SOURCE: The St. Petersburg Times
DATE: Issue #1063 (29), Friday, April 22, 2005
**************************************************************************


TITLE: Rosatom Sees Cash in Foreign Nuclear Subs
PUBLISHER: Staff Writer
TEXT: Russia could earn several hundred million dollars if the United States, Britain and France agreed to let it dispose of their old nuclear submarines, says Alexander Rumyantsev, head of the Federal Nuclear Power Agency, or Rosatom.
 
His proposal made on Monday alarmed international environmental organizations, which described Rosatom's announcement as "silly" and stressed that Russia could gain from such projects only with the assent of the other countries.
 "So far this is a political message," RIA Novosti quoted Rumyantsev as saying Monday. "The disposal of submarines using Russia's facilities would let our foreign partners save significant expenses because they would not have to build the necessary infrastructure in their countries."
 Russia receives $100 million a year from other countries to finance the breaking up of its own nuclear submarines and the storage of their radioactive reactors and spent fuel rods. This work is done in harbors on the Barents Sea and in the Far East, he added.
 The technologies Russia uses allow it to dismantle a submarine for the relatively low cost of between $2 million and $10 million, depending on the type of submarine. The total value of potential contracts could be up to $300 million, the agency estimates.
 "For now, 120 submarines have been dismantled and about 80 remain," Rumyantsev said. "We process 15 submarines a year. In five or six years we can finish everything," he said.
 To allay fears that Russia would acquire secret technologies used in foreign submarines, Rumyantsev said the subs could be delivered "with only general and traditional mechanisms left on board."
 "If we reach an agreement, in the first stage the spent fuel would be removed in the countries that own the submarines," he said.
 But environmentalists said Rumyantsev had not given enough consideration to his proposal before publicizing it.
 "Rumyantsev's business initiative sounds silly because there is still plenty to be done to domestic nuclear submarines in the next 10 years," Alexander Nikitin, a member of Norwegian environmental organization Bellona, said Wednesday in a telephone interview.
 "There shouldn't be talk about transporting foreign submarines here until all Russian stuff is cleaned up," Nikitin said. 
 "They didn't even think through such matters as transportation, storage and safety. And the process of removing all the secret things from [foreign] submarines is also quite expensive. Nobody would give Russia equipment with some secret technical elements."
 "Rumyantsev doesn't care whether his proposal means bringing nuclear waste or nuclear parts of some sort to Russia. His main goal is to earn money and create working places for Rosatom," he said.
 Analysts at the Center for Environmental Policy said it is unlikely that the United States would go along with Rumyantsev's idea. Britain, France and the U.S. are capable of solving the problem on their own.
 "The United States resolved this matter long ago," Interfax quoted Alexei Yablokov, president of the center, as saying Monday. "They cut up a submarine, weld the reactor section and store it in special zone in a desert."
 "For developed countries it would be no problem to create [the necessary technologies], especially taking into account that France has only seven nuclear submarines and Britain has slightly more than 20," he said.
 The Russian branch of Greenpeace released an open letter to the governments of foreign countries that called Rumyantsev's proposal "another shady venture."
 "The Russian nuclear sector is ridden with all imaginable problems starting from simple cases of theft and finishing with a lack of physical safety systems at nuclear sites," Greenpeace wrote in the letter.
 As an example, the environmentalists named Mayak, a plant that reprocesses nuclear waste, including that removed from nuclear submarines. 
 "In the half century of its activity it has continuously dumped liquid nuclear waste in the Techa river [of the Chelyabinsk region], along which people live," the letter says.
 "This was the reason that the General Prosecutor's Office at the beginning of April initiated a criminal case against Mayak for polluting the environment. Accidents that have occurred at the plant are comparable in scale to the Chernobyl disaster," the letter said.
 "The authorities keep forgetting that there are tens of thousands of metric tons of nuclear waste accumulated in the country from nuclear power plants as well as from nuclear submarines.
 "In fact, it is not being reprocessed by anyone. Besides, there is nuclear waste in Russia taken from nuclear power plants in Hungary, Bulgaria and Ukraine, which was at some point said to have been transported to Russia for reprocessing but was simply buried on Russian soil," the letter said.

TITLE: Animal Rights Group Peta Blasts Fur Trade
PUBLISHER: Staff Writer
TEXT: U.S.-based anti-fur campaign group Peta came to St. Petersburg this week to tell people to abandon fur as traders gathered for one of the biggest fur auctions in the world. 
 
Peta is famous for its "I'd rather go naked than wear fur" adverstising campaign, which featured top models such as Kim Basinger, Christy Turlington and Claudia Schiffer posing nude for posters.
 Lisa Franzetta, a senior campaign coordinator for People for the Ethical Treatment of Animals, said the group visited the city for the first time to draw the attention of fur brokers and buyers to abuses in the production of fur in China.
 "There are nine major international fur auctions each year," she said. "We are trying to go to the cities where these auctions take place and draw attention to fur farms in China, which have become the world's leading exporter of fur."
 "We have uncovered some of the worst abuses we have ever seen," she added Wednesday in a telephone interview.
 Franzetta said China has no laws to protect animals. 
 Natalia Chirkova, spokeswoman for the Soyuzpushnina trading house that held the auction this week, said the auction is among the top five in the world. Four sales are held in St. Petersburg each year, the biggest of which are in January and April. About 100 foreign buyers attended the sale this week.
 "But our sale has no Chinese fur in it, only Russian products," she said Wednesday in a telephone interview.
 Asked if the fur was produced ethically, she said: "No one is interested in harming animals."
 She declined to comment specifically on Peta's claims.
 Franzetta said Peta had made no direct approach to the auction or the brokers, but that people were given information to help them decide not to buy fur goods at a news conference Tuesday.
 "Every consumer has an obligation to her or himself to educate themselves about what industry they are supporting," she said. "They can see the video on the web site www.furisdead.com."
 Eighty-five percent of fur is produced from caged animals on fur farms, which are inhumane, and wild animals caught in traps die in cruel ways, she said.
 "There's no way to humanely produce fur. Social progress is all about people adopting more humane practices," she said.
 There are many alternatives to fur that look good, are just as warm and that are inexpensive, she said.
 While the fur market in the United States and Western Europe is sluggish, the industry will not die overnight and is shifting its attention to Russia and Asia, she said.
 Peta has written to Russian fashion retailers and designers asking them to stop using fur. 
 U.S. TV star Pamela Anderson, who with many figures from the fashion and entertainment worlds supports Peta, personally wrote to about 90 fashion designers in Russia and the CIS in February urging them to consider not using fur in their designs. Some videos of maltreatment of animals were included with Anderson's plea.
 "One designer refused to even accept the package," Franzetta said. "They don't want to see the kind of abuse that their work is supporting."
 Fur hats and coats are commonly worn in Russia and are widely considered the best and most durable protection against severe winter weather.
 Asked if Peta's campaign represented a group of rich, urban Westerners who have little understanding of conditions in Russia, Franzetta denied that members were rich city-dwellers, saying the animal rights group has 800,000 members worldwide and works closely with Russian partners.
 Next month Peta is planning an action in Moscow against Benetton shops for using Australian merino wool, which Peta says is produced in cruel conditions. 
 To prevent blow-fly attacks as the sheep are reared, it is common practice to cut their skins in a way that Peta says is unnecessary. The group also objects to exporting live sheep on ships.
 A woman at a Benetton store on Bolshoi Tolmachevsky Pereulok in Moscow said she was surprised to hear that Peta was targeting Benetton. Her store had run a campaign to save wild apes last month, said the woman, who declined to be named.
 "[Peta] seem to lack information," she said. "If they looked at the activities of Benetton they wouldn't do that." 
 Benetton's headquarters in Italy responded with an official statement issued on Feb. 15 saying that "Benetton Group does not adhere to the requests made by Peta to boycott Australian wool."
 Benetton "has always paid strong attention to the respect of ethical and social values in its manufacturing organization, its retail network and in its communication campaigns, as has been repeatedly conveyed to Peta," the statement read. Benetton "has been unjustly and incorrectly involved by Peta in a dispute with the Australian wool industry."

TITLE: Rice Mixes Criticism and Praise for Russia
PUBLISHER: Staff Writer
TEXT: MOSCOW - U.S. Secretary of State Condoleezza Rice on Wednesday mixed criticism of the Kremlin's record on democracy with praise for Russia's commitment to the war on terrorism and to nuclear nonproliferation on the second day of her visit to Moscow.
 
Rice started her day by giving interviews to NTV television and Ekho Moskvy radio before meeting with President Vladimir Putin in the Kremlin and giving an upbeat assessment of U.S.-Russian cooperation on security and other issues.
 "With your direct participation, our relations with the United States have reached the high level they have today," Putin said in cordial remarks to Rice at the start of their Kremlin meeting. "We have strong hopes that the course for developing cooperation would be continued on both sides."
 Putin also asked Rice to convey to U.S. President George W. Bush that he would be warmly welcomed at the upcoming May 9 celebrations of the Allied victory in World War II in Moscow.
 In response, Rice passed on Bush's "warm regards" and said that he was looking forward to making the trip.
 Foreign Minister Sergei Lavrov, who also attended the Kremlin meeting with Putin, said later that Rice had been briefed on Russia's domestic policy developments. Rice also had lunch with Lavrov at a Foreign Ministry residence after her meeting with Putin. On Tuesday evening, she also had a private dinner with Defense Minister Sergei Ivanov.
 Rice and her team arrived in Moscow on Tuesday to discuss what has become the traditional agenda of U.S.-Russian relations - terrorism, nuclear security, NATO-Russia cooperation, mediation of the Israeli-Palestinian conflict, U.S. conditions for Russia's access to the World Trade Organization and Russian energy exports and the rule of law.
 Despite such a broad agenda, Russian state television gave very brief coverage to Rice's meetings and her visit in general. The exception was NTV, which was due to air an interview with Rice late Wednesday.
 Before speaking to NTV, Rice had a chance to weigh in on almost every topic on the U.S.-Russian agenda in her interview to Ekho Moskvy on Wednesday morning. Rice reiterated White House concerns about the Kremlin's drive to tighten its grip on the country and the lack of independent television channels.
 "There should not be so much concentration of power just in the presidency; there needs to be an independent media... so that the Russian people can debate and decide together the democratic future of Russia," Rice said.
 Bush has proclaimed the promotion of democracy worldwide a key priority for his second term. Yet the White House has limited direct criticism of the Kremlin over what it sees as a rollback of democracy, fearing that this could alienate Russia, which remains an important ally in the U.S.-led war on terrorism and in promoting nuclear nonproliferation.
 Rice said that the United States was not playing zero-sum games in the post-Soviet neighborhood, which Russia views as its sphere of influence, in response to a question about the United States' role in the revolutions in Georgia, Ukraine and Kyrgyzstan.

TITLE: Residents
 Protest Plan
 For Hotel
 In Garden
PUBLISHER: Staff Writer
TEXT: Residents of the Petrogradsky district this week protested against plans by joint-stock firm New Technologies a to build a 30-meter high hotel in the Lopukhinsky Garden.
 
In June 2004, City Hall gave the company a construction permit to build on a plot 6,702 square meters in area inside the garden, which will mean destroying a hockey field if New Technologies proceeds with the project, the residents said.
 "Lopukhinsky Garden is a rare island of rest and beauty or, simply, a stimulating place left in the city," Tatyana Likhanova, a coordinator of the protest group, said Thursday in a telephone interview.
 "As far as we know some influential person connected to the construction of Konstantinov Palace [the presidential headquarters in Northwest Russia] is involved in this project," she said. 
 "We've been told City Hall officials expressed grave doubts to Governor [Valentina Matviyenko] about this project," she said. "They told the governor that it violates the city's protection zone. But Matviyenko wouldn't listen, saying she had been asked to approve it, she would do it and she didn't care."
 Matviyenko's spokeswoman had no comment Thursday.
 The permit for the hotel was reportedly one of the last documents signed by City Architect Oleg Kharchenko before he left Matviyenko's team in June 2004.
 In support of their position, the residents cite the federal Land Code, under which the Lopukhinsky Garden is considered a plot of land for public use, a status that was conferred on it by City Hall in September 1993. 
 In 2002, the garden was included in a list of protected sites of federal significance that was approved by the federal government. The list mentions the garden itself, its system of ponds, and the holiday house of pre-revolutionary merchant Vasily Gromov. The boundaries of the zone were defined by a government decree issued on July 20, 2001.
 New Technologies owned a water pavilion of 239 square meters in the garden before acquiring the plot for the hotel.
 "For some strange reason, a private company got in one go a plot of land 30 times bigger than it originally owned," Likhanova said. "And it got it without any competition or open sale a few months after a City Hall regulation came into force in June last year that stated such deals could only be signed after an open tender," Likhanova said.
 New Technologies could not be reached for comment Thursday.
 City Hall officials responsible for construction planning seemed unable to explain how the permit could have been issued.
 "I found out about it a week ago," Boris Nikolashchenko, head of the First Construction Workshop at City Hall's committee for construction planning, said Thursday in a telephone interview. "According to the city plan, there should be a highway built nearby, which would extend the Pesochnaya Embankment, and is planned in a way that the road would go overhead without cutting any trees.
 "It was a mistake to give a plot of land for construction of this type in this location. This is a calm and nice place that would be harmed by things like this. There are projects that fit certain places and those that do not. This one doesn't," he said.

TITLE: Small Businesses Slam Big Cities
PUBLISHER: Staff Writer
TEXT: MOSCOW - Affluent cities such as St. Petersburg and Moscow are among Russia's most hostile environments for small business, according to a report published Wednesday.
 
A survey of 4,350 entrepreneurs in 80 of Russia's 89 regions found that the northern Yamal-Nenets autonomous district and Bashkortostan were the top two places to run a small business. St. Petersburg ranked No. 68 and Moscow No. 77.
 The survey also found that Russian entrepreneurs fear bureaucrats more than criminals, avoid taking out bank loans and do not bother taking business disputes to court. The report, the first of its kind, was presented by Opora, the lobby for small and medium-sized business, and VTsIOM polling agency.
 The survey revealed an underlying fear of tax authorities and deep-seated distrust of the legal system.
 "We are sounding the alarm," Opora president Sergei Borisov told reporters. "If such tendencies continue we will see the fading out [of small business]."
 There are 4.7 million individual entrepreneurs, as well as 952,000 small businesses, which account for 10 percent to 12 percent of Russia's gross domestic product, according to Opora.
 The researchers faced the difficult task of comparing regions as diverse as the two wealthiest cities, Moscow and St. Petersburg, and hardscrabble Ingushetia. "What small businesses in Moscow consider bad is perfect bliss for small businesses in Voronezh," the head of VTsIOM, Valery Fyodorov, told reporters.
 The reason for the surprisingly high ranking of regions such as the Arctic Yamal-Nenets district have to do with the relative ease of entering the market and accessing commercial real estate in such regions, the authors said.
 In fiercely competitive markets, on the other hand, businesses have a host of hurdles and costs they do not encounter elsewhere. 
 While 68.2 percent of respondents were positive about their own businesses, entrepreneurs from a number of regions said their financial situation was only "good enough for maintaining the business" - not for developing it further, the report said.
 The survey also found that entrepreneurs across Russia said their most troubling problems were the lack of legal protection and access to affordable office space. 
 Given a choice among criminals, government inspectors and the police, businessmen said their worst enemies were the inspectors, followed by the police.
 The most acute risks for entrepreneurs are a "sharp deterioration of economy on the whole" (64.4 percent); rent hikes (45.2 percent); and changes in the regional legislature (28.9 percent). 
 The authors said these figures were a testament to Russia's economic development, as entrepreneurs had become more concerned with issues such as economic development and fair competition rather than kickbacks to officials or protection rackets.
 The report said a majority of respondents drew a direct link between the entrepreneurial climate and the chances of getting a fair hearing in court. 
 Sixty-one percent said they would not go to court to solve a business dispute. 
 Businessmen in the Far East and the Urals were the most trusting of the legal system, while Muscovites were the most pessimistic.
 Tatyana Ponomaryova, an economist with the Foreign Investment Advisory Service, agreed that distrust in the courts is widespread. But she said the situation is changing.
 "It does make sense to go to court, as hosts of entrepreneurs have seen their interests upheld recently," she said. "And the number is growing."
 Interestingly, the study found that businessmen do not mind when regional authorities take corrupt officials to task in high-publicity trials.
 In Tula region, ranked No. 4 in friendliness toward small business, entrepreneurs welcomed the "rap on the knuckles" for crooked bureaucrats, Borisov said.
 Businesses across Russia struggle with the expense of many financial services, the report said. Only 15.9 percent of small businesses across Russia make use of bank loans, it said, and 48.6 percent of respondents said they had never borrowed from a bank. 
 Lack of accessible commercial property is also among top inhibitors of entrepreneurial activities, with 55.7 percent of businessmen saying rents were unaffordable. 
 The Far East and Siberia were the most affected regions.
 The authors said the report underscored a continuing trend: the richer the region, the more pressure the authorities exert on business. 
 Of all regions, Moscow was hit hardest by tax and sanitary inspectors, with Muscovites spending 11.5 percent of their monthly earnings on kickbacks. In comparison, the national figure stood at 8.9 percent. 
 "In Moscow, officials are greedier and believe they can get more," Borisov said. "I came here to receive a certain amount, and I'll be sitting here until I wear you out," officials often tell businessmen, Borisov said.
 The survey covered 80 of Russia's 89 regions. Chechnya did not make it to the report due to "security reasons," Fyodorov said. 
 "Honestly, there is nothing to look at in the Chechen republic," Borisov said, adding that he hoped the war-torn republic will make it in next year's survey.
 Andrei Nevedeyev, director for economic programs with Delovaya Rossiya, a business lobby, disagreed with the exclusion of Chechnya.
 "The civil responsibility of business is to insist on inclusion of Chechnya into the common economic space," he said.

TITLE: Tax Service Seeks Right to Revisit More Cases
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Constitutional Court has been asked to water down a three-year statute of limitations on prosecuting tax offenses, which would open the door to back tax investigations against almost any company. 
 
The Federal Tax Service has asked the court to lift the protection from firms and individuals who continue to evade taxes. Those recently caught in tax disputes should be fair game for audits stretching back beyond three years, the tax service says in its appeal. 
 The Constitutional Court is to review the appeal on May 26.
 The case is sending chills through a business community already on edge over a series of back tax claims filed against Yukos and other companies.
 Thousands of companies could not pay taxes in the 1990s because tax laws at the time were too complex and often contradictory, tax experts said. 
 So a ruling in favor of the tax service "would leave virtually all major companies vulnerable to back tax charges," Rory MacFarquhar, an economist at Goldman Sachs, said in a research note. 
 The court decided to take the case on April 6, just two weeks after President Vladimir Putin promised during a meeting with business leaders to rein in the tax authorities, which have grown increasingly aggressive. According to the World Bank, the tax service raked in some 470 billion rubles ($17 billion) in back taxes last year. In 2003 it was 150 billion rubles. 
 At the March 24 meeting, Putin also promised to shorten the statute of limitations on reviewing privatization deals from 10 years to three - a change based explicitly on the current statute for taxes. 
 Although the judicial system is nominally independent, the Kremlin effectively has the last say in the hiring and firing of judges, and few believe the Constitutional Court could rule on a decision of this kind without the Kremlin's input.
 "This case will be an important indicator of the extent to which the Kremlin is willing to rein in the tax service's appetite," MacFarquhar said.
 The appeal is a direct result of the Yukos affair. Last year, tax authorities demanded that Yukos pay back 19.2 billion rubles ($690 million) in taxes and fines that they said were owed for 2000. In March, however, a three-judge panel ruled that the claim breached the statute of limitations provision.
 That prompted the Federal Tax Service to appeal on constitutional grounds to the Moscow region's Federal Arbitration Court, which will argue the case before the Constitutional Court. 
 The Federal Tax Service says the statute of limitations clause in the Tax Code contradicts two articles in the Russian Constitution: a requirement that everyone pay their taxes in full and a guarantee of equality before the law. 
 Allowing malicious - or, in legal terms, "non-bona fide" - offenders to escape justice while others continue to pay their taxes in full would be tantamount to giving them special treatment, the tax service says. 
 Alexei Bogomolov, senior tax manager at Grant Thornton in Moscow, warned that allowing tax authorities to review tax payments from before 2002 would play havoc with the investment environment, undermining everything from mergers and acquisitions to decisions regarding business ventures.

TITLE: IN BRIEF
TEXT: Ren-TV for Sale
 </b>

(Bloomberg) - MOSCOW Bertelsmann and Evrofinance-Mosnarbank are in talks to buy Ren-TV, a television channel that broadcasts in more than 800 cities, Vedomosti reported, citing people familiar with the transaction.
 
Ren-TV, in which founders Irena and Dmitry Lesnevsky own 30 percent and state-run Unified Energy System holds 70 percent, may be sold next month, the newspaper said, citing unidentified people in the media business and people close to the Kremlin.
 Evrofinance owns a stake in NTV, controls St. Petersburg's Pyaty Kanal television and has 50 percent of Prime-Tass, a business news wire, Vedomosti said. Evrofinance and Bertelsmann's RTL Group declined to comment, the newspaper said.
 
 
<b>For the Record
 </b>

Ukraine may nationalize an oil refinery owned by BP Plc's Russian venture TNK-BP, Interfax reported.
 
<b>
 </b>

Turkey wants Russia to pay off its $330 million debt to the country with aircraft, Interfax reported.

TITLE: GM-Avtovaz Plan For New Auto Parts Plant
PUBLISHER: Staff Writer
TEXT: While other foreign carmakers are still deliberating over whether to start production in Russia, General Motors has committed itself to a second joint venture factory with Avtovaz, work on which may begin by the end of this year.
 
Analysts say the move will ameliorate GM's production and pricing policy on the Russian market ahead of the arrival of assembly plants by the company's global competitors.
 Warren Browne, head of GM in Russia and the CIS, said negotiations for the construction of an engine and transmissions plant with a projected annual output of 300,000 car components have been completed.
 Speaking at a news conference in St. Petersburg, he declined to reveal the investment involved, formerly estimated by GM at about $400 million, saying that a thorough investigation was needed to avoid possible pitfalls before the final figures and details can be revealed. 
 &quot;The final date for our announcement will be end of this year, perhaps earlier,&quot; Browne said. &quot;Negotiations are completed. However, the working of a components plant is a much finer, complex process than that of an assembly plant. We'd like to work through details, possible set-backs before setting a launch date.&quot; 
 GM have been considering building an Avtovaz joint venture engine and transmissions plant alongside their assembly factory in Tolyatti since former GM-Avtovaz CEO John Milonas announced plans in May 2004. Last month business daily Vedomosti reported that the announcement regarding the new engine plant in Tolyatti could be made in May, as soon as GM decided whether or not to buy out struggling Italian manufacturer Fiat.
 The buy-out decision would affect the fate of an existing Hungarian engine plant GM held shares in together with Fiat, the output of which would affect GM-Avtovaz plans for its Russian factory, the paper said.
 Speaking at the launch of GM's largest dealership in the Northwest, Multimotors, which will present a full range of the U.S. manufacturer's brands, Browne said GM will concentrate on providing all the manufacturer's top models immediately after their release.
 With an eye on Toyota, DaimlerChrysler, Volkswagen and Nissan beginning production in Russia in the near future, GM aims to make sure one of the world's most lucrative growing car markets will have &quot;the most current&quot; models at close to U.S. prices. 
 &quot;I expect all my competitors to come in with their [leading] global models,&quot; Browne said. &quot;GM's strategy for Russia is to get current with the latest in global production.&quot;
 In accordance with the strategy, the automaker provided Multimotors, part of Evrosib holding, with the latest Chevrolet STS model, which had its U.S. release last month. The car is the only one of its model licensed for sale in Russia, and will cost just over $50,000, although no price has yet been fixed. 
 While the production of domestic passenger cars in Russia fell by 5.5 percent in the first quarter of this year to 244,000 units, consumer interest in foreign vehicles continues to rise. Last year 350,000 new foreign cars were sold in Russia, a rise of 80 percent on the previous year. 
 The growth rate is expected to be slower, yet still reach 40 percent in 2005, spurred by what some foreign carmakers have called western consumption patterns. The figures have already lured Ford to open an assembly plant in the Leningrad Oblast in 2002 and GM to set up in Tolyatti a venture with Avtovaz to make the Chevrolet Niva and, since fall 2004, Chevrolet Viva saloons. 
 One of the main problems for the assembly plants of foreign manufacturers in Russia, however, has been a lack of local component producers of sufficiently high quality.
 &quot;When the auto manufacturer comes to a new country, it expects to be able to pick the local component makers,&quot; said Carl Watts, operations manager at the International Finance Corporation, who has worked with suppliers to a major foreign car producer in Russia.
 &quot;In Russia, the manufacturers have arrived, but most local suppliers need assistance to improve their quality - an assistance that many auto makers do not normally provide,&quot; he said. 
 About 90 percent of Ford components are still produced outside of Russia and have to be imported. 
 The lack of suitable local manufacturers has been said to be one factor deterring Toyota from setting up an assembly plant in Russia. Behind the scenes, the Japanese carmaker has also sent representatives of its main car parts suppliers to visit Russia. 
 Yelena Sakhnova, an auto analyst at United Financial Group, said the opening of a plant to manufacture car components, especially ones as important and costly as engines, would pitch the U.S. firm far ahead of its global competitors on the Russian market. 
 &quot;This is not the first components factory in Russia by a foreign company, but it will be absolutely the largest such project, a very major investment in GM's business here,&quot; Sakhnova said. 
 By 2008, GM could be reducing their prices in Russia through lower costs of components, while Toyota and VW assembly may only be able to start operation at this time, she said.

TITLE: Budget Airlines Descend on City
PUBLISHER: Staff Writer
TEXT: At least two budget airlines are expected to enter the St. Petersburg market just as the city's Pulkovo aviation company splits into an airport and an airline this summer.
 
The airlines hope the separation will allow for a more flexible and productive cooperation with St. Petersburg's airport.
 Aeroflight, a newly formed German airline, will offer service between St. Petersburg and four German cities starting May 1, Cornelia Weisspflug, the company's spokesperson said Tuesday.
 Tickets will be priced from 109 euros ($143) for a one-way trip to Hamburg or Berlin, and 129 euros ($169) to Frankfurt and Dusseldorf, Weisspflug said.
 Aeroflight, which positions itself as a &quot;good value for money&quot; airline will provide its flights once a week, on Sundays, with either early departures or late arrivals.
 Budget operator Germania said it may also initiate flights to the city in time for the summer season, pending Pulkovo's cooperation.
 &quot;We are trying to solve technical problems and determine time-slot availability in order to enter the local market,&quot; Gunter Seibt, a Germania representative, said Wednesday in a phone interview from Germany. 
 Both Aeroflight and Germania tend to offer tickets cheaper than traditional operators such as Lufthansa, although the German-based mainstream airline said it was not worried about increased competition from budget firms.
 &quot;The amount and timing of our flights allow us to provide the most convenient options to our customers, which is what counts for business travelers,&quot; Gunther Ott, Lufthansa's regional director for Russia and CIS, said at a recent news conference, which marked the company's 25-year anniversary of providing a service to St. Petersburg.
 Lufthansa operates three daily flights to Frankfurt, and tickets start from about 400 euros ($526).
 St. Petersburg-based travel agency Sirena saw the arrival of the budget operators as attractive mostly to a niche market.
 &quot;Aeroflight's and Germania's routes will attract those travelers who would accept certain inconveniences to save money,&quot; said a representative from Sirena. 
 However, with the reorganization of Pulkovo in progress, few of the airlines have escaped inconveniences. Both budget and regular operators say Pulkovo's high costs and significant limitations in space and infrastructure impede their expansion on the local market.
 Lufthansa had to cancel its flights to Munich and Dusseldorf this year due to terminal congestion and a lack of convenient flight hours, which made the routes ill-suited for transfer passengers. Considering transfers constitute up to 70 percent of all travel to the two German cities, the flights proved unprofitable, the company said.
 A solution could be to expand the airport, as suggested by Lufthansa, or at least to make small changes in infrastructure. Some steps forward have been made, airlines note, however substantial airport upgrades will be necessary if St. Petersburg is to realize its ambition of becoming a major tourism center in five years.
 &quot;Pulkovo is yet to see the installment of the electronic booking or E-ticketing system,&quot; said Lufthansa's Ott. The system, which reduces paperwork for traditional operators and cuts costs for budget airlines, is already operating in Minsk and Kiev international airports.
 Airlines said they hope for a more productive dialogue with the airport upon its separation from the Pulkovo airline, which is expected to be signed July 1. 
 &quot;The airport will become more independent and able to make unbiased decisions,&quot; Seibt said.
 Lufthansa said it was optimistic about future improvements. &quot;There are some airports in Russia where booking is still done by hand even, and there is nothing that cannot be improved in the future,&quot; Ott said.

TITLE: Pekar: Major Reorganization to Boost Sales
PUBLISHER: Special to The St. Petersburg Times
TEXT: Major bread and confectionery producer, St. Petersburg-based Pekar, has undergone a major overhaul of distributors and personnel in an effort to rejuvenate the company's operations.
 
The company said Tuesday it had to cancel more than a dozen of its distributors and sack 300 workers, including a number of top managers, in the last year due to mismanagement of product distribution and marketing.
 Many of Pekar's distributors' lack of market knowledge and poor control over where the products were being retailed, which led to unforeseen price wars, affected the efficiency of the bakery.
 &quot;We have limited the number to two large distributors, [Petmol's former trading company] Holding 78 and Megapolis,&quot; Yuri Seleznyov, general director of Pekar, said Tuesday.
 In 2005, Pekar will allocate a tenth of its annual $60 million turnover, to advertising, marketing and logistics.
 The news that last year's average monthly income in the city rose by 15 percent to 8,625 rubles ($311), according to City Hall statistics, has not boded well for the commodity products market.
 The knock-on effect of growing affluence has meant lower bread sales and a need for tighter operations and higher ad costs, said Alexei Medvedev, commercial director of Pekar.
 Following in the footsteps of rival bakery Khlebny Dom, Pekar will begin a $6 million rebranding program this year.
 In comparison, Khlebny Dom has allocated just $391,000 for rebranding, a spokeswoman for the bakery said Tuesday. Khlebny Dom holds a 31 percent share of the city's bread and pastries market.

TITLE: IN BRIEF
TEXT: Metro Plans 2nd Real
 </b>

ST.PETERSBURG (SPT) - German Metro group said it plans to invest 30 million euros ($37 million) into the construction of a second Real hypermarket in the city by 2007.
 The new store is set to open in the Severny Mall shopping center, the construction of which officially began Wednesday.
 Real will carry a 35,000-item goods selection and occupy 16,000 square meters of floor space. The hypermarket will be the major anchor tenant of the new center, said Real's general director Torsten Fogt in a statement.
 "We are pleased to see the beginning of our second project in St. Petersburg as we believe the city to have great potential," he said, Interfax reported.
 Metro group is the third largest retailer in the world, and its first Real hypermarket is set to open in St. Petersburg in 2006.
 
 
<style text>FOR THE RECORD
 

City-based National Trust bank (formerly Mentatep bank, the largest Yukos shareholder) said Wednesday it will re-register its head office in Moscow. (SPT)

TITLE: Following Europe's Caucasus Lead
TEXT: While it is prevailing in the military struggle in Chechnya, Russia is losing the struggle for democracy and socioeconomic development in the North Caucasus. As Moscow and its Chechen allies have placed increasing pressure upon militants and extremists in Chechnya, the low-intensity conflict has been spreading outward through neighboring republics where frustrations have been increasing. Survey research shows that there are many causes of Islamist extremism in this region, but chief among them are poverty, unemployment and political corruption. 
 Focusing narrowly on military and political control, Moscow has largely ignored the socioeconomic roots of extremism. Russia faces staggering challenges in the reconstruction of war-ravaged Chechnya, but conditions in the neighboring republics are scarcely better. Grinding poverty, collapsing infrastructure, environmental degradation and unemployment as high as 80 percent breed anger and despair which, in turn, nourish extremism.
 In the aftermath of the bloody Beslan hostage tragedy last September, President Vladimir Putin's envoy to the Southern Federal District, Dmitry Kozak, quietly signaled that the Russian government might welcome international economic assistance in the North Caucasus. His remarks were a watershed in the history of this deeply troubled and highly strategic region along Russia's southern border. Kozak had previously insisted that the problems of the region were Russia's internal affairs and off-limits to the international community. After the carnage at Beslan, however, the Kremlin seemed to realize that it needed help.
 Then, in December, Putin told German Chancellor Gerhard Schroeder that he would welcome Western economic assistance for the North Caucasus. So began European efforts to mount programs of assistance well beyond the current humanitarian aid. Following meetings with Russian officials, senior members of the German Bundestag proposed a program for reconstruction assistance from Europe.
 A delegation from the European Commission is currently preparing a needs assessment plan inside Chechnya, and the commission has already approved 22.5 million euros ($29.3 million) in humanitarian aid for displaced persons in Chechnya, Dagestan and Ingushetia. Meanwhile, Britain has offered Pound10 million ($20 million) in support for vocational training for young people in the North Caucasus. Meeting last week with the EC delegation, Chechen President Alu Alkhanov welcomed the EU initiative for reconstruction projects. He focused on rebuilding schools and orphanages, as well as healthcare, agricultural and waste disposal facilities.
 It is important that the United States join Europe in this new approach. When it was locked in an ideological struggle with communism, the United States did not hesitate to assist any part of the world in its effort to offer a constructive alternative. Now that it is locked in a new ideological struggle with Islamism, it should be no less hesitant. 
 The West needs to help Russia assist small businesses in the region. If there is one single, simple thing that would help the region, it is the construction of plants to process farm produce in remote areas. Mountain villages have underdeveloped economies. People live primarily by subsistence farming, but they grow large quantities of excellent fruit and vegetables. The problem is that they have no local markets for their produce and little transportation. When they do get their produce to market, over perhaps 80 kilometers of abysmal roads, then much of it is damaged and lost. Highland plants would create local jobs, provide goods for local markets, increase local production, stimulate local economies and thereby reduce poverty, radicalism and militancy. True, the region poses daunting problems of oversight and security, but these are not insurmountable.
 Bashing Russia over human rights and other abuses in the region has served only to strengthen the positions of hard-liners on all sides. If we in the West are truly concerned about the people of the North Caucasus, then it is time to roll up our sleeves and offer them assistance. 
 
 <i>Robert Bruce Ware conducts field research in the North Caucasus and is an associate professor at Southern Illinois University Edwardsville. He contributed this comment to The St. Petersburg Times. </i>

TITLE: Real Justice Is
 Best Antidote
 For Injustice
TEXT: THE NEW YORK TIMES
 The trial of the former Russian tycoon Mikhail Khodorkovsky is nearing a verdict. Assuming, as everyone does, that he will be found guilty of fraud and tax evasion and left in prison, let's take stock: Russia has one fewer oligarch. Most of his Yukos company, which used to pump 2 percent of the world's oil, has been gobbled up by companies connected to the state. Russia's image and the standing of President Vladimir Putin have taken a major beating because the trial had the air of politically motivated vengeance and looting. Investor confidence has been shaken. So was it worth it?
 Since his arrest 18 months ago, Khodorkovsky has played the role of a classic victim of Russian authoritarianism, of an honest businessman victimized by a predatory regime. But the story of how the oligarchs came about is somewhat different, and in many ways, Khodorkovsky was the template for the breed. A member of the Communist Youth League when the Soviet Union began to fall apart, he quickly proved adept at taking advantage of the free-for-all that followed. He became one of the new entrepreneurs selected by Boris Yeltsin in 1995 for an outrageous deal in which businessmen were handed vast control over Russia's natural resources in exchange for financing Yeltsin's political survival. Khodorkovsky was arguably the most successful. At the time of his fall, Yukos was among the most respected businesses in Russia, both for its performance and its propriety.
 Certainly the government has a right and an obligation to restore its authority over an economy that had fallen prey to gangster capitalism and corruption. 
 But such a process can be useful only if it represents the ascendancy of law over banditry. That is especially critical in a country like Russia, where the rule of law is so little known and so badly understood. We criticized this trial not necessarily because we believe that Khodorkovsky is innocent, or that oligarchs should be immune from the law, but because it was not a fair trial, and a fair trial would have been so valuable to the development of Russia. Khodorkovsky might well have gone free because the law is so vague and inconsistent and because, in the end, it was the government that handed him his riches. But the gains for the rule of law would have been great.
 There is still time for the judge to redeem the process with a verdict that is perceived to be just. 
 
 <i>This comment originally appeared as an editorial in The New York Times. </i>

TITLE: Killing the Marshrutka Will Spare Many Lives
TEXT: The St. Petersburg government's plan to cut many private transport routes and replace hundreds of dangerous fixed-route taxis, or <i>marshrutkas</i>, with bigger and more comfortable buses seems like the light at the end of the tunnel.
 The marshrutka has in recent years earned a reputation of being a killer van. This reputation is often linked to one particular type of vehicle, the Gazel produced at the Gorky Auto Plant, which is widely used by private transport companies in CIS cities.
 I do not really understand why private companies choose this particular vehicle. It's my guess that they consider it cheaper than other similar vehicles.
 But that is not exactly correct. A Gazel costs 230,000 rubles ($8,200) on average, about half the price of a Ford vehicle of the same type. The problem is that in two years the Russian minivan turns into a mobile pile of scrap metal. Its foreign counterparts run for years provided routine maintenance is performed from time to time.
 The Gazel is an example of the artistry of post-Soviet engineering. I remember when I first saw one of the latest models of this invention a couple of years ago I thought that the engineer who designed the car was most definitely drunk. I drew this conclusion after failing to find the handle to open the door on my first attempt. I had expected it to be on the right, as in all other cars. In Gazels, for some reason, it's on the left side of the door. This makes potential passengers bustle outside the window like caged animals as they try to figure out how get into the machine.
 Sometimes the doors just fall off, resulting in the driver looking sad and passengers making unpleasant comments.
 This month the Moscow city government started large-scale inspections of Gazels across the capital. The results stunned me. In two days in the first week of April, 564 vans out of the 5,366 Gazels in Moscow were deemed unroadworthy. Eighteen minivans were being driven with broken steering wheels, seven had brakes that did not work, 42 had broken wheels, the headlights on 180 were not working, 45 cars had broken door locks, 90 did not have necessary equipment such as fire extinguishers or medical supplies, and 64 had been modified so they could carry more passengers without taking safety into account. A total of 1,888 drivers broke traffic rules, including 22 that drove on the wrong side of the road. One driver was drunk.
 This data is for only two days of the operation, which was scheduled to last until mid-April. The results have not been released yet, but I would not be surprised to see even more outrageous numbers in the near future. I wish a similar operation would be mounted in St. Petersburg.
 With statistics like these, it's no surprise that people are killed almost every week in Russia in accidents involving Gazels. In these conditions how could anybody be surprised that on March 2 nine Gazel passengers well killed in the Tula region and another passenger died later in the hospital after a wheel fell off the Gazel and the van then smashed into a cargo truck.
 As one friend pointed out this approach to the maintenance of Gazel cars has its roots in the perceived value of human life in Russia, which is nothing.
 &quot;A person in Russia is worth no more than a kilo of tomatoes. Ten people killed in a marshrutka accident? In Russia, it sounds the same as if 10 kilos of tomatoes were smashed. Who cares?&quot; my friend said.
 A big question mark also hangs over the skills of marshrutka drivers. Judging by how they drive, I have the impression that they took only one lesson to get their driving license. It was probably the one about how to start a car.
 In the end, the introduction of new, bigger buses in St. Petersburg is just the first step toward solving the problem. To make private transportation in St. Petersburg safer and more comfortable, City Hall should introduce strict rules for servicing vehicles and training drivers. If this isn't done, the number of victims dying in traffic accidents will only grow each year.

TITLE: Musical stew
PUBLISHER: Staff Writer
TEXT: SKIF9, or the Ninth Sergei Kuryokhin International Festival, the biggest and most notorious fringe music and arts event in St. Petersburg, opens this week.
 
The festival honors the late musician Sergei Kuryokhin, who began his career as a member of the free-jazz Anatoly Vapirov Trio in the late 1970s. Koryokhin moved on to solo concerts and work with the then-leading Soviet underground band Akvarium in the early 1980s before finally setting up his own big project Popular Mechanics. A flexible multi-media collective featuring rock musicians, string ensembles and military bands, stage performances by the Popular Mechanics sometimes even featured a live goat. 
 Kuryokhin died of a heart condition at the age of 42 in St. Petersburg in July 1996.
 Past local SKIFs have been held, alternatively, at LDM, or the Palace of Youth, and Baltiisky Dom theater. 
 But starting this year SKIF will be held in Priboi, a former cinema that the city lent to the Sergei Kuryokhin Foundation in September to be transformed into the Center for Contemporary Arts.
 Because the Soviet-era movie theater was previously in a pitiful state, with no electricity for example, the organizers have asked the public to be patient if the new location should have any problems at the start.
 One of the festival highlights is Das Erste Wiener Gemuseorchester, or The First Vienna Vegetable Orchestra. True to its name, the eight-member &quot;vegetable orchestra&quot; use vegetables to create its instruments, which include the cucumberophone, the carrot recorder and the radish marimba.
 &quot;We believe that we can produce sound that cannot be [easily] produced by other instruments. You can hear the difference,&quot; says the band's website. &quot;It sometimes sounds like animals, sometimes just abstract sounds.&quot;
 For its performances the Vegetable Orchestra employs a chef so that the audience can be treated to soup (described as &quot;tasty and very special indeed&quot;) made from the instruments after the show.
 Strangely, the band manages to produce coherent music, as a sample sound file on its web site demonstrates. 
 Das Erste Wiener Gemuseorchester is due to perform at 7 p.m. on Friday.
 The Ex, arguably the Netherlands' foremost punk/improv band, has come to Russia after three years of negotiations and expectations. 
 According to the band's web site, &quot;Starting out as an anarcho-punk band from Amsterdam and Wormer, The Ex has developed over the years into a melting pot of divergent musical styles, interweaving noise, folk, jazz and ethnic music, under one unique umbrella: Ex-music. 
 &quot;Other features are the discordant, highly rhythmic guitar work, the rolling, almost African, drumming style and the furious way in which Sok delivers his often sarcastic lyrics.&quot;
 The Ex performed in St. Petersburg in spring 1990 on the invitation of Estonia's avant-rock band Ne Zhdali.
 Since double-bassist Rozemarie quit last month, Massimo Pupillo of Zu will replace her. The Ex will play at 11 p.m. on Friday.
 From London comes violin player and composer Alexander Balanescu who will perform solo, rather than with the Balenescu Quartet as the festival's promoters initially thought.
 As his official biography reads, Balanescu &quot;has managed to contribute to the development of a particular philosophy of new music, a music of the future, which bridges the gap between different fields: classical, folk, electronic, jazz and pop music.&quot;
 Born in Bucharest, Romania, Balanescu performs concert music but also works with film makers, choreographers, theater directors and fashion designers. 
 He has collaborated with such diverse musicians as John Lurie, Gavin Bryars, Michael Nyman, Jack de Johnette, John Surman, Andy Shepherd and Carla Bley. His exploits in the pop world include supporting the Pet Shop Boys and recording the music of David Byrne, Kraftwerk and the Yellow Magic Orchestra.
 Balanescu is scheduled to perform at 11 p.m. on Saturday.
 World music events will be headlined by Varttina, probably Finland's best-known folk ensemble, which recently co-composed music for the British stage musical &quot;The Lord of the Rings,&quot; set to debut in London's West End later this year. 
 Varttina will perform at 9 p.m. on Sunday. 
 For the whole of Saturday, the movie theater's foyer will be given over to WORM, an unconventional sound and image art collective based in Rotterdam, the Netherlands.
 The history of SKIF began in January 1997 when the festival was launched in New York, originally as SKIIF, or Sergei Kuryokhin International Interdisciplinary Festival. 
 Its founder, Russian emigre cellist Boris Rayskin, who had played with Kuryokhin in St. Petersburg, came up with the idea of embodying the principles of &quot;total performance&quot; developed by Kuryokhin's Pop Mechanics by bringing bands and artists from diverse fields and letting them perform at the same festival. 
 Cecil Taylor, David Moss and Sonic Youth's Thurston Moore took part in the first event.
 Rayskin committed suicide in March 1997, which led Kuryokhin's widow, Anastasia Kuryokhina, to move the festival to St. Petersburg in 1999. Kuryokhina formed the Sergei Kuryokhin Foundation to promote it.
 Some of the acts taking part in the festival will also perform in Moscow, where two Kuryokhin-related festivals will also take place. The Moscow events are a series of more straightforward music nights, entitled FSK (which can mean either the Sergei Kuryokhin Festival or the Festival of Contemporary Culture in Russian, depending on which you prefer) which run at avant-garde center DOM through April 28. Promoters say that unlike St. Petersburg's festival, FSK features serious rather than popular genres.
 Moscow's short SKIF9 at Klub Na Brestskoi will run for three nights, through Sunday.
 Watch out for some festival acts at St. Petersburg clubs, including Vienna, Austria-based, Tuvan-folk influenced improviser Sainkho and Ukraine's Hutzul-folk/ska band Perkalaba at Platforma on Friday and Saturday respectively. Denmark's &quot;ethno-terror&quot; act Teppop and world music/electronic one-man band Goodiepal can be seen at Fish Fabrique, also on Friday and Saturday.

TITLE: CHERNOV'S CHOICE
TEXT: The annual SKIF, or Sergei Kuryokhin International Festival, is probably the highlight of St. Petersburg's alternative music calendar and dozens of foreign acts come to the city to perform at the event. It opened with a video art program on Thursday and runs through Sunday.
 
Last year's SKIF was probably the worst in its nine-year history so expectations are high this year with such bands as The Ex among the festival's headliners.
 Although the event is notorious for its chaotic organization, the promoters claim that this year at least concerts on the Main Stage will start as planned and one full hour is reserved for every act. See article, pages i.
 Local promoters failed Thursday to confirm a press report that <strong>The White Stripes</strong> will perform a one-off local concert on June 27.
 &quot;In theory, there's such an opportunity,&quot; said Ilya Bortnyuk of Svetlaya Muzyka (Light Music). 
 The Detroit minimalist rock duo has recently recorded its fifth album &quot;Get Behind Me Satan,&quot; due out on June 6, while the single &quot;Blue Orchid&quot; was released as an exclusive iTunes download earlier this week.
 It has been reported that The White Stripes will premiere the album with concert dates in Mexico, Guatemala, Chile, Columbia, Brazil and Argentina in May through early June and headline the Glastonbury Festival in the U.K. on June 24. The band is due to perform in Moscow on June 26.
 Meanwhile, <strong>Franz Ferdinand</strong> has been confirmed to perform at Manezh Kadetskogo Korpusa on May 19. The mega-selling British band will also play at the B2 Club on May 20 and Maxidrome Festival on May 21 in Moscow.
 Local band <strong>Dva Samaliota</strong>, an outfit whose members are involved in the Griboyedov and Datscha clubs, has launched a small hostel intended primarily for use by Western bands coming to the city. It has three bedrooms that accommodate 18 people and is called Hotel California.
 &quot;We are musicians ourselves and we know well what musicians need,&quot; said bassist and singer Anton Belyankin, who co-owns the hostel with drummer Mikhail Sindalovsky. 
 &quot;There are lots of musicians who come to the city and they all have to stay somewhere, but local hotels are either too expensive or just dreadful.&quot; The first guests were the Spanish band Mus who performed at Platforma earlier this month.
 <strong>PORT</strong> club will remain in its current location despite the rumors that the building will be turned into a new hotel, according manager Pavel Klinov. 
 &quot;There are also 100 apartments and a bank in this building, so it's not so easy to do,&quot; he said.&quot;I think we'll stay until the rental agreement expires in 2007.&quot;
 Arguably the leading punk band in town, <strong>PTVP</strong> recently took part in a tribute CD to Vladimir Mayakovsky (1893-1930) called &quot;Mayakovsky Zhivoi!,&quot; or &quot;Mayakovsky is Alive!&quot; using a poem by the revolutionary poet to make its own statement about the Chechen war. The band will appear at Deep Sound on Saturday. 
 
 <i>- By Sergey Chernov </i>

TITLE: Mellow yellow
PUBLISHER: Special to The St. Petersburg Times
TEXT: What used to be Turkish bistro Sultan, located almost on the corner of Gorokhovaya Ulitsa and Sadovaya Ulitsa, is now the modest restaurant Shafran. It is named after saffron, the uniquely expensive yellow spice gathered from the stigmas of springtime crocus flowers in the Mediterranean, Central Asia and the Far East. It's rich honey fragrance is the taste of spring.
 
Shafran's renovation was completed recently, and some of the old wall fixtures from Sultan are still to be seen although many design features and <i>objets d'art</i> have been added to enhance its interior. Shafran has four halls: the first continues to operate as a bistro, the second and the third are more formal restaurant halls, and the last is a room for relaxing on huge sofas with cushions and smoking pungent tobacco through exotic-looking hookahs - a pastime Petersburgers seem to have taken up with zeal.
 Shafran is popular for parties, which usually occupy one or two of its rooms and involve belly dancing to loud Turkish music. But this doesn't happen every day and there is probably no need to make a reservation. 
 The menu is extensive, with a good selection of Turkish and Azeri specialties and Georgian wines priced at, on average, 80 rubles ($2.87) a glass. Starters range in price from 50 rubles ($1.78) to 130 rubles ($4.64), and the Georgian red bean salad <i>lobio</i> can make an excellent opener to a meal. Lobio can be made in dozens of different ways: moistened with herb vinaigrette, pureed with tangy plum sauce or mixed with lettuce and celery. But Shafran's lobio (60 rubles, $2.14) turned out to be crude and small, and arrived unpleasantly cold.
 Its Greek salad meanwhile (130 rubles, $4.64), though made with good-quality Feta cheese, could not resist the overbearing charm of Russian dill.
 The main courses section of the menu offers a wide variety of beef, veal, lamb and poultry dishes, along with a good selection of <i>shashlyks</i> (shish kebabs). The lamb dish with vegetables (170 rubles, $6.07), called Khashama, was a piece of lamb on the bone, stewed with potatoes, carrots and onions, and was gently palatable. 
 After I had eaten the meat from the bone, I left aside the fats and other suspicious parts of the joint - but the waiter asked me if I was going to suck on the bone or not. I was rather surprised by the question, said no, and asked him why I would do such a thing. The waiter explained that the best parts in such a dish are very near the bone - that's why it's considered polite to take the bone in hand and suck on it, enjoying all the meaty juices. Well, it's never too late to learn.
 Dessert at Shafran is certainly worth mentioning, and most of the cakes and sweets are on display in the second room. Shafran's <i>pakhlava</i>, an Armenian honey and walnut pastry perhaps more familiar in its Greek incarnation<i> baklava </i>(40 rubles, $1.42), is certainly one of the best you can eat in St. Petersburg - warm, not too sweet, and soft, with a hint of spices. There are at least two kinds of pakhlava available, along with a large variety of other Central Asian desserts and sweets.
 Finally, no meal of this kind would be complete without tea, especially since one can choose from quite a few varieties. When ordered by the cup as opposed to by the pot, it arrives in tiny, finely-made glasses (15 rubles, $0.53) which are graceful and fragile. Coffee is also available. 
 One gripe about Shafran is that the place is obviously overstaffed. There are simply too many waiters, waitresses and administrators. At any point in the meal you may discover one lurking directly behind your back, standing around casually and looking for something to do. This means that the wait staff pay more attention to their customers than is usual, and their intrusions may indeed be considered unacceptable. It is best to be firm with your choices and then mellow out.

TITLE: Russia's James Bond
PUBLISHER: Special to The St. Petersburg Times
TEXT: The games are over. Now it's the real Fandorin in the real deal.&quot;
 
This is the slogan for the latest blockbuster adaptation of one of Boris Akunin's bestselling novels that featuring 19th century Russian detective Erast Fandorin.
 &quot;The State Counselor,&quot; which went on general release Thursday, comes hot on the heels of &quot;Turkish Gambit&quot; - the most successful Russian film ever - and clearly stakes its claim as the best of the bunch of movies and television series now jumping on the Fandorin bandwagon. No single actor has become the definitive Fandorin, a sort of James Bond for the Russian Empire, but superstar Oleg Menshikov, who takes the role in &quot;The State Counselor,&quot; is taking a shot at it.
 Director Filipp Yankovsky, speaking at the film's St. Petersburg premiere last week, said Menshikov is ideal.
 &quot;Only he can properly depict Fandorin's loneliness. Only he can tell the spectator the story of how, for the sake of devotion to a noble aim, to his native land and to justice, a noble man can find a compromise,&quot; Yankovsky said.
 &quot;The State Counselor&quot; co-stars Russian cinema behemoth Nikita Mikhalkov as Duke Pozharsky. The prolific writer, director, and actor, whose &quot;Burnt by the Sun&quot; won an Oscar in 1994 and who cast himself as Tsar Alexander III in the bloated epic &quot;The Barber of Siberia&quot; (also starring Menshikov) in 1999, produced &quot;The State Counselor,&quot; recruiting Akunin to write the screenplay.
 &quot;We tried, within the constraints of a detective story, to develop each of our roles and to understand what kind of people they are,&quot; said Mikhalkov at the St. Petersburg premiere. 
 &quot;We wandered far from the novel, and if our attempts to understand why certain characters behave the way they do comes out of the film, then I will have scored an important victory. We want to combine a diverting plot with [an exploration of] human relations and characters.&quot; 
 Mikhalkov said Yankovsky, the 37-year-old son of legendary actor Oleg Yankovsky with just one previous feature film under his belt, brings a contemporary feel to the movie.
 &quot;Fillipp understands the malleable possibilities of modern cinema language and combines it with a classical approach, since it is important not only how the film is shot, but also what the characters say, &quot; Mikhalkov said.
 Mikhalkov applied his character-driven approach to his own performance.
 &quot;With Akunin's permission I broadened my character because I'm quite sure it's not interesting to just play the scoundrel. And for every thinking actor it's impossible to act only evil or, which is worse and more difficult, good. Stanislavsky said find bad in good and good in bad. It's impossible to act if you don't try to explain the actions of your character, to justify him. Akunin understood and supported this approach,&quot; Mikhalkov said.

TITLE: Who decides?
PUBLISHER: the new york times
TEXT: As the camera restlessly circles the sky and the ocean, taking in the radiance of northern Spain, &quot;Mar adentro&quot; (&quot;The Sea Inside&quot;), the story of a quadriplegic activist fighting for the right to die, struggles to transcend the disease-of-the-week genre to which it belongs. Yet there is no escaping the fact that the true story of Ramon Sampedro, a former ship's mechanic seeking a final exit after three decades of agonizing immobility, is defined by its theme. 
 
To its credit, the movie avoids becoming a formulaic dialogue that pits religious and secular cheerleaders against one another in predigested arguments. Even so, the characters (some of them composites) often feel like schematic formulations intended to balance the story. And the deepest philosophical questions posed by euthanasia are only glancingly addressed, most often in Ramon's bitterly ironic remarks. The film fails to convey the claustrophobic terror experienced by a man who called his book &quot;Letters From Hell.&quot; 
 Sensitively portrayed by the great Spanish actor Javier Bardem, Ramon regards his life in the wake of a crippling accident in his mid-20s as a cruel, cosmic joke. In his imagination, he is still as he was before: a Zorba-like force of nature who once sailed the world. Now the only thing sustaining his spirit is his acute mind, which torments him with dreams of a physical life that is just a memory. 
 In the film's most remarkable sequence, Ramon, bedridden in his family's house in Galicia overlooking the sea, suddenly stirs, then lurches unsteadily to his feet. For a second, you wonder if his condition all these years has been an elaborate hoax, or if a miracle has occurred. As he steals out of the house and flies to the beach to join his beautiful lawyer Julia (Belen Rueda), the Puccini aria &quot;Nessun dorma,&quot; which he is playing on a phonograph, swells over the soundtrack, and they fall into a rapturous embrace. Then Ramon snaps to attention. It's only a fantasy that the filmmaker Alejandro Amenabar has milked for its last drop of heartbreaking impossibility. 
 Because Julia, who is helping Ramon prepare his latest court case challenging the laws against euthanasia, is also seriously ill, he believes that she will be especially sympathetic to his cause. When, later in the film, she falls downstairs and calls out for help to a man who obviously can't come to her rescue, the situation feels like an arm-twisting emotional ploy. 
 Amenabar, the gifted 32-year-old director of &quot;The Others&quot; and &quot;Open Your Eyes&quot; (later remade as &quot;Vanilla Sky&quot;), is clearly fixated on the shadowy area between life, death and the spirit world. This time he forsakes science fiction and ghost stories to put his spin on a famous case history.
 On Jan. 12, 1998, the 55-year-old Sampedro ended his life by drinking cyanide in an elaborately planned ritual that was videotaped and shown on Spanish television. His assisted suicide involved 10 collaborators, in addition to a cameraman. Each participant in the step-by-step process contributed to the ritual without having enough knowledge of the process to be legally indicted for murder. After his death, hundreds of supporters of his cause wrote letters, confessing to having aided and abetted him. 
 &quot;The Sea Inside&quot; presents a teasing paradox. Unambiguously pro-euthanasia on one hand, it shows how Ramon, bedridden and unable to move, infused many of those around him with a charged sense of life's possibility. Bardem, acting above the neck (except in brief flashbacks and fantasies), creates a complicated male character, volatile and witty, with a poet's soul. An excellent makeup job has given the 35-year-old actor the thinning, grayish hair and doughy pallor of a physically inactive man 20 years his senior. 
 We meet the members of Ramon's religious farming family, who slave to keep him alive but refuse to help him in his battle to die with dignity. Surrounding him are his father, Joaquin (Joan Dalmau); his angry brother, Jose (Celso Bugallo), who vehemently opposes any suicidal assistance; Ramon's attentive sister-in-law, Manuela (Mabel Rivera); and his young nephew, Javi (Tamar Novas), who regards his uncle as a father figure. Frequent visitors include Gene (Clara Seguara), a right-to-die activist, and her boyfriend, Marc (Francesc Garrido). 
 Two women enter his life. The first, Julia, embraces his cause, becomes his soul mate, and helps him produce a book of poems. The second, Rosa (Lola Duenas), is a beleaguered single mother with two children, who visits Ramon after seeing him on television and falls in love. When she tries to convince him that his life is worth living, he caustically suggests that she is really seeking some meaning to her own life. Anyone who really loves him, he insists, will help him die. Will she or won't she?
 In the end, suspenseful narrative devices that worked so effectively in a gothic fantasy like &quot;The Others&quot; feel contrived when applied to what's supposed to be a true story of life, death and the living hell from which Ramon finally escapes.

TITLE: Radio waves
PUBLISHER: Special to The St. Petersburg Times
TEXT: The Hermitage Theater will break with tradition Tuesday by hosting a concert by British-born jazz chanteuse Malia on its classical stage as part of the five-year anniversary celebrations of St. Petersburg jazz station Radio Hermitage.
 
Radio Hermitage and the State Hermitage Museum have been partners since the station's inception.
 Their relationship will be further cemented when Radio Hermitage moves into its new office inside the museum this summer. 
 &quot;We were hoping to have moved to the Hermitage in time for our anniversary,&quot; said Radio Hermitage programming director, Natasha Maslennikova. &quot;Unfortunately, the office remodeling is behind schedule.&quot;
 Currently the most commercially successful all-jazz station in Russia, Radio Hermitage has transformed itself into a brand with its own distinct style, programming and listenership. According to research from the ComCon rating company, the station attracts a daily audience of 151,000 listeners, with 62 percent of them in the high-income bracket. General sponsors include Megafon, MTS, SkyLink, and, of course, the Hermitage. 
 &quot;Radio Hermitage's image is that of a high-quality, expensive, and unusual product. We will never appeal to a mass audience. Nor do we want to.&quot;
 The station's director and founder, Tatyana Bazhanova, conceived of the idea of a Petersburg jazz station when she was traveling in Finland several years ago. Scanning through stations on her car stereo, she found Groove FM, a Finnish station with a similar format. When she returned to St. Petersburg, Bazhanova enlisted the help of Hermitage Museum director Mikhail Piotrovsky to help launch the jazz station and he is credited with thinking up the name of the station. 
 &quot;It's a great name - a real Petersburg name,&quot; said Maslennikova. &quot;It immediately associates the station with one of the city's greatest symbols.&quot;
 More music and nearly no talk is the secret of Radio Hermitage's success. 
 &quot;If we increased the amount of advertising we would lose a lot of our audience. We only have two commercial breaks an hour with three slots each - about three minutes of commercials. The rest of our advertising comes from sponsorship of various programs,&quot; said Maslennikova. &quot;We have a DJ only between 6 p.m. and 9 p.m. on weekdays.&quot; Radio Hermitage was originally conceived as an entirely DJ-free station, but they were soon overwhelmed by callers curious to find out the titles of their favorite tracks.
 Two years ago, presenter Alexei Zakharov, formerly of Radio Studio, was brought on board to announce the song titles and artists. Zakharov enjoys his job. &quot;I can honestly say that this is the first time in my radio career when I have actually listened to the station I work for,&quot; he said.
 Radio Hermitage initially struggled to find enough music to add to its playlist. 
 &quot;Five years ago, we would copy entire CD collections of friends and acquaintances. People would even call the station and offer up their jazz collections to add to our repertoire,&quot; said Maslennikova. &quot;Now we download new music weekly. We get albums before they are even available in stores.&quot;
 Maslennikova's ears are always open to new sounds. 
 &quot;If I go to a restaurant and hear good music, I always find out what it is and try to add it to our playlist. Now we are moving in a more modern direction. Earlier we played a lot of classics and instrumentals. Now I'm trying to play the latest jazz and acid jazz.&quot;
 The station doesn't play very many Russian artists due to poor quality of recordings. 
 &quot;Our musicians don't have the advantages that Western musicians have. They don't have access to good producers and studios,&quot; she said. &quot;We have some very talented musicians in St. Petersburg, but it would be impossible to play their recordings because of their poor production.&quot;
 However, some local groups do make the cut. &quot;We play the St. Petersburg Ska-Jazz Review, Lera Gehner Band, Andrei Kondakov,&quot; she said. &quot;Regardless, 98 percent of our repertoire comes from abroad.&quot;
 In a few months, Radio Hermitage will launch an English-language version of its broadcast on the internet. 
 &quot;This is a big step and a very expensive project,&quot; said Maslennikova. &quot;We are working very hard to make this a very high-quality Internet broadcast. When we are finished people will be able to listen to Radio Hermitage anywhere in the world.&quot; 
 The station also plans on expanding its broadcast coverage to Vyborg and Tallinn, Estonia, later this year.
 The anniversary celebration held Tuesday at the Hermitage Theater is by invitation only, but Malia's concert will be broadcast on Radio Hermitage 90.1 FM at 8:00 p.m. on Wednesday.

TITLE: Films of note
PUBLISHER: Special to The St. Petersburg Times
TEXT: Connoisseurs of French cinema have a special treat in store for them at the end of this month, when the &quot;Festival of Music in French Films&quot; opens at Dom Kino on Saturday.
 
During the festival, which runs through Wednesday, several recent French films will be shown, many of them for the first time in Russia.
 The idea behind the festival is to highlight the importance of the soundtrack as an integral part of film art, festival organizer Alexandra Leibovich said.
 &quot;Music plays an extremely important part in cinematography, in expressing or highlighting emotion, or in conveying a mood,&quot; Leibovich said.
 Films have been chosen because of the particularly important part music plays in each of them.
 &quot;We tried to select films where music is an integral part of the movie, not just an additional factor. Nearly all the films in this festival would be simply unthinkable without the crucial role which music plays,&quot; Leibovich said .
 The festival opens with &quot;Dogora, Ouvrons les Yeux,&quot; the latest film by celebrated French <i>auteur</i> Patrice Leconte. The film is notable for being the first non-feature film by the director. Shot in Cambodia, &quot;Dogora, Ouvrons les Yeux&quot; has no actors, no sets and no dialogue - only images and music. The music that inspired the film is the &quot;Dogora&quot; suite by composer Etienne Perruchon. Reputedly, Leconte liked the suite so much that he constantly listened to it on headphones while shooting the movie.
 The screening of &quot;Dogora, Ouvrons les Yeux&quot; will be preceded by a short concert, at which Perruchon will play excerpts from the suite on piano, accompanied by cello.
 An invited audience will be able to see the first showing in Russia of the most popular French film of 2004, &quot;Les Choristes,&quot; by director Christophe Barratier with original music by Barratier and Bruno Coulais, as well as use of music by Jean-Phillipe Rameau.
 &quot;It's difficult to overstate the impact of this film,&quot; Leibovich said. &quot;In France, you have a hit on your hands if your film attracts a million viewers. Nearly 9 million people went to see 'Les Choristes' in France, and this is all the more surprising since it doesn't have any violence or car chases in it - it's just a sweet film with wonderful music.&quot;
 Close secrecy shrouds the appearance of &quot;Les Choristes&quot; at the festival, so its name doesn't appear on the advance publicity, but the film will be shown to a private audience on Sunday.
 &quot;In fact, 'Les Choristes' was the inspiration for the whole festival,&quot; Leibovich said. &quot;When I saw the film last year, I knew that I had to show it in St. Petersburg, but I thought it would be a missed opportunity to show just one film. Since music is so important to 'Les Choristes' - I think that will be obvious when people watch it - the idea came up to show other French films with notable soundtracks.&quot;
 Other highlights of the festival are Alain Corneau's &quot;Tous les Matins du Monde,&quot; a classic from 1991 which features an atmospheric baroque soundtrack with original music by Jordi Savall, starring Gerard Depardieu and Jean-Pierre Marielle, while &quot;On Connait la Chanson&quot; (shown Sunday and Tuesday), is a charming musical, in which the conversations of the characters seamlessly drift into songs. &quot;On Connait la Chanson&quot; also features a script by writer and actor Jean-Pierre Bacri.
 &quot;I'm extremely pleased with our selection of films, and I think the public will be as well,&quot; Leibovich said, who nevertheless remains rueful about the films she was forced to leave out of the festival.
 &quot;There are so many interesting films coming out of France at the moment that I was spoiled for choice. There were three films in particular, which, because of contractual considerations, we aren't able to show right now. These films will just have to wait until the next festival.&quot;

TITLE: All that jazz
PUBLISHER: Staff Writer
TEXT: Who would think of staging a jazz dance competition in a land of sleeping beauties, swan princesses, lilac fairies and nutcrackers? What could inspire hot beats and flamboyant moves in a place like St. Petersburg, a city of cool straight lines, carefully preserved architectural landscapes and endless autumn?
 
The Fifth International Competition for Young Choreographers of Modern Dance, which kicked off Wednesday at the S'Tantsia Alternative Dance Venue, is providing some of the answers. 
 The contest is organized by Kannon Dance, St. Petersburg's first private studio focusing on modern dance, and jazz dance in particular.
 The competition is one of Kannon Dance's three major annual events, along with the Open Look Festival and the Kinodance Festival. Participants, aged from 14 to 26, are competing for prizes in three categories - &quot;modern dance,&quot; &quot;jazz dance&quot; and an all-round &quot;performance&quot; category.
 Kannon Dance was founded in 1997 by dancer and choreographer Natalya Kasparova and her husband Vadim, who is now the studio's director. The studio's first international project was a masterclass taught later that year by the American choreographer Phil LaDuca, who is seen as the studio's &quot;godfather.&quot; 
 Since then, the company's enthusiasm for modern dance has been accepted more willingly abroad than in Russia. 
 St. Petersburg, the cradle of Russia's classical ballet tradition and historical home of the Imperial Ballet, seems to eschew Kannon's western-oriented renegades: the city's culture bosses leave the company out in the cold.
 Natalya Kasparova's major complaint is the difficulty of attracting local professionals and students of choreography departments to the studio's festivals and competitions. There is typically an uninspired response to her invitations, she says, and the champion of modern dance finds it disheartening. 
 She says an old guard of professors perceive modern dance as amateur, hobby-style entertainment, not a professional occupation.
 &quot;The city's cultural and arts organizations tend to stew in their own juice, and the education system in this field is self-sustaining and blocked from new influences,&quot; Kasparova said. &quot;There isn't even much will for contacts. For instance, I know that modern dance is taught at the Vaganova Ballet Academy, but the details appear to be classified information: I have no idea as to who is teaching there, what the lessons are like, and they wouldn't let an outsider come there to watch a class.&quot;
 But Kasparova is hoping to change all that. The competition has been tailored to become a springboard for aspiring young talent.
 The jury features Russian and foreign choreographers of modern and jazz dance. 
 The biggest name in the group is the prominent American choreographer Bob Boross, who has taught classes in Europe and Mexico, as well as from coast to coast in the United States. His choreography has won critical acclaim across the U.S. Boross also heads the jazz and tap dancing courses at the Dance Department of the University of California, Irvine.
 Most recently, Boross has worked on the concert stage with his one-act jazz and theater piece &quot;Empty Sky (The Rising),&quot; set to ten songs from Bruce Springsteen's album &quot;The Rising.&quot; Some of his other recent pieces include &quot;The Music and the Mirror&quot; for the Third International Jazz Dance Forum in Paris, &quot;If There's a Hell Below We're All Gonna Go&quot; for Spectrum Dance in Los Angeles, &quot;Love Me or Leave Me&quot; for the Fountain Theater's Festival of Solos and Duets in Hollywood, and &quot;Cool,&quot; which was performed at the 2002 Gypsy Awards Show honoring late dance legend Gregory Hines in Los Angeles and at the Broadway Dance Center Performance Outlet in New York City. 
 For Boross, on his first visit to Russia, the festival is a chance to promote jazz dance in the country. The choreographer recently taught in Finland, France, and England, and in those countries he observed a knowledge of particular jazz dance techniques, but no internal sense of jazz dance as part of culture. 
 Boross said he doesn't have any concrete notions about how American jazz dance has been forming in Russia.
 &quot;I know that many American and European teachers have taught in Russia, so there will be a knowledge of certain techniques and styles,&quot; the choreographer told The St. Petersburg Times. &quot;In America, jazz was the basis of most 20th century musical forms. It is indigenous to the culture. In other countries, jazz was imported, so the knowledge is not the same. 
 &quot;Jazz dance in the 21st century, as in other forms like ballet and modern, is mixing with other influences, especially technology, to create new forms of dance of which jazz dance is just a component part. Perhaps jazz dance in Russia will reflect these influences.&quot;
 Boross is giving a series of public masterclasses on jazz dance during the festival. These lessons are open to professionals, amateurs and curious enthusiasts alike as they treat the essence of jazz dance as a universally understandable subject.
 This essence is a feeling within the body, a reaction to rhythm in music, Boross believes.
 &quot;Jazz is very emotional, as it is of the senses and personal,&quot; he said. &quot;On the other hand, the human body is an instrument and needs to be regularly trained in order to maintain its health and safety, and to be a conduit for the expression of these feelings.&quot; 
 This year, Kannon Dance is attempting to draw extra attention to the contest because the studio's home - the Culture Palace of the First Five-Year Plan - is scheduled to be demolished in June to free space for the construction of a second stage for the Mariinsky Theater next door. 
 &quot;As our future remains unclear and we haven't yet settled or decided on a particular new venue, it is crucially important for us to get the message as far and as high as we can manage,&quot; Kasparova said.
 Boross' masterclasses count among the event's major attractions. 
 The American choreographer verbalizes the principles of jazz dance with the same ease as if he were performing. 
 &quot;The performer's body should be free from tension and stiffness, and the dancer should have the knowledge of isolation in movement to be able to move individual parts of the body as needed, as well as to move the body as a whole,&quot; he said. &quot;There should be freedom within the body, so that different parts of the body can simultaneously move on their own - this is called 'polycentrism.'&quot;
 In the choreographer's opinion, a successful jazz dancer must have two strong qualities: the ability to feel and react, to be free to put one's emotions on display as part of the dance, and also the discipline to train the body in a variety of styles so that it will be ready to respond to any feeling that the dancer may wish to express.
 A good jazz dancer is trained well in ballet, modern and jazz techniques, and should also be skilled in tap dancing, Boross believes. The jazz dancer needs to have a heightened awareness of rhythm and syncopation. 
 &quot;Jazz is not square, but involves slurs and pushes of the beat of music,&quot; Boross explains. &quot;The dancer needs to be skilled in adapting body movement to the syncopation of the music.&quot;
 Kasparova and Boross agree that every person has the ability to learn and internalize jazz dance at some level of expertise. 
 &quot;Over the five years of our contest, I have seen people who first tried jazz dance as a hobby, demonstrating tremendous progress and wonderful results which a professional would envy,&quot; Kasparova recalls.
 Boross has a similar attitude. As he points out, the freedom of the body needed for jazz is reflective of a cultural tradition. Naturally, if a certain culture does not reflect those particular cultural traits, it may be more difficult for the dancer to assimilate the jazz feelings. But in such cases, it is more of a question of time. 
 &quot;It may take longer to do so,&quot; Boross says. &quot;But with the determination of the dancer to learn, jazz can be mastered at a point that reflects the openness and skills that the dancer brings to the class. Jazz is a natural feeling, something that all human beings carry with them.&quot;
 
 <i>
The Fifth International Competition For Young Choreographers of Modern Dance runs through Saturday at the S'Tantsia Alternative Dance Venue, 4th floor, Culture Palace of the First Five-Year Plan, 34 Dekabristov Ulitsa. Tel/Fax: 114 2027. www.kannondance.ru </i>

TITLE: Party Heads Talk After
 Berlusconi Resignation
PUBLISHER: The Associated Press
TEXT: ROME - Italy's president opened talks with party leaders Thursday, a day after Prime Minister Silvio Berlusconi resigned as premier following weeks of infighting within his conservative coalition and amid mounting criticism over the country's sluggish economy.
 
President Carlo Azeglio Ciampi has two options: dissolve parliament and call early elections or designate a premier to assemble a new government. He is widely expected to ask Berlusconi to form a new Cabinet to serve until the end of the legislature in mid 2006.
 If that is the course he takes, the new mandate for Berlusconi might come as early as Friday, Italian news reports speculated.
 Berlusconi stepped down Wednesday while vowing to quickly form a stronger, revamped Cabinet to restore confidence in his leadership. Resigning and then immediately shuffling the government is an old trick of Italy's complicated political system, and has been used by premiers to strengthen faltering coalitions.
 Berlusconi was leading Italy's longest-serving government since World War II and had resisted the move, sensing it would undermine his image as a new-style politician. On Wednesday, he suggested he would have preferred to stay.
 &quot;One can't always get what one wants,&quot; he said, acknowledging the end of his ambition of heading Italy's first postwar government to serve an entire five-year term.
 But the resignation, which he submitted to the president, is expected to enable Berlusconi to end weeks of fighting with his allies, who had demanded that he step down and revamp the Cabinet following an embarrassing defeat in April 3-4 regional elections.
 Berlusconi is staying on as caretaker, and the Apcom news agency quoted him as saying that he expects the crisis to be over by the end of the week. He reportedly said he will not change many ministers, but did not give details.
 The resignation was welcomed by his allies, who had demanded it after the electoral defeat.
 &quot;His speech was excellent,&quot; said Gianfranco Fini, who serves as deputy premier and foreign minister.
 Berlusconi's popularity has been sagging, faced with criticism over his support for the U.S.-led war in Iraq and the lackluster economy.


TITLE: 50 Bodies Found in River Tigris
PUBLISHER: The Associated Press
TEXT: BAGHDAD, Iraq- For days, Iraq was shaken by claims that Sunni Muslim militants had abducted as many as 100 Shiites from an area at the tip of Iraq's &quot;Triangle of Death.&quot;
 
On Wednesday Iraq's interim president said he had proof of the abductions: 50 bodies recovered from the Tigris River. And northwest of Baghdad, witnesses said 19 bullet-riddled bodies were found slumped against a bloodstained wall in a soccer stadium in Haditha.
 On Wednesday, interim President Jalal Talabani did not say when or where the 50 bodies were pulled from the river, but he said all had been identified as hostages.
 &quot;Terrorists committed crimes there. It is not true to say there were no hostages. There were. They were killed, and they threw the bodies into the Tigris,&quot; Talabani told reporters. 
 Madain is at the tip of a Sunni militant stronghold known as the &quot;Triangle of Death,&quot; where there have been numerous retaliatory kidnappings. Police and health officials said victims are sometimes killed and dumped in the river.

TITLE: IN BRIEF
TEXT: The Sun Insults Pope
 </b>

BERLIN (Reuters) - Germany's top-selling daily Bild blasted its British counterparts on Thursday for what it saw as their disrespectful coverage of the new Pope and their focus on his brief membership of the Hitler Youth.
 "'Hitler Youth' - English insult German Pope!" the paper titled its front page before listing headlines from British newspapers a day earlier announcing the election of conservative German Cardinal Joseph Ratzinger as Pope Benedict XVI. 
 The Sun newspaper, Bild's nearest British equivalent, headlined its front page on Wednesday: "From Hitler Youth to Papa Ratzi," while even the sober Daily Telegraph carried the title "'God's Rottweiler' is the new Pope."
 Bild, which itself reported the election of the first German Pope in centuries with the triumphant headline "We are the Pope!" was shocked by the tone of the British coverage.
 
 
<b>Nazi Flag Flap
 </b>

SYDNEY (AFP) - Residents of a small Australian town are up in arms over a family who decided to fly a Nazi flag in their backyard because the colorful banner amused their four-month-old daughter, local media reported.
 Darren Mackay and Jenni Duncombe, from Mannering Park in New South Wales state, say they bought the swastika-bearing flag at a local market "as a bit of fun" and did not realize its significance until neighbors began complaining, Sydney's Daily Telegraph reported.
 The couple now refuse to haul the flag down, with Duncombe quoted as saying her four-month-old daughter Breeana liked to watch it blowing in the breeze.
 Residents have contacted the local council, a federal MP and the state and national police, but authorities may be powerless to remove the Nazi symbol.
 Australians fought against Germany in World War I and II and on Monday will observe their annual veterans' day, known as ANZAC Day. 
 
 
<b>Mexico Politician Freed
 </b>

MEXICO CITY (Reuters) - A legal case shaking Mexico's political stability took a bizarre turn on Wednesday when the country's most popular politician was threatened with jail and then rescued by rivals with a mere $180 bail payment.
 The attorney general's office asked a judge for the arrest of Mexico City's leftist mayor and presidential front-runner, Andres Manuel Lopez Obrador, for contempt of court in a land dispute that could throw the 2006 election into chaos.
 The mayor briefly appeared headed for jail in coming days pending trial, but two deputies of President Vicente Fox's party, saying they feared unrest, made an advance bail payment of 2,000 pesos ($180).
 Prosecutors said the payment meant the mayor would have to appear in court but not be put behind bars.
 The mayor, whose popularity has soared as he portrays himself as a victim of a government-inspired legal plot, was furious at being denied incarceration.
 
 
<b>Blair Leads Campaign
 </b>

LONDON (Reuters) - Britain's election campaign reached the half-way mark on Wednesday with all the evidence suggesting Prime Minister Tony Blair is well ahead and extending his lead.
 Polls show that after two weeks of campaigning, Blair's Conservative opponents have not made anything like the popular breakthrough they need to deprive him of a third term in power.
 Neither do Britain's third party, the Liberal Democrats, seem to have benefited significantly from their opposition to the Iraq war.
 Blair stood by his decision to support the 2003 U.S.-led invasion of Iraq during a 30-minute interview with BBC television broadcast on Wednesday.
 "If you want me to apologize for the war in Iraq, I am afraid I cannot say that I am sorry we removed Saddam Hussein," Blair said. 
 "It was a hard decision. I took the decision I thought was right." 
 Polls show Britons view Blair himself with little enthusiasm but prefer his center-left Labour party to its opponents.

TITLE: German Cardinal Becomes Pope Benedict XVI
PUBLISHER: The Associated Press
TEXT: VATICAN CITY - Cardinal Joseph Ratzinger of Germany, the Roman Catholic Church's leading hardliner, was elected the new pope on Tuesday evening in the first conclave of the new millennium by cardinals intent on sticking to conservative policy. 
 
He chose the name Pope Benedict XVI and called himself &quot;a simple, humble worker.&quot; 
 Ratzinger emerged onto the balcony of St. Peter's Basilica, where he waved to a wildly cheering crowd of tens of thousands and gave his first blessing as pope. Other cardinals clad in their crimson robes came out on other balconies to watch him. 
 Pilgrims chanted &quot;Benedict! Benedict!&quot; as the church's 265th pontiff appeared after one of the fastest papal conclaves of the past century. 
 &quot;Dear brothers and sisters, after the great Pope John Paul II, the cardinals have elected me - a simple, humble worker in the vineyard of the Lord,&quot; he said after being introduced by Chilean Cardinal Jorge Arturo Medina Estivez. 
 &quot;The fact that the Lord can work and act even with insufficient means consoles me, and above all I entrust myself to your prayers,&quot; he said in a brief speech. &quot;I entrust myself to your prayers.&quot;
 Ratzinger, the first German pope in centuries, served John Paul II since 1981 as head of the Congregation for the Doctrine of the Faith. In that position, he disciplined church dissidents and upheld church policy against attempts by liberals for reforms. He turned 78 on Saturday.
 Ratzinger is the first Germanic pope in roughly 1,000 years. There were at least three German popes in the 11th century. 
 Benedict, which comes from the Latin for &quot;blessing,&quot; is one of a number of papal names of holy origin that include Clement (&quot;mercy&quot;), Innocent (&quot;hopeful&quot; as well as &quot;innocent&quot;) and Pius (&quot;pious&quot;). 
 The last Benedict, Benedict XV, served during World War I and was credited with settling animosity between traditionalists and modernists, and dreamed of reunion with Orthodox Christians. 
 The new pope had gone into the conclave with the most buzz among two dozen leading candidates. He had impressed many faithful with his stirring homily at the funeral of John Paul II, who died April 2 at age 84. 
 White smoke poured from the Sistine Chapel and bells tolled earlier to announce the conclave had produced a pope. Flag-waving pilgrims in St. Peter's Square chanted: &quot;Viva il Papa!&quot; or &quot;Long live the pope!&quot; 
 The bells rang after a confusing smoke signal that Vatican Radio initially suggested was black but then declared was too difficult to call. White smoke is used to announce a pope's election to the world. 
 It was one of the fastest elections in the past century: Pope Pius XII was elected in 1939 in three ballots on one day, while Pope John Paul II was elected in 1978 in four ballots in one day. The new pope was elected after either four or five ballots over two days. 
 &quot;It's only been 24 hours - surprising how fast he was elected,&quot; Vatican Radio said. 
 Niels Hendrich, a 40-year-old salesman from Hamburg, Germany, jumped up and down with joy and called his father on a cellphone when the bells started to ring. &quot;Habemus papam!&quot; he shouted into the phone, using the Latin for &quot;We have a pope.&quot; 
 In Traunstein, the German town where the pope studied for the priesthood, a room full of 13-year-old boys at St. Michael's seminary jumped up and down, cheered and clapped as the news was announced. 
 &quot;It's fantastic that it's Cardinal Ratzinger. I met him when he was here before and I found him really nice,&quot; said Lorenz Gradl, 16, who was confirmed by Ratzinger in 2003. 
 Cardinals had faced a choice over whether to seek an older, skilled administrator who could serve as a &quot;transitional&quot;(a) pope while the church absorbs John Paul's legacy, or a younger dynamic pastor and communicator - perhaps from Latin America or elsewhere in the developing world where the church is growing. 
 While John Paul, a Pole, was elected to challenge the communist system in place in Eastern Europe in 1978, the new pontiff faces new issues: the need for dialogue with Islam, the divisions between the wealthy north and the poor south as well as problems within his own church. 
 These include the priest sex-abuse scandals that have cost the church millions in settlements in the United States and elsewhere, coping with a chronic shortage of priests and nuns in the West, and halting the stream of people leaving a church indifferent to teachings they no longer find relevant. 
 Even though John Paul appointed all but two of the men who elected the new pope, it was no guarantee that the new man would necessarily be in his mold. Pope John XXIII was 77 when he was elected pope in 1958 and viewed as a transitional figure, but he called the Second Vatican Council that revolutionized the church from within and opened up its dialogue with non-Catholics.

TITLE: New Pope Gives First Sermon in the Vatican
PUBLISHER: The Associated Press
TEXT: VATICAN CITY - With nods to the groundbreaking papacy of John Paul II and a pledge to keep reaching out to other religions, newly elected Pope Benedict XVI gave the first signs of where he wants to take the Roman Catholic church.
 
In German-born pontiff's first Mass at the Vatican as pope Wednesday, the world's 1.1 billion Catholics got their first hints of where the papacy is headed and followers of other religions weighed the future of interfaith relations. By and large, reactions were hopeful and expectant-an indication of the new standards in reaching out that John Paul set during his 26-year papacy.
 But the new pope has been one of the most forceful Vatican voices for Catholic missionary work and other forms of evangelization. He was the intellectual force behind the 2000 document &quot;Dominus Iesus,&quot; which outlined the Catholic Church as an exclusive road to salvation and angered Protestants, Jews, Muslims and other non-Christians.
 In Israel, admiration for John Paul's tireless efforts to promote Jewish-Catholic reconciliation mixed with unease about Benedict's time in the Hitler Youth as a teenager.
 Benedict has written openly about his service, which was compulsory under the Nazi regime. He also was drafted into a German anti-aircraft unit during World War II, though he says he never fired a shot.
 Benedict inherits sometimes testy relations with the Russian Orthodox Church, which has accused Catholics of poaching Orthodox believers. John Paul, the first Slavic pope, saw a visit to Russia as a way to promote greater Christian unity a millennium after the east-west schism, but he was never able to arrange the trip.
 Benedict's election was welcomed across the Islamic world, where many people hope he will promote harmony between the two religions and possibly Middle East peace.
 The new pope won praise from Muslims by criticizing Italian Prime Minister Silvio Berlusconi for comments in 2001 that Western civilization is superior to Islam. &quot;One cannot speak of the superiority of one culture over another, because history has shown that a society can change from one age to another,&quot; he said at the time.


TITLE: Ecumenicalism, Women Priests, Sex Abuse
PUBLISHER: The Associated Press
TEXT: Statements made by the new Pope, Benedict XVI.
 </i><strong>
On the Orthodox Church</strong>: &quot;They lack full communion with the Catholic church since they do not accept the Catholic doctrine of the primacy which, according to the will of God, the bishop of Rome objectively has and exercises over the entire church.&quot; -&quot; Dominus Iesus.&quot;
 <strong>On the Protestant Church</strong>: They are &quot;not churches in the proper sense.... Though we believe they suffer from defects, (they) have by no means been deprived of significance and importance in the mystery of salvation.&quot; - &quot; Dominus Iesus.&quot;
 <strong>On Islam following the Sept. 11 attacks</strong>: &quot;The truth of the Christian faith appears to us in all its depth, but we mustn't forget that, sadly, it has been darkened many times by the concrete behavior of those who called themselves Christians. Islam has also had moments of great splendor and decadence in the course of its history.&quot; - Comments in 2002, reported by www.zenit.org.
 <strong>On Judaism</strong>: &quot;That the Jews are connected with God in a special way and that God does not allow that bond to fail is entirely obvious. We wait for the instant in which Israel will say yes to Christ, but we know that it has a special mission in history now.&quot; - from Ratzinger's book, &quot;God and the World,&quot; published October 2000, as reported by National Catholic Reporter.
 <strong>On the ordination of women</strong>: <br> &quot;The fact that the church is convinced of not having the right to confer priestly ordination on women is now considered by some as irreconcilable with the European Constitution.&quot; - from www.zenit.org, April 11, 2005.
 <strong>On sex abuse scandals</strong>: &quot;In the United States, there is constant news on this topic, but less than 1 percent of priests are guilty of acts of this type. The constant presence of these news items does not correspond to the objectivity of the information nor to the statistical objectivity <br> of the facts.&quot; - from &quot;Cardinal Ratzinger Sees a Media Campaign Against Church,&quot; www.zenit.org, Dec. 3, 2002.
 <strong>On homosexuals</strong>: &quot;Although the particular inclination of the homosexual person is not a sin, it is a more or less strong tendency ordered to an intrinsic moral evil, and thus the inclination itself must be seen as an objective disorder.&quot; - from Ratzinger's &quot;Letter to the Bishops of the Catholic Church on the Pastoral Care of Homosexual Persons,&quot; 1986, as reported by National Catholic Reporter.

TITLE: James Denied Playoffs As New Jersey Grabs Last Spot
PUBLISHER: The Associated Press
TEXT: TORONTO, Canada - LeBron James did all he could to make the playoffs. It wasn't enough. 
 
On a night when the Cleveland Cavaliers needed some help to reach the postseason, James had 27 points, 14 assists and 14 rebounds to lead the Cavaliers to a 104-95 victory over the Toronto Raptors on Wednesday night. 
 Moments after Cleveland won, New Jersey completed a 102-93 victory over Boston that gave the Nets the eighth and final playoff spot in the Eastern Conference. Cleveland and New Jersey finished with the same record, 42-40, but the Cavaliers didn't have the tiebreaker because the Nets won the season series. 
 &quot;We did our part tonight, but we didn't do our part at other times and it came back and got us,&quot; James said. 
 Cleveland went 4-7 down the stretch, spoiling a breakthrough season for James after he earned Rookie of the Year honors in 2003-04. 
 &quot;This is not the end of the world. I got a family at home to take care of that brings a smile to my face every day,&quot; James said. 
 Interim Cleveland coach Brendan Malone said James will remember the sting of not making it. He said James was especially upset last week after a tough loss to the New York Knicks. 
 &quot;After the New York game, he really broke down and I think the pain of not getting into the playoffs is going to spur him on,&quot; Malone said. &quot;He's going to emerge as a leader of this team, and the front office and new ownership have to surround him with players that can make shots from the outside to make his job much easier because right now he's playing against five people all the time because they don't respect the outside shooters on our team.&quot;
 Last time in Toronto, James' 56-point effort was wasted. Point guard Jeff McInnis didn't play in that game, a benching that helped lead to coach Paul Silas being fired by new owner Dan Gilbert. 
 McInnis did not accompany the team to Toronto this time. 
 James suggested the team is in turmoil. &quot;There were some missed opportunities on the court and some distractions off the court. It always catches up with you when you are not doing things right,&quot; James said. 
 On Tuesday, McInnis started against Boston but didn't score in six minutes before being replaced by Eric Snow. 
 The Cavs said he had a &quot;viral syndrome,&quot; but didn't give any other specifics. McInnis said his stomach hurt while declining interviews after Cleveland's 100-86 win over the Celtics. 


TITLE: SPORTS WATCH
TEXT: Safin's Losing Streak
 </b>

BARCELONA, Spain (AP) - Top-seeded Marat Safin of Russia was upset by Jose Acasuso of Argentina 6-4 6-4 in the second round of the Open Seat Godo on Wednesday. 
 Earlier in the day, defending champion Tommy Robredo lost to countryman Alberto Martin 6-1 6-4 in the $1.2 million clay-court tournament. 
 The sixth-seeded Robredo lost in the fourth round at the Pacific Life Open, and then pulled out in the third round at the Nasdaq-100 Open. 
 
 
<b>Johansson To Stay On
 </b>

TALLINN (Reuters) - Lennart Johansson is expected to remain as UEFA president at least until 2007 after new voting procedures were adopted at the UEFA Congress on Thursday. 
 UEFA has fallen into line with FIFA and the Asian, South American and African federations by agreeing to hold its presidential election in odd-numbered years to avoid clashing with the World Cup, continental championships and the Olympics. 
 Johansson, who will be 77 by the time of the proposed 2007 election date, was elected to the post in 1990. He has said he would not be seeking re-election in 2006, when his fourth term was originally due to end.
 The Swede unsuccessfully stood against Sepp Blatter in the FIFA presidential election of 1998. 
 
 
<b>Armstrong Looks Ahead
 </b>

TORONTO, Canada (Reuters) - Austria's Peter Wrolich won the second stage of the Tour de Georgia Wednesday, but a third-place finish by American Lance Armstrong put the six-time Tour de France winner in contention for the overall title. 
 Armstrong is competing in the event just two days after announcing he would retire from competitive cycling following this year's Tour De France. 
 The American won the second stage of this event last year, and his strong showing Wednesday left him in a good position to make his move either during Thursday's 18.6-mile time trial or in the weekend stages that go through the Georgia mountains. 
 
 
<b>New Deal Eludes NHL
 </b>

NEW YORK (AP) - The NHL is searching for a deal, not replacements for its locked-out players. 
 With speculation mounting that hockey would return next season no matter what, even if that meant using replacement players, commissioner Gary Bettman said Wednesday that the league won't return to the ice in October if a new collective bargaining agreement hasn't been reached with the players' association. 
 
 
<b>New Home Players Rule
 </b>

TALLINN (Reuters) - Clubs taking part in European club competitions must include eight home-grown players in their 25-man squads by the start of the 2008-09 season following a landmark decision taken at UEFA's annual congress on Thursday. 
 The new rule will come into force at the start of the 2006-07 season with four home-grown players in the squads for Champions League and UEFA Cup matches, rising to six in 2007-08 and eight the season after. 
 The ruling does not apply to domestic competitions, although UEFA is encouraging its members to adopt the rule.