NEWS,24.09.2012

Putin could go 'overnight' without reforms, says economist

Russian President Vladimir Putin, who faces the biggest protests of his 12-year rule, could lose power overnight if the oil price sinks and he fails to reduce corruption, a leading Russian economist said today.Sergei Guriev, Rector of the New Economic School in Moscow, said the former KGB spy was in little danger in the near future if the price of oil, Russia's main export commodity and a vital revenue source, remained over US$100 per barrel.But he said political upheaval could follow swiftly if the oil price sank and Putin, back in the Kremlin since May, failed to improve the investment climate or tame the corruption and bureaucracy that have plagued Russia for centuries."We all lived through the Soviet Union - which was forever until it was no more... These systems change very quickly," Guriev told the Reuters Russia Investment Summit, recalling that few predicted the Soviet empire's sudden demise two decades ago."The regime may fall apart overnight, and in a way that we don't know. It may be in a peaceful way, it may be in a bloody way," said Guriev.Putin, 59, has dominated Russia since he was first elected president in 2000 and an oil-fuelled economic boom helped keep him popular during his first two four-year terms.He remained Russia's paramount leader when he stepped aside to become prime minister in 2008 because of constitutional term limits, and won almost two-thirds of the votes in a presidential election in March despite the protests in big cities.Guriev is an active player in an "open government" initiative set up by Prime Minister Dmitry Medvedev that is pushing a business-friendly reform agenda, but also has ties to one protest leader, lawyer and blogger Alexei Navalny.He said he thought Putin would heed the warnings before it was too late but must urgently improve the investment climate to keep credibility with the business community.Corruption fight is key Large capital outflows, which reached US$80 billion last year, highlighted Russian investors' pessimism and the protests showed the dissatisfaction of the emerging middle class, he said.Opinion pollsters say Putin's traditional support is holding up in the provinces but Guriev said: "I think (Putin) has already written off the Moscow middle class ... But the general public outside Moscow is also losing patience.""If he didn't care, we wouldn't see all this repression," he said, referring to new laws that increase potential fines for protesters, tighten controls on the Internet and force lobby groups that receive funding from abroad to register with the authorities as foreign agents and undergo additional checks.An anti-corruption drive would be a more effective way for Putin to disarm the opposition, which has made fighting graft a top demand, and help shore up his own popularity, Guriev said."If Putin fights corruption successfully, the opposition is gone," he said. "If Putin doesn't fight corruption, he's gone, and a new government will fight corruption."Underlining the importance of economic growth to Putin's political fortunes, he forecast growth of 3% in 2013 - a relatively low level compared with recent years - but said that even this rate would depend on the oil price. Were the price to fall to $60 per barrel, fiscal reserves would run out in two years, causing a crisis in the government's finances, he said.The oil price at which Russia's budget balances has risen to above $100 per barrel, from $50-55 per barrel five years ago."The government is popular (with ordinary Russians) because it spends more and more and more," he said. "If the oil price were $55, and the government could spend only what it can afford at $55, I think Putin would be gone."

World powers call for new Iran sanctions

Britain, France and Germany have officially called for new European Union sanctions against Iran over its nuclear programme, diplomats said Sunday.The foreign ministers of the three countries wrote to EU foreign policy chief Catherine Ashton last week calling for tougher measures as the showdown with Tehran becomes more tense, a European diplomat said on condition of anonymity.The EU is working on more sanctions as President Mahmoud Ahmadinejad seeks to counter the pressure on his country at this week's UN General Assembly in New York.Ahmadinejad met UN leader Ban Ki-moon on Sunday as the EU foreign policy chief held talks on Iran and other topics with US Secretary of State Hillary Clinton in New York.Details of the new EU measures are still being worked on but foreign ministers from the 27-nation bloc will discuss the move at a meeting in Brussels on October 15.The United States and its European allies say that Iran is working toward a nuclear bomb. Iran says its research is for peaceful energy purposes. There has been mounting speculation in recent months that Israel is planning a military strike on Iran's bunkered nuclear facilities.The United States, Britain and France warned at the UN Security Council last week that time is running out for a negotiated solution with Iran."It is necessary that we sharpen the sanctions," said a second western official, confirming the request by foreign ministers William Hague of Britain, Laurent Fabius of France and Guido Westerwelle of Germany."We think there is still time for a political solution, a diplomatic solution, and this is what we are working for. But we cannot accept nuclear weapons in the hands of Iran," said the official, also speaking on condition of anonymity.Ashton is to chair a meeting in New York on Thursday of the six nations - the EU three, plus the United States, Russia and China - who have been seeking to negotiate a solution with Iran.The international community has pursued a dual track of pressure through sanctions while seeking to negotiate. But the US and European nations say Iran is refusing to talk.UN chief Ban "urged Iran to take the measures necessary to build international confidence in the exclusively peaceful nature of its nuclear program," said a UN spokesperson, Vannina Maestracci.Ban and Ahmadinejad also discussed the war in Syria and the protests in the Muslim world against a US-made film that mocks Islam.The showdown with Iran is one of the key topics at the UN assembly where Israel's Prime Minister Benjamin Netanyahu is also scheduled to speak.Ahmadinejad, who will address world leaders on Wednesday, is probably making his last appearance at the UN assembly where he has become a controversial figure.Western nations regularly walk out of his speeches in protest at his anti-Israeli comments.

German business mood worsens for fifth straight month

German business sentiment dropped for a fifth straight month in September, raising fears of recession as companies struggled with what they said was the worst economic outlook since mid-2009.Germany's relative resilience to the euro zone debt crisis has been steadily fraying as its firms see falling demand for their products from European partners and signs of a slowdown in other markets.The European Central Bank's plan for potentially unlimited government bond-buying has raised hopes on financial markets of an end to the most acute phase of the crisis, but that optimism has not spread to company boardrooms.The Munich-based Ifo institute's monthly sentiment index reached its lowest since early 2010 and Ifo economist Klaus Wohlrabe told Reuters the outlook was the worst since May 2009."Today's Ifo index shows that German companies remain sceptical about the economic impact of (ECB president) Mario Draghi's magic," ING Bank economist Carsten Brzeski said."Despite fears of a looming Eurozone break-up clearly fading away, German businesses are downscaling their expectations. The German economy could see a contraction in the third quarter."Ifo said its business climate index, based on a monthly survey of some 7000 firms, fell to 101.4 in September from 102.3 in August.In its monthly report, the Bundesbank said the domestic economy was robust, but added it saw signs of "weaker dynamics" and "great uncertainty".Foreign trade could be hit more strongly than before by developments in the euro area, the central bank added, also pointed to the labour market, where the rise in employment is slowing as companies become less willing to hire.Dutch business confidence also fell in September to -6.7 points from -4.6 in August, other data showed on Monday, adding to signs that the euro zone's stronger "core" economies are succumbing to the downturn.While they have not been punished by debt markets like much of the euro's southern half, both Germany and the Netherlands have slashed public spending to secure the future of public finances."The drop in Ifo business confidence is a potent reminder that the outlook for the German and Eurozone economies still hangs in the balance," said Holger Schmieding, German economist at investment bank Berenberg."Further policy steps to contain the Euro crisis may be needed for the Eurozone to turn the corner."Tough cuts While the German economy steamed ahead in the first three months of the year, saving the euro zone from recession by growing 0.5%, it lost momentum in the second quarter, with growth slowing to 0.3%.Dragging on the Ifo index in September was a sharp decline in sentiment among manufacturers, although companies in retailing and wholesaling reported a slightly brighter mood. Last week's ZEW survey also showed German analyst and investor morale picked up in September.Industrial group Bosch and steelmaker ThyssenKrupp , have announced plans to introduce "Kurzarbeit" or government-subsidised short-time work at German plants.The index would have fallen further had it not been for a ruling by Germany's constitutional court on Sept 12 in favour of the ratification of Europe's permanent bailout fund.Half of the responses in the survey came after the ruling.The Finance Ministry warned in its monthly report last Friday that data pointed to weaker growth in the remainder of the year. Many economists are now predicting a contraction for the third and possibly the fourth quarters.Another forward-looking indicator, the Purchasing Managers Index (PMI), last week showed Germany's private sector shrank for a fifth month, and a separate index for the euro zone showed that the ECB's bond-buying plan had so far failed to inspire any major improvement in business at ailing euro zone companies.However, economist Gerd Hassel said he believed news of the ECB's bond-buying plan had yet to fully sink in."I'm optimistic that the Ifo climate index will rise again in the coming months," he said.

NEWS.04.03.2012.

Putin always wins

Vladimir Putin has won a resounding victory in Russia's presidential election, exit polls show. He has secured a new six-year term in the Kremlin and a mandate to deal with opposition protests after a vote that opponents said was marred by fraud. Two television exit polls, released after voting ended on Sunday, forecast the former KGB spy would win 59.3% and 58.3% of the votes, enough to make a runoff against the second-placed candidate unnecessary. His nearest rival, communist Gennady Zyuganov, fell short of 20% in both polls.Putin's opponents said voting in many parts of the vast country was skewed to help him return to the presidency after four years as prime minister and vowed to step up the biggest protests since he rose to power 12 years ago. But although they portray him as an authoritarian ruler who is out of touch, his victory had not been in any doubt. The main challenge for Putin, credited by many Russians credit with rebuilding the country's image and overseeing an economic boom, was to win outright in the first round.” I think the elections will be legitimate, fair, and Putin will win in the first round, unless the court rules otherwise," Putin's spokesman, Dmitry Peskov, was shown saying on internet and cable television channel TV Dozhd before voting ended.Putin was likely to portray the victory as strong backing against the opposition protesters, although he has promised not to crack down on them. He is also expected to return to the Kremlin with tough fighting talk against the West, a trademark of his first presidency and election campaign. Some voters expressed anger at being offered no real choice in a vote pitting Putin against four others - communist Zyuganov, nationalist Vladimir Zhirinovsky, ex-parliamentary speaker Sergei Mironov and billionaire Mikhail Prokhorov.Others said Putin, 59, who has portrayed himself as a man of action and guardian of stability, was the tough national leader the world's biggest country and energy producer needed.” I voted for Putin because he was a good president and our children were looked after and that's all. That's how I feel," said Maria Fedotova, a 92-year-old grandmother wrapped up in fur coat and hat, flanked by relatives.

 Putin has remained Russia's dominant leader and its most popular politician since stepping aside in 2008 to make way for his ally, Dmitry Medvedev, because he was barred from a third straight term by the constitution. But some voters are tired of his macho antics, such as horse riding bare chested, and a system that concentrates power in his hands. They fear he could win two more terms, ruling until 2024 - almost as long as Soviet dictator Josef Stalin. Vote monitors from the opposition and bloggers posted allegations of election rigging across the country of 143 million. Golos, an independent monitoring group, said it had registered at least 2,283 reports of violations nationwide. An Interior Ministry spokesman denied there had been any major violations. Election officials also dismissed reports of widespread fraud in a parliamentary election on December 4 which triggered the opposition protests. Thousands of opposition activists as well as an international observer mission were also monitoring the polls. The opposition protests were sparked by the disputed Dec. 4 election, but anger was focused at Putin, who bungled the September 24 announcement of his presidential bid by appearing simply to inform Russians that he would rule for another six years..

NEWS,24.02.2012.

Thousands gather for Putin's battle cry

Tens of thousands of people have gathered in Moscow in support of presidential hopeful Vladimir Putin.

Tens of thousands of people have gathered in Moscow in support of presidential hopeful Vladimir Putin, with numbers rivalling those of recent mass protests against his 12-year dominance of Russian politics. Bussed in from surrounding towns and cities, the rally was all about proving that Vladimir Putin is still Russia's most popular politician. In a fiery speech he issued a battle cry, loaded with patriotic rhetoric. He said: 'We are all ready to work together for the sake of our great motherland. We are not only ready to work, we are ready to defend it.’ To defend it at all times and forever. We won't allow anyone to meddle in our affairs or impose their will upon us, because we have a will of our own.'On the national holiday known as Defenders Of The Fatherland Day, there was a clear effort to entertain the crowds. Older fur-clad Russians danced to Soviet rock and roll, while buckwheat was served from an old field kitchen.Unlike the anti-Putin demos there wasn't an iPad in sight as some donned traditional Russian costume to take part in a tug of war competition.Some attended the rally with gusto.One man told reporters: 'Putin will be president for this term and the next. Only this will make Russia stable. When we had Tsars for 40 years, Russia was able to rise from it's knees and become a great country.'Others were a little confused over the exact nature of the event. One woman said her employer invited to a music concert - not a pro-Putin rally.Most placards were in Russian and had things like 'For the Motherland, for Stalin, for Putin' written on them. One read, in English, 'In Putin We Trust' - although the man holding it did not know what his banner said as he didn't speak English.Rumours of people being ordered to attend such meetings have been rife.Head teacher Yelena Travina, who lost her job when she refused the order to send her employees to a pro-Putin rally, said: 'I felt horrible, hurt and angered at what happened.'I have only received praise in my job so far and then I got into this purely political conflict. I was belittled in front of other employees and thrown out of work. It was a strong blow.'The effort behind this rally suggests genuine concern over the recent anti-Putin protest movement.In just over a week's time he will almost certainly regain his old job. The doubt lies in just how smooth and successful a tenure it will be.

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.