, which could help the US Federal Reserve continue easy-money policies aimed at boosting employment.Prices rose 1.3% in the 12 months through December, down a tenth from the reading in November and well below the Fed's 2% target. A core price reading, which strips out volatile food and energy prices to provide a better sense of inflation trends, was up a tame 1.4% from a year ago. A separate report from the Labour Department showed initial claims for state unemployment benefits increased 38 000 last week to 368 000. However, the increase followed a week where new claims were at their lowest in five years and still pointed to an economy where employers are adding jobs, albeit at a lackluster pace. The four-week moving average for new claims, which provides a better sense of underlying trends, gained 250 to 352 000.A report on Friday is expected to show employers added 160 000 jobs to their payrolls in January after an increase of 155 000 in December. The unemployment rate is seen holding steady at 7.8%.The number of planned layoffs at US firms rose in January from the prior month, but declined from a year earlier, another report showed on Thursday. Employers announced 40 430 job cuts this month, up 24.2% from 32 556 in December, according to the report from consultants Challenger, Gray & Christmas, Inc. Layoffs were down 24.4% from January 2012.

Worldwide tablet sales soar

Worldwide tablet sales jumped in the fourth quarter beyond even some of the most optimistic forecasts to 52.5 million, with Android-powered devices pacing growth, a survey showed on Thursday.The preliminary survey by business research firm IDC showed the tablet market grew 75.3% year over year in the quarter and rocketed 74.3% from the previous quarter's total of 30.1 million.IDC said the strongest growth came from Android, including tablets made by South Korea's Samsung and Taiwan's Asus, which makes a Google-branded Nexus tablet.Apple remained the biggest seller, but its market share was under 50%, IDC said. The survey found that Microsoft, which launched its new Surface tablet in the quarter, failed to break into the top five sellers and shipped a modest 900 000 of the devices in the quarter.Overall, the market's strong gains came from a spate of new product launches, including the iPad mini, and lower prices, which encouraged buyers over the holiday shopping season, IDC said."We expected a very strong fourth quarter, and the market didn't disappoint," said IDC analyst Tom Mainelli."The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline during the quarter for the first time in more than five years."Apple's iPad held its top position with 22.9 million units shipped. That was up 48% from a year earlier, but lower than overall market growth.As a result, Apple's market share declined for a second quarter in a row to 43.6% from 46.4% in the third quarter.Samsung, the number two vendor, saw year-on-year growth of 263%, selling 7.9 million tablets and grabbing a 15.1% market share.IDC said Amazon, which does not provide its own sales data, delivered some six million tablets in the quarter to retain its spot as the number three vendor.That represented 26.8% growth, giving Amazon a market share of 11.5%, IDC said.Fourth place belonged to Asus, which sold 3.1 million tablets, year-on-year growth of more than 400%. That gave the Taiwan-based firm a 5.8% market share.Barnes & Noble sold one million of its Nook tablets and accounted to 1.9% of the market, the survey found.IDC analyst Ryan Reith said Microsoft will need to shift its strategy to compete better in the tablet market."There is no question that Microsoft is in this tablet race to compete for the long haul," he said, calling the market reaction to Surface "muted.""We believe that Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices. In the long run, consumers may grow to believe that high-end computing tablets with desktop operating systems are worth a higher premium than other tablets, but until then (selling prices) on Windows 8 and Windows RT devices need to come down to drive higher volumes."

Ukraine economy in official recession

 

Kiev Ukraine's economy plunged into recession in the final quarter of 2012 with GDP contracting 2.7%, the second quarter running of negative growth, the statistics office said.Gross domestic product in Ukraine contracted 2.7% in the fourth quarter of 2012 compared with the same period last year. The economy had already shrunk by 1.2% in the third quarter.For the whole of 2012, growth was almost stagnant at 0.2% compared with 5.2% in 2011 and the projection in the budget for growth of 3.9%.Ukraine, which was one of the European states worst hit by the 2009 economic crisis, is hugely vulnerable to the current global slowdown due to its dependence on metals exports.

Bitter taste for German chocolate makers

German antitrust authorities have fined 11 chocolate makers €60m for colluding to rig the price of confectionary.The Federal Cartel Office says the offences committed by companies, including Kraft and Nestle, occurred between 2004 and 2008.The offences include agreeing on how much to increase the price of chocolate bars when the cost of raw materials rose sharply in 2007.The cartel office said in a statement on Thursday that the companies "simply ceased competing with each other and piled the price rises on to consumers".It said that Mars avoided a fine by alerting authorities to the illegal practices.

Nappy hunters bare Norwegian bottoms

Southern Norway is in the midst of a nappy shortage after a supermarket price war lured enterprising bulk shoppers from eastern Europe who have cleaned out the shelves, customs officials and retailers said.Norway is one of the world's most expensive countries. However, supermarkets in the south trying to lure local customers by undercutting rivals on the price of nappies inadvertently made it profitable enough for residents of nearby countries to start trading in them."They buy every last diaper [nappy], I mean everything we have on the shelves, throw it in the back of their car and take them home, where they sell it for a nice profit," says Terje Ragnar Hansen, a regional director for retail chain Rema 1000."It's not stealing and it's not even criminal but it's a big problem, ... they leave nothing for our regular customers.Customers come into Norway from Sweden, drive along the coast to fill their cars, then take a ferry back to the continent, said Helge Breilid, the chief of customs in Kristiansand on Norway's southern coast.Some have been stopped with nappies worth up to $9 100, roughly 80 000 nappies, a legal shipment even though Norway is not part of the European Union. "They told us that the only reason they came to Norway was to drive around and buy nappies to bring back home and resell," Breilid said. "These people mainly come from Poland and Lithuania, and we have no reason to believe that they are part of any criminal gangs."Norwegian nappies cost as little as $5.47 for 50, less than half of the prevailing price in Lithuania. Coincidentally, the internet is heaving with Lithuanian sellers advertising Norwegian nappies.

French civil servants go on strike

French civil servants went on strike on Thursday for better pay in their first mass show of dissent since the Socialist Francois Hollande became president last year.Dozens of street protests were planned across the country as part of the day of action called by three of the several unions which represent France's 5.2 million state workers.The main complaint of the unions relates to the index used to calculate salaries, which has been frozen for three years.Raising the index by one point would cost €800m if applied only to central government workers or €1.8bn if applied to all civil servants, according to the state audit authority.Jean-Marc Canon of the CGT union said the situation was "absolutely catastrophic", and noted that nearly a million civil servants were being paid the minimum wage.The unions are seeking to put pressure on Civil Service Minister Marylise Lebranchu ahead of pay talks next Thursday.She has acknowledged "the difficult situation facing civil servants" but hinted that pay rises were unlikely given the budgetary constraints on the government.The government was due later on Thursday to announce how many civil servants had answered the strike call.

NEWS,23.03.2012.

          Dmitry Rogozin Appointed Special Presidential Representative for Transnistria

On March 21, outgoing President Dmitry Medvedev appointed Dmitry Rogozin as Special Representative of the Russian President for Transnistria (“po Pridnestrovyu”). Undoubtedly, Medvedev acted at the behest of the incoming president, Vladimir Putin. On that same date, Putin – in the final days of his prime-ministerial tenure – appointed Rogozin as chairman of the Russian side of the Russia-Moldova inter-governmental cooperation commission. In the event that Medvedev and Putin swap places, Rogozin will be working for Medvedev on this commission and in the Russian government (Interfax, March 21, 22).Rogozin will continue serving as Russia’s deputy prime minister responsible for the armaments industry. In February 2011, then-president Medvedev appointed Rogozin as presidential special representative for missile-defense negotiations with the US and NATO (a position now about to devolve to president-elect Putin’s portfolio). Rogozin served as Russia’s envoy to NATO from January 2008 to December 2011 (under Foreign Affairs Minister Sergei Lavrov, at least theoretically).Concurrent assignments, dual or even multiple, are not uncommon in the Russian government. Rogozin’s assignment to handle Transnistria, however, is highly unconventional (as is his character) and not immediately explicable. At one time in his variegated career, Rogozin had served as presidential special representative on matters of Kaliningrad Oblast (2002-2004). That oblast, like Transnistria, is a Russian-garrisoned exclave, a non-contiguous territory. (Transnistria is sometimes referenced as a de facto Kaliningrad on the Nistru River, despite the different legal status of the two territories). Rogozin’s Kaliningrad experience may have been a factor, but not a major one in the decision to appoint him as Putin’s representative on Transnistria.Rogozin’s “Transnistria” assignment will almost certainly cover both local issues and the international negotiating process. Announcing Rogozin’s appointment, the Kremlin’s press office cited Rogozin’s experience as an international negotiator in his previous postings. Rogozin’s “Moldova” assignment, on the other hand, seems confined to economic and social issues between Russia and right-bank Moldova, apparently excluding Transnistria (left-bank Moldova) from the purview of the Russia-Moldova inter-governmental commission. In line with Russia’s constitutional system, Rogozin will apparently be reporting to President Putin on Transnistria issues, and to Russia’s prime minister (possibly Medvedev who appointed him formally) on rump-Moldova issues. If so, Rogozin’s bifurcated appointment is designed to treat the two parts of Moldova separately from each other and institutionalize the country’s division. Inserting Rogozin into the negotiating process on Transnistria (or any issue) would be a recipe for its disruption. His track record at NATO is one of systematic confrontation, verbal aggression, and (while playing a relatively weak hand for Russia) seeking psychological ascendancy over Western counterparts through insulting behavior. While Putin himself resorts to such tactics from time to time, Rogozin did so methodically during his tenure at NATO. Moldova has reacted to Rogozin’s appointment with palpable confusion. Moldova’s Foreign Affairs Ministry “takes cognizance of [Russia’s] decision with surprise. On the one hand, it might confirm the importance that Russia assigns to the conflict-resolution process. On the other hand, this move was not discussed in advance with Moldova’s authorities. [Moldova] will seek appropriate clarifications” (Moldpres, March 22). For its part, Tiraspol has issued a self-assured statement welcoming Rogozin’s appointment and expressing confidence in his effectiveness (Olvia-press, March 22)The 5+2 negotiating format (Russia, Ukraine, OSCE, US, EU, Chisinau, Tiraspol) is the only format accepted by all sides as legitimate, but it has remained inactive from 2006 to 2011, and is not fully reactivated yet. Thus far, Russia’s Foreign Affairs Ministry has handled the negotiations through mid-level diplomats, under supervision from State Secretary Grigory Karasin and Russia’s Security Council. Inserting Rogozin would change the level of institutional and personal authority over the negotiations on the Russian side.Outside the 5+2 format, Germany seeks a special role for itself in a would-be Russo-German bilateral format. Envisaged by Chancellor Angela Merkel and President Medvedev in their 2009 Meseberg Memorandum, this channel has not materialized in any shape other than informal contacts thus far. Apparently seeking to carve out a German role in these negotiations, German diplomats seek to nudge Chisinau into unilateral concessions in the 5+2 process, although Germany is not a member of that process. Inducing Moldovan concessions in 5+2 from outside 5+2 would distort that process; but might, at that price, qualify Berlin in Moscow’s eyes for starting together the Meseberg process. With Medvedev’s departure from office, and Medvedev’s sudden appointment of Rogozin as Putin’s special representative for Transnistria, the Meseberg process seems to be headed nowhere.During his posting as envoy to NATO, Rogozin occasionally boasted that he had personally fought in Transnistria against Moldovans in the 1992 armed conflict. This sounds exaggerated, but it is a fact that Rogozin visited Transnistria in 1992 (quite possibly also thereafter) in his capacity as a left-nationalist Russian politician. From the early 1990s until 2008, Rogozin was the leader of a whole series of ultra-nationalist organizations and parties, focusing on Russia’s “near abroad” and an empire-rebuilding agenda. These organizations included the Congress of Russian Communities (in two iterations), Rodina, and a few obscure and ephemeral ones. As a politician, Rogozin operated at times through “projects” of the authorities, at times on his own. His projects were serial failures until 2008, when Putin rescued him from the political gutter and appointed him as Russia’s envoy to NATO. That appointment was in itself a calculated insult to the Alliance.While Chisinau seems confused about the significance of Rogozin’s latest presidential appointment, Berlin must be wondering what may become of its Meseberg process if its fate comes to depend on Rogozin.

NEWS,25.02.2012.

Gas Prospects for Russia

 Although petroleum is the primary fuel all over the world, natural gas is becoming increasingly competitive  because it is abundant, cheaper, cleaner and more fuel-efficient. In possession of the world's largest gas reserves, Russia is the largest producer and exporter of natural gas. Russian gas constitutes more than a quarter of natural gas consumed by the European Union, which provides Russia a certain degree of leverage to exercise its influence over Europe. Russia's bilateral ties with transit nations like Ukraine and Baltic states also play a determining factor in the continuity of gas supplies to Europe. The Russia-Ukraine gas dispute in early 2009 very well exposed the vulnerability of Europe to resultant disruptions. The Nord Stream natural-gas pipeline, the first leg of which was commissioned recently, is expected to partly allay the European fears of cut-off since it will deliver gas directly from Vyborg, Russia, to Greifswald, Germany, running underneath the Baltic Sea, thus bypassing transit nations and hence evading potential diplomatic attrition. Moreover, the savings from transit fees will add to economies of scale for both sides. While the EU has a reason for contentment owing to assured gas supplies from Nord Stream, for Russia it will not only bring additional revenue, but also take away a bargaining chip from its neighbours who time and again threaten to disrupt supplies. Even though the West is backing the proposed Nabucco gas pipeline, connecting Turkey to Austria, in an effort to reduce European dependence on Russian gas, serious doubts remain on its political feasibility and economic viability, owing to its diverse gas sources such as Iraq, Azerbaijan and Turkmenistan, which are fragile regions. Moreover, the pipeline is planned to pass through restive areas of the South Caucasus and Eastern Turkey. Therefore, security is a major hurdle circumscribing the prospects of this project. To further undermine Nabucco's prospects, Russia, along with Italy, has launched a rival South Stream pipeline project. It will transport Russian natural gas via the Black Sea to Bulgaria and further to Greece, Italy and Austria. The project, executed jointly by Russian giant Gazprom and Italy's Eni, is expected to be running by 2015, much before the proposed commissioning of Nabucco in 2017. Even if completed in time, Nabucco will be able to feed only a limited number of European countries. Hence, both Nord Stream and South Stream combined are bound to make Russia the undisputed energy feeder to Europe, making it capable of enjoying an unprecedented influence over the continent at a time when all of its major economies are reeling under serious debt crises.

To quote Russian President Dmitry Medvedev during the launch of Nord Stream, "It marks a significant step in relations between Russia, the E.U., Germany and a number of other countries that participated in the project. In the long run, it will bolster security in Europe, including in the energy sector, particularly amid the current economic difficulties.” Expanding the scope of its energy diplomacy of late, Russia has tried to diversify its gas exports by finding new customers. In this attempt, a pipeline has already been laid to China. Another project, Altai gas pipeline, is on the cards. In addition, Russia has proposed to lay a pipeline to the Koreas , in an effort to reduce tensions on the Korean peninsula and give a boost to the impoverished North Korean economy. Plans are also underway to take supplies to maritime neighbor Japan as well as to Southeast Asia. The Eastern Siberia-Pacific Ocean oil pipeline is already pumping Russian crude to Japan, China and Korea. Since Asian economies' appetite for energy is huge, this diversification of supplies to Asia-Pacific will ensure guaranteed demand for Russian gas. It will also enable Moscow to have a greater say in the affairs of the region.This is an opportune moment for Russia. By wisely and judiciously making use of its geography, it can establish itself as a strong pole in the emerging global order.

NEWS,08.02.2012

Aid sent by helicopter as thousands remain cut off in Europe

Helicopters ferried food and medicine to iced-in villagers on Wednesday as Europe's 12-day-old cold snap tightened its frigid grip on the continent, where more than 400 have died as a direct result. Eastern countries such as Poland and Ukraine account for more than half this total, and dozens more have succumbed to the weather's secondary effects, such as asphyxiation by shoddy heating. Heavy snows eased in Bosnia but the bitter cold continued, especially in the south and southeast, where temperatures dropped to minus 20 degrees Celsius (minus 4 Fahrenheit.)Thousands struggled without power, including around the historic city of Mostar, where some 15,000 homes lacked electricity.Uma Sinanovic, a spokeswoman for Bosnia's defence ministry, said areas around Nevesinje and Berkovici in the country's south were especially hard hit."The electricity has been down for two days, phone lines are also down in that region," Dragan Stark of the Bosnian Serb civil protection service added. "It's a disaster.” Bosnian authorities on Wednesday sent civilian and military helicopters to isolated hamlets near Mostar and Kalinovic, bringing much-needed supplies and ferrying sick people to hospitals.Five choppers delivered basic foodstuffs like flour and oil, lowering the supplies down by rope when landings were impossible.The Bosnian authorities said that two more people had died from the cold in the rugged mountainous Balkan nation, raising the toll to seven, while Albania had its first victim, a man aged 37 found dead near Tirana.Russian authorities announced at least 110 people had died as a result of the cold so far this year, 44 of them in the first week of February alone.” Weather like this is only once in five years, it's usually much warmer," Moscow resident Pavel Sterlikov said.
 

Elsewhere, icebreakers were hard at work to clear parts of the Danube, one of Europe's main arterial waterways, with stretches of hundreds of kilometres (miles) frozen between Croatia and Serbia.Serbia's ministry for infrastructure and energy banned navigation along all waterways within the country, including the Danube, Sava and Tisa rivers, because they were frozen, Beta news agency reported. Deputy minister Pavle Galic told the agency the rivers could be closed for as long as 10 days.More than 70,000 people remain cut off from the outside world in Serbia and other Balkan countries. In southern Croatia more than 100 villages were still isolated for the sixth consecutive day. Miserable conditions persisted in Bulgaria, with violent snowstorms raging in the Danube plain in the northeast, where all traffic has been suspended since Tuesday and where the main border crossing with Romania was closed due to ice. Four more people were found dead under the snow in the Pernik region in the west of the country, raising the number killed by the cold to 20.At least eight people drowned Monday after rivers flooded and a burst dam sent freezing waters into the village of Biser. Authorities continued to search for two missing residents and Bulgaria announced a national day of mourning. Officials warned that heavy snow storms could trigger floods when the spring melt begins, and the government was implementing urgent measures to strengthen dams and riverbeds. Ukraine remained the worst-affected country, with hundreds of cars stranded on the Crimean peninsula and at least 131 deaths so far attributed to the cold, while three more people froze to death in Romania, bringing that country's total to 41.
The Hungarian Central Bank, meanwhile, said it literally had money to burn to help the country's homeless. The bank has been pulping wads of its retired forint banknotes and turning them into briquettes, which make useful heating fuel. Famished wolves scavenged in the isolated, snow-covered Italian village of Trasacco, while keepers at the Berlin zoo imposed a cold-related curfew on the giraffes and antelopes, which will be kept inside for all but 2.5 hours each day.

Pope Benedict XVI urged Catholics and religious organisations Wednesday to show solidarity and generosity to victims of the cold. While conditions have been brutal for much of Europe, residents in the Netherlands were waiting with bated breath to see if the country's canals would freeze hard enough to allow a legendary ice-skating race to take place. For the so-called Elfstedentocht (11 city) race to take place for the first time in 15 years, the ice needs to be at least 15 centimetres (six inches) thick along the entire 200-kilometre (124-mile) route, but ice cover remains patchy along some stretches. Canals were also frozen in the heart of Paris and the city authorities brought out their only ice-breaker, a barge equipped with a snow plough.

NEWS,07.02.2012

Worst on the way for snow-hit Eastern Europe

Heavy snowfall across eastern Europe cut off hundreds of villages today and rescue teams struggled to evacuate people in southern Bulgaria where rain and melting snow had caused a dam wall to break, flooding an entire village. A river dike also broke under intense water pressure near Kapitan Andreevo at the border with Turkey, officials said. The cold snap has killed hundreds of people across Europe and temperatures in some countries plummeted to nearly minus 40C (minus 40F).Officials today warned of flooding when temperatures rise and snow melts. Around 146 towns and villages in Romania were isolated with no road or train connections because of blizzards. Up to 174 villages had no electricity, said Alin Maghiar, spokesman for Romania's emergency department. Electricity was also cut off to 300 towns and villages in Bulgaria, roads were closed and several border checkpoints with Romania and Turkey were shut, the Interior Ministry said. The ministry said more heavy snowfall was expected. Melting snow had caused a dam wall to break and flood an entire village in southern Bulgaria on Monday. Four people drowned and more than 50 were evacuated. Four more people died when their cars were swept away by high waters.” It was terrifying," Iliyan Todorov from the village of Biser told Trud daily. "We were warned that the tsunami was coming only five minutes before the wave came...We survived by a miracle".European Commissioner for Crisis Response Kristalina Georgieva said "the worst is yet to come" after visiting Biser."The next two weeks may be really hard. The warmer weather will cause melting of the snow and the situation will most probably worsen," private broadcaster bTV quoted her as saying. In the worst affected country, Ukraine, 135 people were confirmed dead up to Monday and forecasters said bitter temperatures, as low as minus 30 Celsius (minus 22 Fahrenheit), would continue until at least February 15.The Black Sea ports of Varna and Burgas have been closed due to strong winds and Romania's main port of Constanta and other smaller ports were also shut down today. 

Authorities in Serbia said they were preparing to use explosives to break ice on the rivers Ibar and Danube.” An ice cap half a metre deep has formed on the Ibar near Kraljevo and there is a real danger that it could cause the river to overflow into the city," said Predrag Maric, head of the Interior Ministry's emergencies department.He said 100 km of the Danube were freezing over and that it would also be mined.Eleven people have died so far from the cold and snow in Serbia, with the latest victims a 62-year-old man found dead a kilometre from his home near Arilje in western Serbia and a woman killed by falling ice in the capital Belgrade. Serbian power provider TENT, which provides more than 60% of the country's electricity, said it was managing to maintain supplies but was working at full capacity in "extreme" conditions. To the south in Albania, the Kukes Lake on the border with Kosovo - supplying a hydropower plant at Fierze - was frozen over for the first time in more than a decade, putting more pressure on already strained power supplies. The cold weather has increased demand for gas in many European countries. Italy took emergency measures on Monday to deal with what it called critical shortages of Russian gas. Supplies to other members of the European Union mostly improved at the weekend but remained below normal. Russia, which supplies about a quarter of Europe's natural gas, reduced westward flows through pipelines across Ukraine last week citing greater domestic demand because of the extreme weather.

NEWS,31.01.2012.

More than 60 dead in Eastern Europe cold snap

       A woman carries fire wood on a street in Bucharest as she deals with the cold snap 

More than 60 people have died in a cold snap across Eastern Europe, authorities said on Tuesday, forcing some countries to call in the army to help secure food and medical supplies and set up emergency shelters for the homeless. The temperature in Ukraine sank to minus 33 degrees Celsius, the coldest in six years, while eastern Bosnia experienced lows of minus 31C and Poland, Romania and Bulgaria minus 30C.Forecasters said the cold spell would last until Friday with further heavy snow expected across the region on Wednesday. At least 30 people, most of them homeless, have died in Ukraine in the past five days, the Emergencies Ministry said. Another 500 people were treated in hospital for frostbite and other cold-related ailments. January temperatures in Ukraine do not normally sink below minus 15C. The ministry said 1600 centres had been set up to provide shelter and hand out food for the homeless. Five people died in Bulgaria and eight in Romania, where troops were called in last week to rescue hundreds of people stranded in cars by blizzards. The Black Sea was frozen around the Romanian resort of Mamaia, and across the border in Bulgaria a salt lake froze for the first time in 58 years. Five people were reported dead in Poland overnight, bringing to 15 the number to have died since temperatures dropped at the weekend. Several suffered carbon monoxide poisoning from old or faulty heaters, the Interior Affairs Ministry said. At least three people have died in heavy snow in Serbia's mountain regions to the south and southeast. Authorities declared a state of emergency in 13 municipalities and deployed the army and fire-fighters to get supplies to remote villages.” The situation is gradually being restored to normal," said Predrag Maric, head of the Interior Ministry's emergency situations department. Dozens of villages were cut off by two metres of snow in eastern Bosnia, where the frozen body of a man was found at the weekend.

NEWS 21.01.2012

Britain admits 'fake rock' plot to spy on Russians

Tony Blair's former aide Jonathan Powell says UK was behind plot to spy on Russians with device hidden in fake plastic rock Britain was behind a plot to spy on Russians with a device hidden in a fake plastic rock, a former key UK government official has admitted. Jonathan Powell, former chief of staff to prime minister Tony Blair, admitted in a BBC documentary that allegations made by the Russians in 2006 - dismissed at the time - were in fact true.” The spy rock was embarrassing," he said in the BBC2 documentary series, Putin, Russia and the West. "They had us bang to rights. Clearly they had known about it for some time and had been saving it up for a political purpose.” A diplomatic row was sparked six years ago after Russian state television broadcast a film claiming British agents had hidden a sophisticated transmitter inside a fake rock left on a Moscow street. It accused embassy officials of allegedly downloading classified data from the transmitter using palm-top computers. The TV report showed a video of a man slowing his pace and glancing down at the rock before walking quickly away; another man was shown kicking the rock, while another walked by and picked it up. The Russian security service, the FSB, broadcast X-rays of a hollowed-out rock filled with circuitry and accused four British men and one Russian of using it to download information. The FSB alleged that British security services were making secret payments to pro-democracy and human rights groups.

Soon after the incident, then President Vladimir Putin forced the closure of many non-governmental organisations (NGOs) after introducing a law restricting them from receiving funding from foreign governments.” We have seen attempts by the secret services to make use of NGOs. NGOs have been financed through secret service channels. No one can deny that this money stinks," said Putin. "This law has been adopted to stop foreign powers interfering in the internal affairs of the Russian Federation.” Britain’s ambassador in Moscow at the time, Tony Brenton, denied the government had been involved in covert activities.” All of our activities with the NGOs were completely above board," he said. "They were on our website, the sums of money, the projects. All of that was completely public.” The revelation comes at a sensitive time, with Putin renewing attacks on human rights and opposition activists as hostility to his premiership grows. He has repeatedly accused the west, namely the US, of using activists to plot to bring regime change to Russia."Putin, as a former spy and KGB agent, is trying to discredit us with the only methods he knows," said Lev Ponomaryov, a prominent human rights activist. "For any thinking person this rock meant nothing – it was simply a provocation, a cheap trick used by a former KGB agent."At the time Blair attempted to play down the allegations, and the Foreign Office denied any irregular relations with Russian NGOs. When asked about the incident, Blair smiled as he told journalists: "I think the less said about that, the better."

'Fake rock' Russian spy plot: anti-Putin activists left between rock and hard place

Russian leader Vladimir Putin previously exploited spy caper to discredit non-governmental organisations

An image broadcast by Russian state-run Rossiya TV in January 2006 shows an x-ray image of the rock, with transmitter. It was the moment that British spycraft became the laughing stock of Russia. The decision by MI6 to place a fake rock rigged with a hidden transmitter to communicate with agents in Moscow was more Johnny English than James Bond, with Russian state-run television airing a programme dissecting the rock with x-rays and showing grainy footage of British diplomats giving it a gentle kick when it seemed to be out of order.
Thursday's admission by Jonathan Powell, former chief of staff to the then prime minister, Tony Blair, that the rock was indeed the work of British intelligence might seem like a small footnote in history to a forgotten scandal. But inside Russia there was a bigger game at play."The spy rock was embarrassing … they had us bang to rights," Powell told BBC2 in its new documentary series Putin, Russia and the West. The Kremlin had known about the rock "for some time, and had been saving it up for a political purpose", he added.That political purpose emerged two days after the scandal came to light when Vladimir Putin, then president, said: "It has now become clear to many why Russia passed a law regulating NGO activities."Less than two weeks earlier Putin had quietly signed a new law tightening state control over non-governmental organisations, including clauses that gave the government power to shut them down and force greater monitoring of foreign funding. The new regulations followed pro-democracy revolutions in neighbouring Georgia and Ukraine, which Russia argued were orchestrated by the west via foreign-funded NGOs.The new law, Putin explained, was "designed to block foreign governments from interfering in the internal politics of the Russian Federation". Critics said it was the latest step in Putin's growing authoritarianism, a further crackdown on Russia's struggling civil society. International organisations loudly condemned the law. That’s when the rock dropped into the narrative. According to the Kremlin, a British diplomat used communications technology in the fake rock to send and receive information and had dealings with Russian NGOs; ergo, went the Kremlin's argument, the west was funding NGOs to cause the downfall of the Putin regime. A justification for Putin's new law had been found. Since the law was implemented thousands of NGOs have been harassed, denied registration or shut down, according to Human Rights Watch. The climate of suspicion has only intensified, particularly in the past month as Putin battles a growing movement against his rule as he seeks to return to the presidency in March.In the lead-up to Russia's parliamentary election on 4 December, Putin said again outside powers were seeking to use NGOs to subvert the country. Within days of his remarks an all-out campaign had been launched against Golos, an independent election-monitoring group that receives foreign funding – bureaucratic investigations, a smear campaign in the press, the hacking of employees' email accounts. When tens of thousands of Russians began taking to the streets in the wake of the vote – spurred on by widespread allegations of fraud of the type Golos was designed to monitor – Putin promptly accused them of being agents of the west. That’s what for some Russians makes the timing of Powell's revelation so precarious. "I would not be surprised if Putin and his team actually used it again to assert their old platitudes discrediting leading human rights activists," said Tanya Lokshina, of Human Rights Watch Russia.