SOURCE: The St. Petersburg Times
DATE: Issue #1081 (47), Friday, June 24, 2005
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TITLE: Police to Step Up Patrols to Protect Foreigners
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: In response to alarm expressed by the St. Petersburg tourism industry at a crime wave against foreign tourists, city police have announced they are taking steps to counter the pickpocket gangs.
Staff from 15 private security agencies have been recruited to join forces with the city police to prevent crimes against foreigners in the high season, the police said in a letter to the city branch of the Russian Tourism Industry Union, or RST. 
Three police teams will patrol metro trains and the platforms of the city’s three busiest stations — Ploshchad Vosstaniya, Nevsky Prospekt and Technologichesky Institute — where thieves have been extremely active, the letter said. 
Patrol routes will be revised in order to get more officers into more high-risk areas. Volunteer security brigades will also be used for street patrols, the letter said.
Police said four police cars and 40 policemen working in two shifts patrol Nevsky Prospekt, where up to 10 pickpockets are detained daily.
The police this month were harshly criticized and their efforts branded disproportionate to the scale of criminality at a meeting of the RST. 
Tourism industry professionals feel crime prevention is weak and the police are trying to put their responsibilities to protect tourists onto tour operators.
Sergei Korneyev, head of the Northwestern branch of RST, said the union has asked the police to resume joint patrolling of dangerous areas, as was done in 2003, when the city celebrated its 300th anniversary.
“Then they recruited staff from criminal police and other departments, and the result was immediate: crime levels plummeted,” Korneyev said. “Now, it is the time to do the same before the wave grows further.”
RST also called for the creation of a tourist police, like those that exist in many foreign cities, including Prague.
“We need it not because the criminal situation is horrible — it is better than in tourist Meccas like Paris or New York — but because we need to show that we care,” Korneyev said. “When people arrive somewhere and learn there is a tourist police there, they feel better about the place from the start.”
In addition, tourist police would be useful in promoting the city abroad.
Albert Helms, general manager of the Renaissance St. Petersburg Baltic Hotel, suggested introducing 24-hour surveillance in the Nevsky Prospekt area and the central metro stations as is done in London. He also recommended using the experience of the U.S. police of patrolling on mountain bikes. 
“A hotline in English, German, French and Italian is essential,” Helms said. “A top priority is to create a central tourist police office where crimes can be registered at all times.”
When tour operators ask the police for extra staff, especially multilingual officers, the usual response is lack of funding.
If a crime is committed against a tourist, it has to be registered at a local police station. To make an insurance claim, travelers require a certificate confirming a theft. Most staff at ordinary police stations don’t speak foreign languages, which makes it impossible or painstakingly long to register the crime, while the tourist information center at 14 Sadovaya Ulitsa operates only during business hours.
“We are really doing what we can but we are understaffed and have limited resources,” said Andrei Stanchenko, head of the city police’s special task force investigating crimes involving foreigners. 
According to official statistics, the 500 to 600 crimes registered against foreigners every year all get solved, but this is misleading because many crimes are not recorded by the police.
At a recent meeting on incoming tourism issues organized by the city branch of the RST, several heads of travel agencies reported that more than four dozen of their clients had been unable to register thefts.
Helms said his hotel warns the guests about high-risk areas for robbery and pickpocketing. But foreign tourists remain an easy target. Many of them are elderly and they sometimes find it more difficult to concentrate and be alert, especially in noisy places like Nevsky Prospekt or in the metro.
Considering the importance of the industry for St. Petersburg, the RST advised the city government to appeal directly to the federal Interior Ministry to provide funding for more staff to create a centralized service to register crimes against tourists.
St. Petersburg receives the highest numbers of tourists in all of Russia. Last year, the city received 3 million visitors.
Florian Seitz, spokesman for the German Consulate General in St. Petersburg, said the number of robberies is rising again. The consulate gets five to 10 calls a day from German tourists who are robbed. 
“The worst cases are when their passports are taken, because the visa is in the passport,” Seitz said. “Obtaining an exit visa is not only time consuming but is also very expensive.”
An exit visa can be obtained directly at Pulkovo International Airport for about $150 to be received on the same day or the next day. To get an exit visa, foreign tourists may turn to the Visa Registration Center, or OVIR, but when only one or two days are left, this is not an option.
The scenarios described by German tourists show that the behavior of the gangs of thieves is the same in many cases. Typically, the tourists are crushed in the metro or on other public transportation or on a busy street, and their wallets are promptly removed. The robbery often happens a moment before doors close, so that the victims are separated from the thieves and can’t follow them.
Seitz urged tourists to be extremely careful. “The thieves are getting slicker and slicker,” he said.

The City Tourist Information Center at 14, Sadovaya Ulitsa — Tel. 310 82-62 and 310-28-22 — provides English-language help to crime victims.
Open from 10 a.m. to 6 p.m. Closed on Saturdays and Sundays.

TITLE: Gref Says Economic Goals Set Too High
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: MOSCOW — Economic growth is slowing and gross domestic product will not double by 2010, regardless of the target set by President Vladimir Putin, Economic Development and Trade Minister German Gref said at Thursday’s Cabinet meeting.
A visibly agitated Gref told Prime Minister Mikhail Fradkov that the goal of doubling gross domestic product by 2010 was “unrealistic.” The remark was made during a harsh exchange between Fradkov and Gref, after Gref’s ministry presented figures showing that growth had slowed to 5.4 percent from January to May, down from 7.5 percent over the same period last year. 
“Do whatever is necessary … so that the mid-term program that envisions doubling the GDP is achieved,” said Fradkov, who has repeatedly complained that ministers are not doing enough to fulfill the target. 
“Search, search for sources of economic growth, let’s create the resources — meat, car building, create jobs, clarify the tax policy, the policy for small and medium businesses,” Fradkov said, RIA-Novosti reported.
“German Oskarovich, we have no alternative,” Fradkov told Gref. 
But Gref said calls for quick fixes to meet the GDP target, including state intervention to diversify the economy, have missed the point. 
“The most correct way is to reform the entire system, to improve the investment climate,” Gref told reporters after the meeting, Interfax reported.
Although Gref’s declaration that doubling GDP by 2010 was out of reach came as little surprise to analysts, they welcomed his sober analysis of the problems facing the economy.
Gref’s ministry on Thursday had little cheer to offer Fradkov, instead listing a series of problems needing to be dealt with if the economy is to match the growth figures of recent years.
The ministry’s figures showing January to to May GDP growth slowing to 5.5 percent were in line with a forecast by the International Monetary Fund, which expects GDP growth to fall from last year’s 7.1 percent to 5.5 percent this year. 	According to the ministry’s provisional data for the first five months of the year, year-on-year growth in most key sectors has been steadily slowing. Year-on-year industrial growth for May was just 1.4 percent, while slower growth rates were also recorded in oil output and investments. At the same time, imports are growing, creating extra pressure on domestic producers, the ministry said.
“The only main component of GDP that still shows high growth this year is household consumption,” the ministry said. “High oil prices no longer positively affect growth rates. Excess petrodollars are removed by the stabilization fund to help improve the country’s financial situation, but are not used to develop the economy.”
And while household incomes are growing by around 10 percent per year — fueling demand — the supply side of the equation is lagging behind. For the first time in recent years, inflation is rising due to non-monetary pressures, the ministry said.
Prices rising as a result of growing consumption have already led the government to adjust its inflation forecast for 2005 upward to 10 percent, 1 1/2 percentage points off its original target of 8.5 percent.
Although high demand can typically encourage producers to boost production, in Russia the classic formula may not work, Gref’s ministry and analysts warned Thursday, citing a fear of political instability and a lack of trust from the business community in the authorities and their intentions.
“Low investment activity is mostly connected to the general problem of a lack of trust between business and the authorities,” the ministry said in its report.
And without investment, analysts said, catching up with growing demand is an uphill struggle.
Yevgeny Gavrilenkov, chief economist at Troika Dialog investment bank, said that growing incomes tend to encourage consumers not just to purchase more goods, but also to opt for better-quality products. Unfortunately, he said, these are ones that the vast majority of Russian producers cannot supply.
“They could theoretically start producing better goods, but that requires investment,” Gavrilenkov said. “But to make a decision to invest, producers need political stability.”
“It’s like in Britain: Everyone knows that the system is there to stay for 100 or 200 years,” he said.
Gavrilenkov pointed out that in 2003, the macroeconomic conditions very much resembled those observed now. 
“But then production was growing at over 7 percent per year, fueled by investment,” Gavrilenkov said. That investment was fueled by a much stronger belief that the country had a stable, predictable future, he said.
“It’s all about stability, stability and stability again,” Gavrilenkov said.
Consumers’ desire to spend money on better-quality goods was clearly shown by the Economic Development and Trade Ministry’s figures on the car market, where sales of imported cars are rising quickly, in stark contrast to trends in domestic car manufacture.
A total of 205,300 foreign cars, worth a total of $2.04 billion, were imported in January-April, compared with 124,200, worth $1.29 billion, over the same period last year, the ministry said, citing Federal Customs Service figures. 
Meanwhile, Russian car production, despite protectionist measures like hikes in import duties, fell by 5.7 percent from January to May, with the largest drop of 6.6 percent in May.

TITLE: World-Class Skater Thinks Big in Dining
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: One would expect a top-flight sportsman to think big. Anton Sikharulidze, 2002 Olympic champion, two times world champion and three times European champion in figure skating, certainly does.
“When I do something, I either do it on a grand scale or don’t bother at all,” Sikharulidze said Wednesday of his spacious new restaurant Sphinx. 
Sikharulidze and his skating partner Yelena Berezhnaya were at the center of an international scandal during the Winter Olympics in Salt Lake City in 2002. 
The Russians defeated Canadians Jamie Sale and David Pelletier by a slim margin. But after French judge Marie-Reine Le Gougne said that she had been pressured to put the Russians first, the Canadians were later given duplicate gold medals. 
Sikharulidze’s restaurant is big. Decorated with Egyptian motifs, it can seat about 300 people. Opened last month in the Oktyabrskaya Hotel on Ploshchad Vosstaniya, Sphinx covers a total of 1,400 square meters, including kitchens.
“Yes, a cozy little place would probably be cute,” he smiles. “But it wouldn’t be me.”
Seeing such a large space deserted would be disheartening, but the sociable owner is there almost every night to attract the crowds and ensure it is booming.
“It has become my addiction to be here,” he said. “Every morning I tell myself I must have a rest from it but at the end of the day I always come over.”
A born public figure who thrives on popularity, Sikharulidze never refuses to be photographed with diners and chats happily with visitors in keeping with the Eastern tradition of hospitality. 
A sports bar would be too narrow a niche, and a nightclub too risky a venture, Sikharulidze decided.
He is aiming to make the restaurant he partly owns a relaxed, informal place that will become one of the city’s most popular spots and maybe even develop into a chain. 
Berezhnaya, with whom he still performs in the U.S. and Canada in Stars On Ice shows for professional skaters, hasn’t invested in the business yet.
Sikharulidze is one of several St. Petersburg sportsmen to put their money into dining outlets. Another eatery owner is Zenit football team striker Alexander Kerzhakov, who owns the Lukomorye cafe.
Berezhnaya has already tried her hand in the dining business too. Several years ago, she opened a small cafÎ, Axel, in her hometown Nevinnomyssk and employed several relatives who run it.
“She has been here often and inspired a lot of what has been done, and she eventually may well join as a business partner, if it proves successful,” Sikharulidze said.
Sphinx serves up hearty portions. With all main courses at least half a kilogram, the restaurant caters to clients with voracious appetites. 
“A good appetite is a major advantage” is the restaurant’s motto.
The menu — dominated by red meat and poultry to match “a meat-eating pattern fit for the Russian climate” — has a mild oriental bent, boasting a choice of kebabs and shashlyks. There are also Italian, German and Greek dishes. Sikharulidze would not disclose who the restaurant’s chef is, but said he was lured from a five-star hotel in St. Petersburg.
Not much of a cook himself, Sikharulidze said he often sustained himself on a bottle of yogurt and some fruit until dinnertime.
He has substantial dining experience from his international travel. 
Although born in St. Petersburg, the champion has rich memories of his childhood when his Georgian father made the Georgian dishes satsivi and shashlyk prepared from handpicked market ingredients. 
The deliciously sounding satsivi isn’t featured in the menu. “I wouldn’t trust anybody else to cook it, otherwise I would have to make my dad a chef,” he said.
The sportsman said he created what he felt has been a missing link in the local culinary scene: a democratic, cheerful place offering generous portions at affordable prices. A typical bill in Sphinx comes to slightly over 200 rubles per person. 
“We would like to bring in the international dining experience, when a whole family can have a dinner together without dreading to see the bill and then having to financially recover from that meal for two months,” Sikharulidze said.

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PUBLISHER: The Moscow Times
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AUTHOR: Hello from NS
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TITLE: Hope for Church Cooperation
PUBLISHER: The Associated Press
TEXT: MOSCOW — The head of a group that promotes Christian unity expressed hope Thursday for reconciliation between the Russian Orthodox and Roman Catholic churches, saying both are open to closer cooperation. 
The Rev. Samuel Kobia, general secretary of the Geneva-based World Council of Churches, spoke after meetings in the past two weeks with both Russian Orthodox Patriarch Alexy II and Pope Benedict XVI. 
“We are pleased to see that there is a dialogue going on and that both sides are open for dialogue,” Kobia told a news conference. “That’s what makes us optimistic that a resolution will be found.” 
Overcoming tense relations with the Russian Orthodox Church is among the most formidable tasks facing Benedict in his pledge to make heal the nearly 1,000-year-old rift with Orthodox Christianity a primary goal of his papacy. 
Kobia, a Methodist pastor from Kenya, met with Alexy on Wednesday during a four-day visit to Moscow. 
“I have heard from the two most prominent spiritual leaders in the world today that they are fully committed to the ecumenical movement and to the cooperation between the Orthodox, the Protestant churches that come from the reformation tradition, the Anglican Church and together also with the Roman Catholic Church so that we can work together toward unity of the Christian church,” he said.

TITLE: IN BRIEF
TEXT: New Park Established
n ST. PETERSBURG (SPT) — A Park for the Heroism of the Russian and Belarussian people was established in the Nevsky District on Wednesday, the Day of Remembrance and Sorrow, the anniversary of Hitler’s attack on the Soviet Union on July 22, 1941, Interfax reported.
The park will be located near the intersection of Dalnevostochny Prospekt and Ulitsa Telmana, where veterans and representatives of City Hall have put a memory capsule and installed a stone.

Bodies Recovered
ST. PETERSBURG (SPT) — The Emergency Ministry has recovered the bodies of all five navy students who drowned on June 8 in the Gulf of Finland, Interfax reported Tuesday.
The last body was found on Tuesday on the shore of the Petrodvortsovy district, the report said.
The deaths have been blamed on the drunkenness of two officers who took the students in a dinghy to the open sea without permission.
The same day emergency workers found the bodies of all eight fishermen who drowned in the gulf in May.

Dutch Painting Stolen 
ST. PETERSBURG (SPT) — A portrait of the Holy Roman Emperor Frederick V by Dutch artist Gerard van Honthorst was stolen from a museum workshop at the Art Industrial Mukhina Academy in St. Petersburg, RIA-Novosti reported on Tuesday.
“This is a studying department so there were no people from outside. The theft took place on Tuesday at about 2 or 3 p.m.,” Interfax cited an anonymous museum employee as saying.
The details of the theft are not being made public in the interest of the investigation, the employee said.

LAES Reactor to Stop
ST. PETERSBURG (SPT) — On July 12, the Leningrad Nuclear Power Plant (LAES) will stop reactor No. 2 for a renovation aimed at prolonging terms of its functioning, Interfax reported on Wednesday, quoting LAES press-service.
“On July 12, after the 30-year working life of thereactor is finished, the second bloc will be stopped for a planned capital renovation to implement works to modernize it in accordance with a [development] program running until 2007,” Interfax cited the press-service as saying.
On Saturday, LAES will launch reactor No. 3, which has been under renovation since February 12. Reactor No. 4 is planned to be stopped for 45 days from Aug. 6 for a scheduled renovation, the press service said.

TITLE: Plans Advance For Reburial of  Tsarina
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The remains of Maria Fyodorovna, mother of Russia’s last tsar, Nicholas II, will arrive in St. Petersburg from Denmark on a military Danish ship to be reburied in the Romanov crypt of SS. Peter and Paul Cathedral on Sept. 26, 2006.
“The remains will first arrive at the Alexander Nevsky church in St. Petersburg’s suburb of Peterhof — the summer residence of Russian tsars famed for its grandiose fountains — for a memorial service,” Ivan Artsishevsky, a representative of the Romanov family and the St. Petersburg city government’s head of state protocol, said Tuesday at a news conference.
After the service at Peterhof, the coffin with the remains of Maria Fyodorovna, who was born as the Danish princess Dagmar, will go to St. Isaac’s Cathedral, Artsishevsky announced.
There, Alexy II, patriarch of the Russian Orthodox church, will conduct a funeral service.  
The remains will then be taken to be reburied next to Maria Fyodorovna’s husband, Tsar Alexander III, in the SS. Peter and Paul Cathedral, where the remains of her slain son and his family were also reburied in 1998.
“This reburial will be a tribute to Russian history,” Artsishevsky said.
“This way we will complete a very important historical task of returning the remains of all the tsar’s family to their homeland,” he said.
The ceremony will be attended by representatives of European royal families, Romanov family members, and Russian authorities, he added. Artsishevsky said he knew of the opposition to the reburial from the widow of Maria Fyodorovna’s grandson, Tikhon Kulikovsky.
However, he said the only living close relative of Maria Fyodorovna, her grandson duke Mikhail, who lives in Australia, agreed to it and had given his written approval in a letter to President Vladimir Putin.
The burial of Maria Fyodorovna — unlike that of Nicholas II, his wife and three of their children — is expected to be a quiet affair because there is no doubt as to the identity of her remains. She also stipulated that she should be buried in Peter and Paul Fortress with her husband and son. 
Initially, Maria Fyodorovna was buried in Copenhagen’s Roskilde Cathedral in 1928. She was born in 1847 as Maria Sofia Frederick Dagmara, daughter of the Danish king, Christian IX. 
In 1866, she married Tsarevich Alexander of Russia (the future Tsar Alexander III), converted to the Orthodox faith and changed her name to Maria Fyodorovna Romanova. Together they had six children. 
After her son abdicated the throne in 1917, she escaped from St. Petersburg with her daughter to the Crimea, and from there in 1919 they fled Russia for England and later Copenhagen. Even in the last hours of her life, she refused to believe that the Bolsheviks had murdered her son and his family. 
The decision to rebury her remains was initiated by Duke Nikolai Romanov, great grandson of Tsar Nicholas I, who now heads the Romanov Dynasty Association in Switzerland. He wrote to both Putin and former St. Petersburg governor Vladimir Yakovlev and met Denmark’s Queen Margrethe II.                             

TITLE: IN BRIEF
TEXT: Open Day at Mission
ST. PETERSBURG (SPT) —The German General Consulate in St. Petersburg will for the first time hold an open day on Saturday from 2 p.m. until 10 p.m. when excursions will be held and discussions of the consulate’s functions will be conducted.
Every hour different groups, including Comic Trust, will perform in the consulate’s inner yard and a Miss and Mr. German Language will be selected. There will be opportunities to sample German food and drink.
Entry is free. Tickets can be obtained today from the consulate, from the Goethe Institute and from the DAAD information center at the Herzen State Pedagogical University or by sending an e-mail to pr-100@stpe.auswaertiges-amt.de.

Discontent on Border
n MOSCOW (AP) — The Foreign Ministry said Wednesday that it would be impossible to submit border treaties with Estonia for ratification by the State Duma following changes the Estonian parliament made to the preamble. 
The amended text — which includes an indirect reference to the Soviet occupation of the Baltic nation — “contains unacceptable statements ... that create a falsified context” for the treaties, the ministry said in a press statement. 
Soviet troops occupied the three Baltic states in 1940. Nazi troops took them over in 1941, but the Soviets returned in 1944.

Attack on Consulate
ST. PETERSBURG (SPT) — Vandals fired paint at the facade of the Latvian Consulate in St. Petersburg on Wednesday morning, Interfax reported, quoting Hardijs Baumanis, the consul general.
Small containers with blue and red paint were fired at the facade about 3 a.m. on Wednesday, Interfax cited the consul general as saying.
“We have informed the Russian Foreign Ministry branch in St. Petersburg about it and that those responsible be found and that they put the facade of the building in order,” Baumanis said.
A similar attack on the consulate was made in March, the report said. 
Border Strike Ends
HELSINKI (SPT) — Negotiations to end a strike by the Finnish Frontier Guard that was threatening to escalate over an industrial dispute were successful, the Helsingin Sanomat reported Wednesday.
The sides reached an agreement on the conflict after the guards had begun a second round of industrial action on Tuesday after a strike early in the month on the Finnish- Russian border.

TITLE: Bill Bars Foreign Firms From Tenders
AUTHOR: By Maria Golovnina
PUBLISHER: Reuters
TEXT: The government has submitted to the State Duma the draft of a new natural resources law that seeks to ban foreign companies from developing some of the country’s most lucrative mineral assets.
The focus of lengthy amendments to the so-called subsoil law, unveiled by the Natural Resources Ministry late Wednesday, is a ban on bids by foreign-controlled companies in tenders for strategic oil and metal deposits.
The 150-page document said the move would help “guarantee the state’s defense and security, including economic security.”
The draft, posted on the ministry’s web site, said the ban would specifically affect firms where foreigners owned more than 50 percent of shares, dominated the board of directors or executive bodies, or controlled more than half of voting shares.
Over the past year, President Vladimir Putin’s government has introduced a number of radical changes — from a shakeup of the electoral system to curbs on direct foreign investment — due to what officials say is the need to boost the country’s security in the face of growing terrorist and economic threats.
But economists have criticized those measures, saying the foreign ban contradicts market-economy principles and is another sign of deterioration in business confidence that could further harm Russia’s faltering economic growth.
A Natural Resources Ministry spokeswoman said the law was submitted to parliament earlier this week.
After passing through the State Duma, the draft has to be approved by the Federation Council and signed into law by Putin in a process that could drag on until the end of the year.
The new law does not specify the key point foreign investors — such as oil major BP or gold giant Barrick — want to know: which strategic deposits the law would affect.
The ministry has said it wanted the rule to apply to many of Russia’s prize natural assets, including a list of oil fields in the Barents Sea, the Timan-Pechora area and the Yamal-Nenets autonomous district, and the Sakhalin-3 project in the Far East — as well as Sukhoi Log, Eurasia’s biggest gold deposit, and the Udokan copper field.
Russia argues that similar protective laws are being applied in many mineral-rich countries, such as Canada and South Africa.
“This law’s concept is to create conditions to attract private investment in the natural resources sector, including foreign investment, on the basis of strict regulation of activities within the sector to protect state and corporate interests,” the ministry said in a separate note to the draft.
Analysts have praised some of the law’s new points, such as a decision to let companies develop deposits they discovered themselves without having to auction them, which should boost much-needed investment in the exploration of undeveloped oil and gold fields in Siberia and the Far East.

TITLE: City Firms Start Selling Insurance On Web
AUTHOR: By Yuriy Humber
PUBLISHER: The St. Petersburg Times
TEXT: It’s not easy to spice up insurance policies.
Aiming to reach Internet-wise clients with all too little time to spend in tedious lines at the store, two St. Petersburg insurers have uploaded their services to the web.
In addition to face-to-face sales at the office, Progress Neva, the city’s fourth-largest insurer, and Klass, twelfth-largest, this week launched several insurance products through Sapsan, the first St. Petersburg-based online brokerage.
Starting from the mandatory third-party motor liability, the insurers plan to offer online property and health insurance “if sales prove attractive,” said Sergei Kovalchuk, general director of Progress Neva.
Industry players say the online business will not add more than a few percent to sales figures, but rate it a worthwhile “niche to capture new client bases.”
Online insurance has operated in Russia since 1999, when Renaissance Insurance launched a web shop in Moscow. Although it has become standard practice for the capital’s insurers, no firms outside Moscow considered the move, blaming mainly Russia’s low Internet and credit card usage, and the population’s distrust of web payments.
Since 2003, when the government made third party motor liability mandatory, Moscow’s online insurance sales have rocketed, as people sought a way out of spending long hours in a line outside an insurer’s office.
Renaissance Insurance earned $720,000 from policies sold on the web in 2004, a jump of more than 75 percent on the previous year, said Andrei Radyushin, head of the company’s online project.
Despite being available at any spot in the country with Internet access, Radyushin said that the company’s clientele was overwhelmingly from the Moscow area, with St. Petersburg clients accounting for less than 5 percent of total sales.
Unlike the Moscow web-insurance model, managed directly by the company, the St. Petersburg firms have opted to launch through a broker, which will shoulder the responsibility of online sales promotion and administration.
“We decided to start from compulsory insurance policies and then measure the response,” Kovalchuk said, adding that Progress Neva will settle for 50 to 100 policies sold a month to continue developing the venture. “Using a broker we can reach clients that perhaps our land offices or our agents cannot.”
Alexei Kultyshev, Sapsan’s marketing and sales manager, said that the web broker wants to attract up to 20 insurers, mainly St. Petersburg-based, to present clients with a range. Currently, Sapsan is negotiating with two of the city’s major insurers and three banks that will support online credit card payments, he said.
At the moment, online clients can use Webmoney, Yandex Dengi, Yaport or Rapido debit payment systems. Soon, Sapsan intends to offer payment via Visa credit cards.
Kultyshev estimates that Sapsan will be able to sell up to 700 policies this year, promoting mainly “box product” insurance — policies that do not require legal references and underwriting. Sapsan will spend a modest $10,000 on promoting its insurance online trade this year.

TITLE: Yukos Mulls Selling Core Assets
PUBLISHER: Combined Reports
TEXT: MOSCOW — Shattered oil company Yukos could sell off its core assets if “absolutely necessary” in order to pay the remains of some $28 billion in back tax claims, Yukos vice president Frank Rieger told the company’s annual shareholders meeting Thursday, according to news agencies.
Yukos saw its crown jewel — the 1 million barrel-per-day Yuganskneftegaz subsidiary — transferred for about $9 billion to state-owned Rosneft after its forced sale against Yukos’ debts in a disputed December auction.
Output at the company, which was once Russia’s biggest crude producer, stands at 600,000 barrels per day, Rieger said, but he warned that this figure could drop as the company cuts back spending on modernization and repairs. Ninety percent of Yukos’ 2005 revenues would go toward paying the tax bills, he said.
Assuming authorities give permission, “Yukos is ready to sell both noncore and core assets to meet its obligations, both to creditors and to consumers,” Interfax quoted Rieger as saying. Yukos assets were frozen as the tax claims against it mounted.
Rieger said managers would try to preserve Yukos as a vertically integrated company — one that includes units from extraction to marketing — and he was expected to discuss legal efforts to protect minority shareholders. The company’s value has fallen from $40 billion to around $2 billion in the wake of the state’s legal assault.
The tax campaign against Yukos, together with the criminal trial that has landed its founder Mikhail Khodorkovsky in prison, is widely seen as Kremlin retribution for Khodorkovsky’s funding of opposition parties and a simultaneous attempt to reassert state control over the nation’s strategically important oil sector.
Board chairman Viktor Gerashchenko said Yukos had paid off 407.4 billion rubles ($14.3 billion), including the $9 billion price tag for Yugansk, but it still had debts of 311 billion rubles ($10.9 billion). 
“In 2004 Yukos accounted for 5 percent of [Russia’s] budget revenues, more than Russia spent on defense,” he said. “The company will continue to pay back its debts although it believes that they are unjustified,” he told reporters before the shareholder meeting. 
Separately, Gerashchenko told shareholders that Yukos had agreed to sell 45 percent of the company to a U.S. oil company in the third quarter of 2003, Interfax reported. The deal would have been worth $25 billion, Gerashchenko said, but it fell apart after a planned merger with smaller Russian oil company Sibneft foundered amid mounting pressure on Yukos and its founders.

TITLE: Cukurova Reaches $3.3 Bln Turkcell Accord With Alfa
AUTHOR: By Ben Holland and Yalman Onaran
PUBLISHER: Bloomberg
TEXT: MOSCOW — Turkey’s Cukurova group, the main owner of Turkcell Iletisim Hizmetleri AS, agreed with Russia’s Alfa Group on a $3.3 billion package including loans and the sale of bonds convertible to Turkcell shares.
Alfa will lend Cukurova $1.71 billion over six years and buy convertible bonds worth a further $1.59 billion, the Turkish company told the Istanbul Stock Exchange today. The bonds can be converted into stock in 18 months, giving Alfa 13.2 percent of Turkcell, Turkey’s biggest mobile-phone company, Cukurova said.
Cukurova has been seeking to sell part of its 40 percent stake in Turkcell along with other assets to help repay the more than $2 billion it owes the Turkish government. 
The Istanbul-based group had agreed to sell a controlling stake to Sweden’s TeliaSonera AB for $3.1 billion before pulling out of the deal last month, prompting the Nordic company to take legal action.
“In the long run it’s not a good thing for Turkcell; the dispute between the shareholders will continue,’’ said Basak Engin, an analyst at Oyak Securities in Istanbul. “Cukurova expects to repay this loan, I think, with dividends or other cash flows coming from Turkcell.’’
Stockholm-based TeliaSonera, which already owns 37 percent of Turkcell, has asked an international arbitration court in Switzerland to rule on the validity of the stake sale agreement.
In the meantime, TeliaSonera asked the Geneva civil court for an injunction preventing Cukurova from negotiating with any other party about a stake sale. TeliaSonera Director Michael Kongstad declined to comment until he has studied the Cukurova statement.
Cukurova said it will use the money to repay the government and buy back a 13 percent stake in Turkcell that is held by Yapi & Kredi Bankasi AS, a bank Cukurova agreed to sell. The group was stripped of its banking license by regulators when another lender it owned collapsed in 2002 with $3 billion in losses.
Moscow-based Alfa may be using the agreement with Cukurova as leverage in its dispute with TeliaSonera regarding a Russian phone company, analysts said. TeliaSonera owns 44 percent of MegaFon, Russia’s third-largest cellular-phone company, and has sided with TelecomInvest and IPOC International Growth Fund Ltd. in a dispute with Alfa over ownership of MegaFon.

TITLE: New Shipping Register On the Way
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT:  MOSCOW — The State Duma approved last week long-awaited amendments to a legislative package that could ease business for Russian shipowners and could potentially infuse billions of dollars into the domestic shipbuilding industry. 
Over 400 deputies voted in the first reading for the amendments in federal legislation relating to the creation of the Russian International Shipping Register, the Transportation Ministry said in a statement. The second and third Duma readings are scheduled to take place by the end of this year.
When finally voted into law, the new register will provide Russian shipowners with breaks on profit, property, transport and value added taxes. It will also ease duties on the importation of foreign-made vessels.
In offering such incentives, the state hopes to see more ships operating under the Russian flag as well as to jumpstart orders by Russian operators from domestic shipyards.
At present, domestically manufactured ships cost some 25 percent to 30 percent more than their foreign counterparts, but, once the legal amendments and tax breaks come into effect, the price of Russian ships should go down, the ministry said. In addition, international banks are more eager to give loans to finance the production of ships registered in one of the international registers, the Transportation Ministry said.
 Of the 211 ships built for Russian companies over the last 12 years, over 90 percent are registered abroad, under the so-called flags of convenience of Liberia, Panama or Malta, which offer more friendly tax regimes. 
All combined, taxes for Russian-registered vessels can reach 60 percent, while they stand at only 4 percent in other countries, according to the ministry. As a result, of the 450 million tons of Russian trade turnover shipped by sea last year, ships flying the Russian flag accounted for just $300 million, roughly 5 percent.
By the government’s calculations, the new register will usher in an increase in the number of Russian-flagged ships to the tune of 750 vessels — with a total deadweight at 17 million tons and combined worth of $13 billion, the ministry said. The new regulations should also lead to a sharp rise in domestic orders for ships, potentially creating up to 150,000 new jobs.
“It opens a new era for Russian shipbuilders: It will help restore their links to shipowners, which have been severed over the past years,” said Viktor Yuryev of the fleet management department at Sovkomflot, Russia’s largest shipper.
It is difficult to imagine that ships in foreign jurisdictions will hoist the Russian flag, as it is still “a new phenomenon and the international banks don’t yet know how to deal with it,” said Oleg Rumyantsev, spokesman for the Far Eastern Shipping Co., which sails 20 out of its 80 ships under foreign registers.

TITLE: Brewer to Merge Its Russian Assets
PUBLISHER: Reuters
TEXT: The Russian beer venture of Denmark’s Carlsberg and Britain’s Scottish & Newcastle plans to start consolidating Russian assets with its Krasnoyarsk brewer Pikra, a spokesman said Monday.
Alexei Kedrin said the consolidation of Baltic Beverages Holding’s 70.32 percent stake in Pikra, worth $67.5 million, was on, the agenda of a July 7 shareholders meeting.
BBH, owned 50-50 by Scottish & Newcastle and Carlsberg, has said it will consolidate its assets in Russia through its key holding, Baltika, Russia’s biggest brewer. BBH owns 75.4 percent of the shares in Baltika.
If approved, the transaction will give Baltika 86.7 percent of Pikra, up from 16.38 percent now.
Apart from Baltika and Pikra, BBH also owns controlling stakes in the Yarpivo and Vena breweries, and industry analysts have said the holding company may want to consolidate the assets by bringing the plants under one share.


TITLE: Bill Bars Foreign Firms From Tenders
AUTHOR: By Maria Golovnina
PUBLISHER: Reuters
TEXT: The government has submitted to the State Duma the draft of a new natural resources law that seeks to ban foreign companies from developing some of the country’s most lucrative mineral assets.
The focus of lengthy amendments to the so-called subsoil law, unveiled by the Natural Resources Ministry late Wednesday, is a ban on bids by foreign-controlled companies in tenders for strategic oil and metal deposits.
The 150-page document said the move would help “guarantee the state’s defense and security, including economic security.”
The draft, posted on the ministry’s web site, said the ban would specifically affect firms where foreigners owned more than 50 percent of shares, dominated the board of directors or executive bodies, or controlled more than half of voting shares.
Over the past year, President Vladimir Putin’s government has introduced a number of radical changes — from a shakeup of the electoral system to curbs on direct foreign investment — due to what officials say is the need to boost the country’s security in the face of growing terrorist and economic threats.
But economists have criticized those measures, saying the foreign ban contradicts market-economy principles and is another sign of deterioration in business confidence that could further harm Russia’s faltering economic growth.
A Natural Resources Ministry spokeswoman said the law was submitted to parliament earlier this week.
After passing through the State Duma, the draft has to be approved by the Federation Council and signed into law by Putin in a process that could drag on until the end of the year.
The new law does not specify the key point foreign investors — such as oil major BP or gold giant Barrick — want to know: which strategic deposits the law would affect.
The ministry has said it wanted the rule to apply to many of Russia’s prize natural assets, including a list of oil fields in the Barents Sea, the Timan-Pechora area and the Yamal-Nenets autonomous district, and the Sakhalin-3 project in the Far East — as well as Sukhoi Log, Eurasia’s biggest gold deposit, and the Udokan copper field.
Russia argues that similar protective laws are being applied in many mineral-rich countries, such as Canada and South Africa.
“This law’s concept is to create conditions to attract private investment in the natural resources sector, including foreign investment, on the basis of strict regulation of activities within the sector to protect state and corporate interests,” the ministry said in a separate note to the draft.
Analysts have praised some of the law’s new points, such as a decision to let companies develop deposits they discovered themselves without having to auction them, which should boost much-needed investment in the exploration of undeveloped oil and gold fields in Siberia and the Far East.

TITLE: City Firms Start Selling Insurance On Web
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: It’s not easy to spice up insurance policies.
Aiming to reach Internet-wise clients with all too little time to spend in tedious lines at the store, two St. Petersburg insurers have uploaded their services to the web.
In addition to face-to-face sales at the office, Progress Neva, the city’s fourth-largest insurer, and Klass, twelfth-largest, this week launched several insurance products through Sapsan, the first St. Petersburg-based online brokerage.
Starting from the mandatory third-party motor liability, the insurers plan to offer online property and health insurance “if sales prove attractive,” said Sergei Kovalchuk, general director of Progress Neva.
Industry players say the online business will not add more than a few percent to sales figures, but rate it a worthwhile “niche to capture new client bases.”
Online insurance has operated in Russia since 1999, when Renaissance Insurance launched a web shop in Moscow. Although it has become standard practice for the capital’s insurers, no firms outside Moscow considered the move, blaming mainly Russia’s low Internet and credit card usage, and the population’s distrust of web payments.
Since 2003, when the government made third party motor liability mandatory, Moscow’s online insurance sales have rocketed, as people sought a way out of spending long hours in a line outside an insurer’s office.
Renaissance Insurance earned $720,000 from policies sold on the web in 2004, a jump of more than 75 percent on the previous year, said Andrei Radyushin, head of the company’s online project.
Despite being available at any spot in the country with Internet access, Radyushin said that the company’s clientele was overwhelmingly from the Moscow area, with St. Petersburg clients accounting for less than 5 percent of total sales.
Unlike the Moscow web-insurance model, managed directly by the company, the St. Petersburg firms have opted to launch through a broker, which will shoulder the responsibility of online sales promotion and administration.
“We decided to start from compulsory insurance policies and then measure the response,” Kovalchuk said, adding that Progress Neva will settle for 50 to 100 policies sold a month to continue developing the venture. “Using a broker we can reach clients that perhaps our land offices or our agents cannot.”
Alexei Kultyshev, Sapsan’s marketing and sales manager, said that the web broker wants to attract up to 20 insurers, mainly St. Petersburg-based, to present clients with a range. Currently, Sapsan is negotiating with two of the city’s major insurers and three banks that will support online credit card payments, he said.
At the moment, online clients can use Webmoney, Yandex Dengi, Yaport or Rapido debit payment systems. Soon, Sapsan intends to offer payment via Visa credit cards.
Kultyshev estimates that Sapsan will be able to sell up to 700 policies this year, promoting mainly “box product” insurance — policies that do not require legal references and underwriting. Sapsan will spend a modest $10,000 on promoting its insurance online trade this year.

TITLE: Yukos Mulls Selling Core Assets
PUBLISHER: Combined Reports
TEXT: MOSCOW — Shattered oil company Yukos could sell off its core assets if “absolutely necessary” in order to pay the remains of some $28 billion in back tax claims, Yukos vice president Frank Rieger told the company’s annual shareholders meeting Thursday, according to news agencies.
Yukos saw its crown jewel — the 1 million barrel-per-day Yuganskneftegaz subsidiary — transferred for about $9 billion to state-owned Rosneft after its forced sale against Yukos’ debts in a disputed December auction.
Output at the company, which was once Russia’s biggest crude producer, stands at 600,000 barrels per day, Rieger said, but he warned that this figure could drop as the company cuts back spending on modernization and repairs. Ninety percent of Yukos’ 2005 revenues would go toward paying the tax bills, he said.
Assuming authorities give permission, “Yukos is ready to sell both noncore and core assets to meet its obligations, both to creditors and to consumers,” Interfax quoted Rieger as saying. Yukos assets were frozen as the tax claims against it mounted.
Rieger said managers would try to preserve Yukos as a vertically integrated company — one that includes units from extraction to marketing — and he was expected to discuss legal efforts to protect minority shareholders. The company’s value has fallen from $40 billion to around $2 billion in the wake of the state’s legal assault.
The tax campaign against Yukos, together with the criminal trial that has landed its founder Mikhail Khodorkovsky in prison, is widely seen as Kremlin retribution for Khodorkovsky’s funding of opposition parties and a simultaneous attempt to reassert state control over the nation’s strategically important oil sector.
Board chairman Viktor Gerashchenko said Yukos had paid off 407.4 billion rubles ($14.3 billion), including the $9 billion price tag for Yugansk, but it still had debts of 311 billion rubles ($10.9 billion). 
“In 2004 Yukos accounted for 5 percent of [Russia’s] budget revenues, more than Russia spent on defense,” he said. “The company will continue to pay back its debts although it believes that they are unjustified,” he told reporters before the shareholder meeting. 
Separately, Gerashchenko told shareholders that Yukos had agreed to sell 45 percent of the company to a U.S. oil company in the third quarter of 2003, Interfax reported. The deal would have been worth $25 billion, Gerashchenko said, but it fell apart after a planned merger with smaller Russian oil company Sibneft foundered amid mounting pressure on Yukos and its founders. 	  

TITLE: Cukurova Reaches $3.3 Bln Turkcell Accord With Alfa
AUTHOR: By Ben Holland and Yalman Onaran
PUBLISHER: Bloomberg
TEXT: MOSCOW — Turkey’s Cukurova group, the main owner of Turkcell Iletisim Hizmetleri AS, agreed with Russia’s Alfa Group on a $3.3 billion package including loans and the sale of bonds convertible to Turkcell shares.
Alfa will lend Cukurova $1.71 billion over six years and buy convertible bonds worth a further $1.59 billion, the Turkish company told the Istanbul Stock Exchange today. The bonds can be converted into stock in 18 months, giving Alfa 13.2 percent of Turkcell, Turkey’s biggest mobile-phone company, Cukurova said.
Cukurova has been seeking to sell part of its 40 percent stake in Turkcell along with other assets to help repay the more than $2 billion it owes the Turkish government. 
The Istanbul-based group had agreed to sell a controlling stake to Sweden’s TeliaSonera AB for $3.1 billion before pulling out of the deal last month, prompting the Nordic company to take legal action.
“In the long run it’s not a good thing for Turkcell; the dispute between the shareholders will continue,’’ said Basak Engin, an analyst at Oyak Securities in Istanbul. “Cukurova expects to repay this loan, I think, with dividends or other cash flows coming from Turkcell.’’
Stockholm-based TeliaSonera, which already owns 37 percent of Turkcell, has asked an international arbitration court in Switzerland to rule on the validity of the stake sale agreement.
In the meantime, TeliaSonera asked the Geneva civil court for an injunction preventing Cukurova from negotiating with any other party about a stake sale. TeliaSonera Director Michael Kongstad declined to comment until he has studied the Cukurova statement.
Cukurova said it will use the money to repay the government and buy back a 13 percent stake in Turkcell that is held by Yapi & Kredi Bankasi AS, a bank Cukurova agreed to sell. The group was stripped of its banking license by regulators when another lender it owned collapsed in 2002 with $3 billion in losses.
Moscow-based Alfa may be using the agreement with Cukurova as leverage in its dispute with TeliaSonera regarding a Russian phone company, analysts said. TeliaSonera owns 44 percent of MegaFon, Russia’s third-largest cellular-phone company, and has sided with TelecomInvest and IPOC International Growth Fund Ltd. in a dispute with Alfa over ownership of MegaFon.

TITLE: New Shipping Register On the Way
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW — The State Duma approved last week long-awaited amendments to a legislative package that could ease business for Russian shipowners and could potentially infuse billions of dollars into the domestic shipbuilding industry. 
Over 400 deputies voted in the first reading for the amendments in federal legislation relating to the creation of the Russian International Shipping Register, the Transportation Ministry said in a statement. The second and third Duma readings are scheduled to take place by the end of this year.
When finally voted into law, the new register will provide Russian shipowners with breaks on profit, property, transport and value added taxes. It will also ease duties on the importation of foreign-made vessels.
In offering such incentives, the state hopes to see more ships operating under the Russian flag as well as to jumpstart orders by Russian operators from domestic shipyards.
At present, domestically manufactured ships cost some 25 percent to 30 percent more than their foreign counterparts, but, once the legal amendments and tax breaks come into effect, the price of Russian ships should go down, the ministry said. In addition, international banks are more eager to give loans to finance the production of ships registered in one of the international registers, the Transportation Ministry said.
 Of the 211 ships built for Russian companies over the last 12 years, over 90 percent are registered abroad, under the so-called flags of convenience of Liberia, Panama or Malta, which offer more friendly tax regimes. 
All combined, taxes for Russian-registered vessels can reach 60 percent, while they stand at only 4 percent in other countries, according to the ministry. As a result, of the 450 million tons of Russian trade turnover shipped by sea last year, ships flying the Russian flag accounted for just $300 million, roughly 5 percent.
By the government’s calculations, the new register will usher in an increase in the number of Russian-flagged ships to the tune of 750 vessels — with a total deadweight at 17 million tons and combined worth of $13 billion, the ministry said. The new regulations should also lead to a sharp rise in domestic orders for ships, potentially creating up to 150,000 new jobs.
“It opens a new era for Russian shipbuilders: It will help restore their links to shipowners, which have been severed over the past years,” said Viktor Yuryev of the fleet management department at Sovkomflot, Russia’s largest shipper.
It is difficult to imagine that ships in foreign jurisdictions will hoist the Russian flag, as it is still “a new phenomenon and the international banks don’t yet know how to deal with it,” said Oleg Rumyantsev, spokesman for the Far Eastern Shipping Co., which sails 20 out of its 80 ships under foreign registers.

TITLE: Brewer to Merge Its Russian Assets
PUBLISHER: Reuters
TEXT: The Russian beer venture of Denmark’s Carlsberg and Britain’s Scottish & Newcastle plans to start consolidating Russian assets with its Krasnoyarsk brewer Pikra, a spokesman said Monday.
Alexei Kedrin said the consolidation of Baltic Beverages Holding’s 70.32 percent stake in Pikra, worth $67.5 million, was on, the agenda of a July 7 shareholders meeting.
BBH, owned 50-50 by Scottish & Newcastle and Carlsberg, has said it will consolidate its assets in Russia through its key holding, Baltika, Russia’s biggest brewer. BBH owns 75.4 percent of the shares in Baltika.
If approved, the transaction will give Baltika 86.7 percent of Pikra, up from 16.38 percent now.
Apart from Baltika and Pikra, BBH also owns controlling stakes in the Yarpivo and Vena breweries, and industry analysts have said the holding company may want to consolidate the assets by bringing the plants under one share.

TITLE: True Reforms Have Not Yet Begun
AUTHOR: By Grigory Yavlinsky
TEXT: A roadmap for Russian reform needs first and foremost to establish the institutional infrastructure required by a developed country.
As with the problem of basic values, the question of what comes first — a high level of economic development or the institutions that accompany it — has no simple, straightforward answer. They should evolve simultaneously. It makes no sense to attempt to build progressive institutions and expect them to function efficiently in a poor and stagnating society. Yet it would be just as pointless to insist that economic growth will automatically lead to a more effective and less corrupt state administration, to an independent and qualified judiciary, to armed forces worthy of a developed nation, or to a modern education system. Moreover, there is no reason to believe growth will lead to better institutions for executing economic policy, better oversight agencies in the banking and financial sectors or fair and efficient social service agencies.
For this reason, the very first item on the agenda for future reforms must be institutional reforms, which will be the precondition for, and not the product of, doubling the GDP and the government’s other ambitious economic goals. Institutional reform, however, does not mean yet another round of administrative reforms that merge ministries and shake up state cadres. Instead, reform should target civil service and radically change the motivations of those working for the state. Civil service should be made more attractive to talented, creative and energetic people, while dramatically raising requirements for skills and honesty. This reform would mean not only significantly higher pay scales, but would also establish benefits packages for state officials and a system for evaluating past performance. Moreover, civil servants need to have lawful incentives to pursue their careers, and those who violate clearly stated rules and ethics should be subject to penalties. The activities of state agencies should be painstakingly regulated to increase transparency and give the public and the parliament access to information.
The next area that demands our attention is the courts. Once past legal decisions are amnestied, individuals working in the legal system should be held accountable for ungrounded rulings to a far greater extent than they are today. Moreover, anyone, including officials in the executive branch, who tries to exert pressure on the courts should be held responsible. The tough and inevitable punishment of any unlawful court decisions should outweigh their potential benefits. Oversight of the court system should keep any one group of interests or political forces from dominating the others. At the same time, judges must be granted fair and effective immunity. Finally, a review system to re-examine past unlawful verdicts should be established.
Undoubtedly, to make the courts work, we need to pass and, most importantly, enforce laws aimed at preventing corruption and undermining organized crime. Clearly, the usual universal methods for dealing with these evils will not work when the evils are so widespread. To this end, we must establish special agencies with sufficient authority that are armed with the proper tools and legal expertise, yet wholly accountable for their activities. The ideas and practical experience are out there, and other countries have solved these problems. All we need to start the process is the political will.
Another crucial institutional reform involves protecting the freedom of information while making tougher rules to punish those who abuse it. We desperately need to come up with unambiguous criteria for when information access and distribution should be limited, as well as rules for punishing those who violate these norms and professional ethics. Otherwise, society will never break out of the vicious cycle of information blackout, when mass media are used almost exclusively as economic and political weapons. This cycle ensures that even the best efforts to reform politics and the economy are doomed to fail.
Two other areas that have long cried for reform are the natural-resource monopolies and the housing and utilities sector, areas that are currently being restructured in a misguided and misleading way. The essence of reforms to these sectors should be transparency and openness to external monitoring. Instead, we are afflicted with endless discussions of reorganization, of mergers and regroupings. Whatever their result, they will not increase the transparency of the financial flows circulating in these crucial sectors.
Finally, the last but not least part of institutional reform is restructuring the basis of the modern social state: the social assistance and pension system, as well as labor relations. This reform cannot be dismissed by saying that Russians have low incomes and the state has limited financial capabilities. A strong social state is not the product of economic development but rather the precondition of development. Workers without any safety net who live in fear of random firings, money-sapping illness or an impoverished old age cannot be full-fledged actors in a postindustrial, 21st-century economy.
While instituting reforms, we should pursue a second direction in our roadmap. We need to stimulate long-term investment and complex, cutting-edge economic activity. Of course, too much state intervention is bad for society and the economy and leads to inefficiency and abuse, encouraging irrational economic behavior and a substantial reduction in growth. However, it is just as clear that to jumpstart the new economy and increase competitiveness, the state needs to get involved in attracting resources and entrepreneurs to particular technologically complex sectors that demand long-term planning and come with higher risks. For this reason, these sectors are inevitably dependent on goodwill from the government. Getting rid of incompetent bureaucratic meddling is a necessary precondition for Russia to join the ranks of the developed, postindustrial economies.
Another, related precondition is a large and ethical business community that is willing to work with the government. The state and business should cooperate when business’ competitiveness in the global economy directly depends on the government’s competitiveness, on its ability to reduce long-term risks and protect the nation’s business from negative non-market factors. Creating efficient private-public partnerships and creating effective incentives for both parties to adapt to the quickly changing global economy is a crucial direction in the process of forced modernization.
As the third direction for reforms, the areas that can and must provide resources for future economic and social development should undergo substantial changes: education and scientific research, which will provide intellectual resources, and the national financial sector, which will provide capital. People have long discussed the need to reform these sectors and have come up with dozens of programs. Yet the limited quantity and quality of actual measures that have been successfully implemented boggles the mind. As a result, these critical areas will never be able to provide solutions to the major problems we face, and their underdevelopment is already slowing economic growth. These sectors cannot develop and function without state policy, and they are at the heart of any modernizing reform program.
Naturally, the areas that demand reform in Russia extend beyond the few sectors discussed above. There is a pressing need to reform politics and modernize security, foreign policy and health care. But the widely proclaimed belief that the biggest reforms are already behind us is an outright falsehood. Reforms in the true sense of the word have yet to begin. To start them rolling, to start the long and difficult journey, we need to take a long, hard look at reality and exhibit unwavering political will.

Grigory Yavlinsky is the head of the Yabloko party. He contributed this comment, the second in a two-part series, to The St. Petersburg Times. The first comment appeared June 21.

TITLE: Goodwill on Show in Estonia 
AUTHOR: By Vladimir Kovalev
TEXT: Last week I witnessed a trend that gave me a positive view of relations between Russians and the ethnic Russians and Balts in the Baltic states.
While traveling with St. Petersburg businesspeople on a trip to Estonia it became clear that in spite of disagreements between politicians in Moscow and Tallinn, ordinary people, businesses especially, are making a huge effort in getting closer to each other. They want to show their good will, which is the only way to achieve mutual advantages.
As always happens, one bad apple can spoil the whole bunch, and some Russians just cannot restrain themselves from hitting their heads against the wall by raising arguments about the role of the Soviet Union in the history of the Baltic states. In contrast, ethnic Russians and Estonians in Estonia are falling over themselves to show that they want to be friends.
There was one such bad apple, but it was quickly thrown into the trashcan.
“I heard the question of occupation came up for discussion here at some point,” one Estonian businessman said in a short speech to his Russian guests during the trip, “This is not our topic. This is not our business; we don’t need it. We are friends here.”
It was visible how quickly the illusions about Estonians disappeared from the minds of Russian businesspeople as they talked to each other.
I was stunned how strong and solid such illusions were in the heads of ordinary Russians who are used to seeing the Baltic states only in a bad light, which is the way Kremlin-controlled media outlets generally portray them.
“It was my first trip to Estonia and, to be honest, when I was on my way there, I was scared,” one businesswoman told me as our bus left the border on its way back to St. Petersburg.
“When I was leaving St. Petersburg my parents told me there are fascists in Estonia, so I should be careful,” the woman continued. “My mother called me when I was in Narva and asked what it was like there. I told her it was fine because most people in Narva are Russians, but that I was not in Tallinn yet.”
“But when I came to Tallinn people spoke Russian to me again and were very friendly. There are no fascists,” she added. “I realized that I had an opinion [about Estonia] that is typical for an ordinary Russian, but that it was not correct.”
The Estonians did a very good job of trying to tear down the Iron Curtain hung over the eyes of Russians by state television and other Kremlin-controlled media outlets in recent years.
Top Russian politicians, who propagate the image in Russian society of enemies being across the Narva River, are likely to lose their dirty game if Estonian authorities and businesses continue developing contacts. Even if only one person realizes that their prejudices are wrong, then this realization will spread by chain reaction. Everybody has friends and relatives in Russia who will hear the truth.
I was pleasantly surprised to see how simple and open the Estonian authorities were in their approach to the guests from Russia.
“I was engaged in business myself in St. Petersburg in the early 1990s. I sold cucumbers at a local market,” a Tallinn city government official said in his speech to Russians.
It was clear that he said this to try to break down barriers to get closer to the guests.
About 10 years after the official sold his last cucumber in St. Petersburg, he was here in Tallinn to show Russians new opportunities that people can enjoy on the territory of the new EU member.
And here I noticed another good trend. We Russians were surprised how well and smoothly business runs in Estonia. It operates with much less bureaucracy than in Russia. The laws are clear and tax policies are reasonable. The businesspeople were envious, and were pleased that Estonians have demonstrated the ability to teach their former big brother how to do business.
That Estonia is ready to teach Russia a business lesson is a really promising development. What is more, Russians are ready to sign up to this school.

TITLE: Mariinsky reloaded
AUTHOR: By Paul Abelsky
PUBLISHER: The St. Petersburg Times
TEXT: The imminent demolition of the House of Culture of the First Five Year Plan will initiate the city’s most ambitious architectural project in recent memory. 
The gray Soviet-era monolith will make way for the a new Mariinsky Theater building, a daring extravaganza of color and form conceived by renowned French architect Dominique Perrault.
For a city steeped in a dignified architectural tradition, the planned expansion of the Mariinsky Theater has provided a dose of excitement and anxiety over the past two years. An international competition held in July 2003 determined a winner, Dominique Perrault, who has completed several large-scale public commissions around the world. 
In recent decades, landmark theater and museum buildings have transformed cities from Los Angeles to Bilbao. Most famously, the Sydney Opera House competition in 1956 led to Jorn Utzon’s pioneering building, which has become Sydney’s defining symbol. An iconic new structure in St. Petersburg also promises renewed world attention and a grand addition to one of Europe’s most striking cities.
But some lingering questions remain. Is the chosen design solution a cultural leap forward, a future-oriented scheme that will overturn decades of architectural isolation? Or is it just another encroachment on the existing built environment? 
The notion of a far-reaching expansion and renewal of the Mariinsky has certainly prevailed over calls for delicate intervention. But this is hardly the first time an entrenched cultural institution has opted for a daring architectural approach to boost its fortunes.
Sergei Tchoban, one of the expert members of the jury and a St. Petersburg-born architect who now lives and works in Berlin, said one of the essential goals had already been met. 
“The first important aspect of the development was to revive the tradition of convening large international design competitions that was almost discarded in Russia after the 1930s,” he said by e-mail from Berlin. “This is the way to place Russia and its gem – St. Petersburg – back on the map of the architectural world.”
On the other hand, an overly ambitious and starry-eyed jury may have chosen a radical design that proves too complex to implement and fit into the urban setting.
“The choice that was made is a ‘trendy,’ ‘fashionable’ one,” said Vladimir Frolov, editor of Pod Klyuch, a design and architecture monthly. “A more traditionalist approach was not given a proper opportunity during the competition. Then again, some shock therapy may be what this city needs.”
After more than a year of consultations with local officials, Perrault unveiled a revised version of his winning design in March. He prepared a set of modifications that were both nuanced and far-reaching. The expected costs have risen twofold to more than 200 million euros ($242 million).
Perrault has inscribed the new building into the neighborhood with structural alterations and a tempered color scheme. The billowing golden shell of the building was replaced by an interlocking grid structure based on the pattern of crisscrossed human fingers. The exterior has become more taut and compact, and 3 meters lower at its highest point. 
“The fact that changes are being made shows the architect’s responsiveness to the situation,” Frolov said. 
“On the other hand, it reveals that the project itself is malleable and likely to undergo further alterations. Perrault runs a risk of being too compliant and accommodating.”
While most changes pertaining to the structure itself were approved by the city’s architecture committee, Perrrault’s most daring initiative found little support. The architect voiced a proposal for a theater quarter, which would integrate the present and future Mariinsky Theater and encompass a set of buildings in their immediate vicinity. The scheme would also create an extensive pedestrian area around the theater. 
In effect, Perrault has tried to merge two predominant European approaches to theater development. The steel-and-glass Bastille OpÎra in Paris opened in 1989 as a modern opera expansion of the famed OpÎra National. The French left the original mid-19th century building intact and built the new outlet in a wholly different part of the city. In the case of Covent Garden in London, the state acquired adjoining property and created an interlinked theater district.
Perrault adopted a combination of these two schemes. The existing structure of the Mariinsky is left standing, while the addition offers a thoroughly modern design that also reshapes the surrounding urban environment.
“The city is certainly in need of this kind of integrated approach,” Frolov said. “It would be a benefit to everyone if Perrault were allowed to address problems of the surroundings while also concentrating on the new building itself.”
Indeed, what distinguished Perrault’s project from other contenders was its attention to the existing environment. During his public presentation at the Hermitage Theater in March, the architect compared the relationship between the old and the new buildings to the placement of a “raisin in a muffin.” 
Tchoban said Perrault’s design was one of the few that engaged the compositional possibilities of the site, which includes the axis of the Kryukov canal that converges on St. Nicholas Cathedral. 
“Perrault was practically the only one who handled the challenge,”  Tchoban said. “The absolute majority of other participants ignored the uniqueness of the situation and tried to obscure this spatial axis along the embankment.”
“Perrault found a sharp modern form within the framework of the existing site without infringing on the visual area of the canal and modifying the spatial relations in the vicinity. He even created a typological novelty for St. Petersburg – an ‘elastic,’ ‘creased’ city block.”
Critics are still skeptical that the new building can withstand the harsh climate. Local residents are also hostile to any expansion plans that change the layout of the neighborhood and might force residents out. 
Others question the architectural quality of the design, noting its disjointed spatial and sculptural character. 
“The functional component of the building is conceived separately from the rest of the structure,” said Mikhail Khazanov, a prominent Moscow architect and another expert member of the Mariinsky jury. 
“The ingenious golden ‘wrapping’ thus exists apart from the core of the theater. It is oriented more toward the city in an image-building gesture. The technical infrastructure required for theater performances and production comprises yet another discrete element, severed from all the rest. They all lead a kind of separate life.”
The ultimate success of the project depends on a consolidated approach that shows a critical but consistent support by the city but adheres to Perrault’s innovative solution. The process has already been slowed down by red tape with contentions over who would oversee the actual construction and implementation of the design. 
Lyudmila Likhacheva, Perrault’s personal representative in St. Petersburg, said the architect is awaiting the signing of the second contract this summer. All ongoing work has been suspended until then. 
“Europeans don’t like to work without a contract,” she said.
Perhaps the foremost consequence of the Mariinsky expansion is the resonance which the competition and the project have had in the local design and architecture community. While Perrault’s project has prompted a rewarding debate about architecture, it can also loosen the checks that have until now preserved St. Petersburg’s extraordinary urban ensemble.
“Perrault’s design can free the language of architecture here, which may in turn provoke creative people to develop new ideas and generate new things,” Frolov said. 
“But this relaxation of strictures might prove to be a perilous development for the city if it leads to knock-offs and derivate projects of various sorts. Some people would ask: if Perrault is doing this, why shouldn’t I try something similar.”

TITLE: Chernov’s choice
AUTHOR: By Sergey Chernov
TEXT: A local concert by The White Stripes, the Detroit-based rocking duo, is the event of the week or even the month, definitely. There are two disappointments, however.
First, the band refused to give any interviews to the Russian media, according to both the promoter FeeLee and The White Stripes’ Russian label Souyuz. The reason has not been provided.
Secondly, the band is scheduled to play at one of the worst local venues, Manezh Kadetskogo Korpusa. It was probably a suitable venue for cadets to ride their horses, which was what the building was originally designed for, but it proved inappropriate for live shows, as last year’s concert by David Byrne and Franz Ferdinand’s show late last month demonstrated. Not only were the place’s acoustics poor, its lack of air conditioning is likely to turn the venue into hell, considering the prevailing hot weather. In addition, for unexplained reasons, fans are forced to wait in line for one or two hours before they are let in.
The White Stripes, who have been scheduled to headline Britain’s Glastonbury Festival this Friday, are on tour to promote their new album “Get Behind Me Satan,” described as more acoustic and “focused on their rural roots.” 
According to Yahoo! Music, the recording debuted on the Billboard Top 200 at No. 3 last week, selling 189,000 copies in its first week of release. In Russia, the band will first go to Moscow where it play at Mekhanika on Sunday. It will perform at St. Petersburg’s Manezh Kadetskogo Korpusa on Monday.
Brazzaville, the dark pop band reformed in Barcelona, where its founder David Brown moved from Los Angeles last year, will perform in St. Petersburg this week. The band, now made up of two Catalans and two American expats living in Barcelona, is getting ready to do some recording for what will be Brazzaville’s fifth studio album and this new lineup’s first. According to Brown, about “8 or 9 of the songs are done, they were all written.”
Stereoleto, one of the local leading local dance festivals, will open this week. German electronic bands 2raumwohnung and Mo’ Horizons will be headlining the first night of the four-night festival that runs on Saturdays. Called “Stereo Efir” (“efir” can be translated as both “ether” and “air”), the opening night will be held at Molodyozhny Theater on the Fontanka River and its gardens on Saturday.
Volkovtrio, the avant-rock trio formed by improv upright bass player Vladimir Volkov with local rock musicians Slava Kurashov on guitar and Denis Sladkevich on drums, will mark its 10th anniversary this week. The event, to be held at Fish Fabrique, will coincide with the festivities dedicated to the Pushkinskaya 10 alternative art center’s 17th anniversary. It was at the “old,” differently located Fish Fabrique that Volkovtrio made its stage debut in June 1995. The band will perform on Saturday.
Don’t miss the urban-folk act La Minor that will play what is described as its last concert before its long European tour.

TITLE: Sense of place
AUTHOR: By Angelina Davydova
PUBLISHER: The St. Petersburg Times
TEXT: Cafe Me100 18 Ulitsa Lenina (Between Bolshoi Prospekt and Bolshaya Pushkarskaya Ulitsa on the Petrograd Side) Tel. 230 53 59 Open daily from 11 a.m. to midnight (Friday, Saturday until 1 a.m.) Menu in Russian only. Major credit cards accepted. Dinner for two with alcohol 1,545 rubles ($55)

Me100, or MeSto, means “place” and “me 100.” The second meaning refers to 100 members of the local St. Petersburg in-crowd, whose faces are depicted on a wall-width photograph that covers one side of the restaurant. The cafe is away from the bustling sidestreets of downtown Nevsky Prospekt, and far closer to a new elite area of residential housing and boutiques, which has re-emerged in one of the oldest parts of the city on the Petrograd Side.
Looking laidback and chic, Me100 creates the impression that it is mainly aimed as a place where the in-crowd of partygoers can relax. Me100, however, can and does provide good, and even exclusive cuisine, at rather affordable prices. The wait staff are certainly highly attentive, thoughtful and not annoying. The atmosphere is relaxing and enjoyable.
The minimalistic design of the place is mainly in lime-gray colors, with a few elements of decor, such as shelves with various bottles and tableware items. The grand, heavy chairs are worthy of mention; though hard to move, they are quite cozy and comfortable. Each has a small hole in the middle — as the waitress explained, there used to be small cushions attached to the chairs, but after a few months the cushions were removed. The design of the bathroom in Me100 is famous for its use of eight mirrors of various sizes, placed not only on the walls, but also on the ceiling, thus giving the room several extra dimensions. Last but not least is the scent of incense sticks burning in the room.
Me100 offers various cuisines — Japanese (sushi, sahimi, rolls, etc for an average of 40 rubles ($1.40) to 60 rubles ($2.10) per sushi), European (French and Italian), Russian. Salads vary from 120 rubles ($4.20) to 250 rubles ($8.90). The Konchalovsky salad with fresh lettuce, cherry tomatoes, herring and eggs for 150 rubles ($5.30) is very fresh and filling at the same time, while the Greek salad (which you can order as large chunks or fine ones) is also very fresh and can be a good option on a hot summer day.
The menu offers a wide range of hot mains reflecting various national cuisines. One can find several kinds of pastas, beefsteaks, meat and fish dishes in Italian, French and Japanese styles for from 250 rubles ($8.90) to 350 rubles ($12.50).
I consider the beefsteak with potato medallions and fried onions (250 rubles, $8.90) one of the best in town. Try it almost raw (with juicy potatoes Idaho, 40 rubles, $1.40) and get the full flavor of the meat. Meat a la Napoli with balsamic vinegar sauce (210 rubles, $7.50) and grilled salmon in spinach sauce with cheese risotto (280 rubles, $10) are also recommended.
For dessert, creme-brulee ice cream ($3.92) could be a good option. If you are into more Asian deserts  try vareniki Ki-Do (120 rubles, $4.20) made from rice dough with a cherry filling. 
All in all, Me100 offers good choices for a good-quality meal, a snack, or a cup of coffee with sweets. It’s a place where East is East and West is West, and the twain do meet.

TITLE: Bat out of hell
AUTHOR: By Manohla Dargis
PUBLISHER: The St. Petersburg Times
TEXT: Near the big-bang finish of “Batman Begins,” the title avenger, played by the charismatic young British actor Christian Bale, scoops up a damsel in distress, played by Katie Holmes, and spirits her away to his lair. Watching this scene, it was hard not to think how nice it would have been if Batman had instead dispatched the infernally perky actress, whose recent off-screen antics have threatened to eclipse this unexpectedly good movie. As it happens, the most memorable rescue mission in “Batman Begins” isn’t engineered by the caped crusader, but by the film’s director, Christopher Nolan. 
“Batman Begins” is the seventh live-action film to take on the comic-book legend and the first to usher it into the kingdom of movie myth. Conceived in the shadow of American pop rather than in its bright light, this tense, effective iteration of Bob Kane’s original comic book owes its power and pleasures to a director who takes his material seriously and to a star who shoulders that seriousness with ease. Until now, Bale, who cut his teeth working with Steven Spielberg on “Empire of the Sun” almost two decades ago, has been best known for his scarily plausible performance in “American Psycho,” an intellectual horror movie that now seems like a prelude to this one: think American Psycho redux, this time in tights. 
As sleek as a panther, with cheekbones that look sharp enough to give even an ardent lover pause, Bale makes a superbly menacing avenger. His Batman is leagues away from Adam West’s cartoony persona, which lumbered across American television screens in the mid- and late-60s with zap and pow, but never an ounce of real wow. Bale even improves on Michael Keaton, who donned Batman’s cape both in Tim Burton’s 1989 “Batman” and its funhouse sequel three years later, and gave the character a jolt of menace. What Keaton couldn’t bring to the role, and what Bale conveys effortlessly, is Bruce Wayne’s air of casual entitlement, the aristocratic hauteur that is the necessary complement of Batman’s obsessive megalomania. 
What Nolan gets, and gets better than any other previous director, is that without Bruce Wayne, Batman is just a rich wacko with illusions of grandeur and a terrific pair of support hose. Without his suave alter ego, this weird bat man is a superhero without humanity, an avenger without a conscience, an id without a superego. Which is why, working from his and David Goyer’s very fine screenplay, Nolan more or less begins at the beginning, taking Batman back to his original trauma and the death of his parents. With narrative economy and tangible feeling, he stages that terrible, defining moment when young Wayne watched a criminal shoot his parents to death in a Gotham City alley, thereby setting into motion his long, strange journey into the self. 
The story opens with the adult Bruce in the middle of that journey, in the far reaches of Asia, where he first rubs shoulders with “the criminal fraternity,” then a clandestine brotherhood called the League of Shadows. Led by a warrior sensei, Ra’s al Ghul (Ken Watanabe), and his aide, Henri Ducard (Liam Neeson, at his lethal best), the league invites Bruce into its fold, an offer he violently declines. Thereafter, he returns to Gotham City, where he assumes a dual identity as both the city’s wealthiest citizen and its avenging angel. Intrigue ensues involving a crime lord played with brio by Tom Wilkinson, a headshrinker brought to skin-crawling life by Cillian Murphy and the last honest cop in Gotham, James Gordon, given expressive poignancy by a restrained Gary Oldman. 
It’s amazing what an excellent cast, a solid screenplay and a regard for the source material can do for a comic book movie. Unlike Robert Rodriguez, whose faithfulness to Frank Miller’s comic sucked the juice out of “Sin City,” Nolan approaches Batman with respect rather than reverence. It’s obvious that Nolan has made a close study of the Batman legacy, but he owes a specific debt to Miller’s 1980s rethink of the character, which resurrected the Dark Knight side of his identity. Like Miller’s Batman, Nolan’s is tormented by demons both physical and psychological. In an uncertain world, one the director models with an eye to our own, this is a hero caught between justice and vengeance, a desire for peace and the will to power. 
That struggle gives the story its requisite heft, but what makes this “Batman” so enjoyable is how Nolan balances the story’s dark elements with its light, and arranges the familiar genre elements in new, unforeseen ways. Weaned on countless comics and a handful of movies, we may think we know the bat cave like we know the inside of our childhood bedroom. But to watch Bruce Wayne stand in the atmospheric gloom of this new cavern, surrounded by a cloud of swirling bats, is to see the underground refuge for the first time. Likewise the Batmobile, which here resembles a Hummer that looks as if it had been gently flattened by a Bradley tank, then tricked out for some hard street racing with fat tires and gleaming black paint.
As is often the case with movies about toys and boys, “Batman Begins” drags on too long, but even the reflexively Bruckheimer-like finish can’t diminish its charms. Nolan needs to work on his action: Fred Astaire made sure that he was filmed so that you could see the entirety of his body, advice this director should have heeded when shooting his superhero. Still, what makes “Batman Begins” the most successful comic-book adaptation alongside Terry Zwigoff’s “Ghost World” isn’t the noisy set pieces, the nods to “Blade Runner” or the way a child’s keepsake, an Indian arrowhead, echoes the shape of a bat. It’s the way Nolan invites us to watch Bruce Wayne quietly piecing together his Batman identity, to become a secret sharer to a legend, just as we did once upon a time when we read our first comic.

TITLE: Dire dirges
AUTHOR: By Sergey Chernov
PUBLISHER: The St. Petersburg Times
TEXT: Brazzaville, the dark pop band formed by David Brown, once a saxophonist with Beck, has been tightly connected to Russia since it first came here in late 2003. 
The band’s fourth and most recent studio album “Hastings Street” has so far been a Russia-only release, while one of Brown’s most recent songs, “Ugly Babylon,” is actually about Moscow.
Though Brazzaville performed in St. Petersburg in 2003, the band that will come this week will be totally new except for Brown himself. Having moved from Los Angeles to Barcelona, Brown formed the new, “European” Brazzaville with local musicians last year. 
In a telephone interview last week, Brown remembered his St. Petersburg visit, saying that he liked the city but was not happy about his band’s show that took place at Red Club in November 2003. 
“I remember it like yesterday,” said Brown, speaking from his home in Barcelona.
“I liked the city a lot. The people were very nice, and I sort of felt more at ease in St. Petersburg than I ever had in Moscow. It’s kind of a friendlier city, I think. And I met a lot of interesting people there, well-read, sort of intellectual people. I didn’t really like the show we played there very much, but that wasn’t the fault of the people. ... I just didn’t. I think I was in a strange mood or something that night.”
After Brazzaville’s three Russian tours, only one of them including St. Petersburg, the band’s repertoire now includes at least three Russia-related songs.
“Night Train to Moscow,” featured on “Hastings Street” and available from Brazzaville’s web site as a free download, refers to the band’s first trip to St. Petersburg in 2003. It mentions the “Petersburg sun” and “pancakes and mushrooms.” 
The song “Hotel Ukraine” is about the Soviet-era hotel, a “dreary old place,” that the band stayed in during its three visits to Moscow. Available on the Russian version of last year’s compilation “Welcome to Brazzaville,” the song is “all about waking up in the Hotel Ukraina on a cold, gray day and staring out the window at the smokestacks across the Moscow River and feeling completely at peace,” according to Brown’s diary on Brazzaville’s web site.
The most recent addition, “Ugly Babylon,” was inspired by a Russian girl, whom Brown met during Brazzaville’s visit to Moscow in March. That was exactly how she referred to the city. 
“There’s a girl in Moscow named Masha, who was our tour manager, I guess, when we were there last time, and she would always talk about the ‘Ugly Babylon’ in reference to various things, and I wrote a song about it,” he said.
With beautiful melodies and sophisticated arrangements, Brown’s songs are pleasant to the ear but frequently deal with tricky, harsh subjects, if one listens to the lyrics. For instance, “Christmas In East Cirebon,” also from “Welcome to Brazzaville,” starts as an idyllic love story but ends in drug hell. 
“It’s a song I wrote in Indonesia a few years ago,” wrote Brown about the song in a recent e-mail.
“It’s a tragic love song about a young couple who are backpacking around the world together, living a carefree life of sex, drugs and warm climates until the girl discovers heroin. I hope people don’t get bored of me writing stories like these.  I guess I write them because I was a big fan of heroin when I was a kid.  It killed several of my best friends and almost killed me.  It’s a vicious lover!  I don’t recommend it, but I still like to write stories about it sometimes.”
Speaking by phone, he said he traces his songwriting approach to the great American folk tradition. 
“I think there’s a long tradition of that in songwriting, especially in folk songs, where they’ll have a very beautiful melody and a compelling sort of sound to them, but they are tragic stories,” he said.
“I like to sometimes write in that same vein. I think because if you’re writing about a sad subject, and you cloak it in the melodies and chord progressions that are pleasing to listen to, it somehow makes people more open to consider something like that, something difficult.”
Brown did not elaborate about his actual reason for moving to Europe, describing it as a “hunch.” But he sounds happy about his newfound life in Barcelona.
“Barcelona is about as different from L.A. as a city can be.  You don’t have to have a car here.  You’re not surrounded by the entertainment industry. You can really feel that you are in the midst of a very old culture.  Even the young people here are more set in their ways than you would think.  Barcelona seems to be heading towards the apocalypse slightly more slowly than the rest of the world.  It’s also a great city for people like me who like to just walk around, drink coffee and not really do much of anything.  It’s perfect for daydreamers.”
Brown also said that Brazzaville’s current lineup featuring Catalans Richie Alvarez on keyboards and Paco Jordi on guitar and backing vocals, also members of a Spanish band called Holland Park, and U.S. expats Brady Lynch on bass and Ivan Knight on drums, is free from the commercial pressures of working in his hometown.
“Los Angeles is kind of the entertainment business capital of the world,” he said.
“I mean New York and London also, but it’s really… It’s Hollywood, and all the big record labels have offices there, so I think it’s very easy as a musician or a band to forget why you play music.
“Everybody is so focused on trying to succeed in a business sense and financially, and fame-wise that it’s easy to forget the reason you started to play music in the first place, and since moving to Barcelona I feel like the people that I have in my band and to a certain extent everyone involved in music, they play music because they love to play music.
“When you play live, when things go well, something magical happens between the performers and the audience. It makes people forget the pains of their daily lives for a while.
“In Los Angeles that happens as well, but at least personally I found myself forgetting the real reason why I started to play music.”
Brown said working in Barcelona with new musicians has had a positive effect on Brazzaville’s music.
“I think it did change music a little bit,” he said.
“When I formed my band here in Europe, I didn’t want to try to imitate the other band [the original Brazzaville] necessarily. I wanted to try and form a new band here and see what kind of personality it has. It’s a five-piece band instead of a six-piece band, and it doesn’t have horns, it’s more… you know, guitar, bass, drums, keyboards and me, another guitar and vocals. I think it seems a little more like a band and less than like a collection of musicians.”

Brazzaville will perform at Platforma on Friday. www.brazzaville2002.com

TITLE: Bavaria’s jewel
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: Bustling, picturesque and cosmopolitan, Munich is the place where, according to surveys, Germans would most like to live. Once there, you can see why. Munich’s vibrant ambiance is hard to resist.
Despite the glamour and style of this exciting international metropolis, its citizens sometimes refer to the city on the Isar River as Germany’s largest village because of its relaxed, cozy atmosphere.
Tucked away under the northern Alps in the state of Bavaria, Munich is a thriving commercial and business city, housing the headquarters of BMW, Siemens and the European Aeronautic Defense and Space Co. It boasts a hip and diverse arts scene. The capital of Bavaria, one of Germany’s wealthiest regions, Munich enjoys the reputation of the German city with the highest quality of life.
All the highlights of its charming historical center are within walking distance. The best starting point is Marienplatz, a 10-minute walk from the central railway station. The “Bavarian onion” domes of the two towers of the beautiful gothic Frauenkirche (Cathedral of Our Lady) are a city landmark. The towers were added to the 14th-century cathedral in 1525. The interiors are plain as only the walls survived bombing in World War II.
Between Marienplatz and Max-Joseph-Platz lies the Platzl quarter, home to some of the city’s famous restaurants and the HofbrÊuhaus, the most famous beer hall in Europe.
Cheerful, plump, rosy waitresses carry up to eight one-liter beer mugs at once. Loud, roaring voices echo from the ancient arched roof as another group of guests strikes up a new song. 
Launched in 1589, during the reign of Bavarian Duke Wilhelm V, the HofbrÊuhaus still embodies the special atmosphere of Munich as a brewing center.
Munich’s architecture has a tangible Italian feel. The imposing yellow Theatinerkirche, Bavaria’s oldest Italian Baroque church, was founded in 1620 as a gesture of gratitude, after Henriette Adelaide of Savoy gave birth to a long-awaited heir, Crown Prince Max Emmanuel. Dedicated to St. Kajetan, the church was built by two Italian masters Barelli and Zucalli, while its faÍade was adorned in rococo style in 1760, by FranÍois CuvillÎ the Elder. This type of architecture influenced many other churches built in southern Bavaria.
A stroll through Ludwigstrasse, Munich’s great 19th-century avenue, stretching toward the district of Schwabing, plunges you into a Florentine environment. The avenue, nicknamed “our Italian street” by the citizens, is adorned with impressive stately yet somewhat rigid neoclassical and neo-Romanesque buildings. It was designed to express the greatness of the kingdom of Ludwig I.
For the best city view, climb 300 steps to the top of the gothic Alter Sankt Peter, one of the city’s oldest churches, which survived a fire in 1327 and a lightning strike in 1607.
A Munich magazine “Jugend” (youth) gave its name to a new style that swept across Europe in the late 19th century. The city and especially the Schwabing houses have quite a few gems from that era. Architects Helgib and Haiger created a little marvel at 22 Ainmillerstrasse around the turn of the century, which has been described as “a precious stone on a woman’s dress.” The colors, rhythm and golden masks reveal a Venetian influence.
A walk from Theatinerkirche along Ludwigstrasse will take you to the English Gardens, stretching along the banks of the Isar. One of the largest parks in Europe, it was founded in 1789, and covers an impressive 360 hectares. Meant to resemble the traditional English parkland surrounding country estates, the park is abundant with ponds, winding narrow paths and picnic sites.
The three Pinakothekas, located across the street from each other, form a spectacular museum quarter almost opposite the English Gardens, when you cross Ludwigstrasse.
The Alte Pinakothek houses one of the world’s richest art collections, boasting over 800 European paintings of the 14th to 18th centuries. The exquisite display juxtaposes Albrecht Dßrer’s famous 1500 “Self Portrait in Fur Coat”  and his “Four Apostles” with masterpieces by Albert Altdorfer and Lucas Cranach.
The diversity and quality of Munich’s Flemish art collection, which includes works by Rubens, Van Dyck and Jordaens, is stunning. The museum’s holdings also feature the “Canigani Holy Family,” which was the first painting by Raphael to be brought to Germany. The Alte Pinakothek also boasts masterpieces by Titian and Tintoretto, Rembrandt, Frans Hals, Murillo, Velasquez, Chardin and Boucher.
The 19th century works are displayed in the Neue Pinakothek, the most important museum of art of that period in the world. It offers an overview of European art from classicism to art nouveau, while the 20th century and contemporary art can be explored in the Pinakothek der Moderne.
Admirers of Kandinsky are recommended to make a detour to Lenbach House, located in a sumptuous Florentine villa and containing the most representative collection of the artist’s work, which allows Kandinsky’s evolution to be traced. The museum also displays a marvelous collection of modern art, featuring works by Klee and Macke.
Munich is most crowded in October, during the Oktoberfest, when the Theresienwiese hosts hundreds of tents offering all imaginable sorts of beer. In 2004, the 5.9 million guests of the festival consumed 61.163 hectoliters of the golden liquid, not including non-alcoholic beverages. The beer was accompanied by 179,889 pairs of pork sausages, 481,649 chicken pieces and 56,0089 pork knuckles, 33,358 liters of wine and 24,952 bottles of sparkling wine.
The next Oktoberfest takes place from Sept. 17 until Oct. 3.
The history of the Oktoberfest dates back to Oct. 12, 1810, when Crown Prince Ludwig, later to become King Ludwig I, was getting married to Princess Therese of Saxony-Hildburghausen. The citizens of Munich were invited to attend the festivities held on the fields in front of the city gates to celebrate the happy event. The fields were named after the princess. The citizens, however, have since abbreviated the name simply to the “Wies’n.”
A short ride on tram 17 will take you to Schloss Nymphenburg, the grandest baroque palace in Germany. Located in the western outskirts of Munich, the palace was built in 1674 by Agostino Barelli. The summer residence celebrates the birth of a son and heir to Elector Ferdinand Maria and Henriette Adelaide of Savoy.
Schloss Nymphenburg is famous for its gorgeous exterior, marvelous park and the Gallery of Beauties. This room in the middle of the palace houses 36 portraits of admirable women of various nationalities and social status. All models were selected by Ludwig I, who was a great admirer of beauty, and painted by Joseph Stieler. Not all of them were Ludwig’s lovers. Don’t miss the portrait of the dancer, Lola Montez, whose charms provoked Ludwig I’s eventual downfall and abdication in 1848.
The palace also boasts an exciting collection of carriages and coaches in a Royal Stables Museum that Cinderella would envy.

TITLE: Blair Challenges EU on Economic Reform
PUBLISHER: Reuters
TEXT: BRUSSELS — British Prime Minister Tony Blair challenged the European Union on Thursday to renew itself through economic reform to meet the challenges of the global age, saying the bloc’s constitutional and budget crisis was an opportunity for change. 
Blair told the European Parliament in a fighting speech setting out Britain’s priorities for its six-month presidency of the bloc from July 1 that it was wrong to describe the choice as being between political union and a mere free trade area. 
The EU was facing a crisis of political leadership that made it hard to win voter support for the EU’s troubled constitution in most of its 25 countries, he said. 
German Chancellor Gerhard Schroeder and outgoing EU president Jean-Claude Juncker of Luxembourg have said a deeper rift over what the EU should be was at the heart of the clash that prevented a summit last week agreeing a long-term budget for the 25-nation bloc. 
“Now almost 50 years on, we have to renew and there is no shame in that. All institutions must do it and we can, but only if we re-marry the European ideals we believe in with the modern world we live in,” Blair said. 
“The issue is not between a free-market Europe and a social Europe, between those who want to retreat to a common market and those who believe in Europe as a political project,” he said. 
“This is not just a misrepresentation. It is to intimidate those who want to change Europe by representing the desire for change as a betrayal of the European ideal.” 
The British leader was both heckled and applauded when he told EU lawmakers “I am a passionate pro-European” in an atmosphere reminiscent of the rough-and-tumble of the British parliament rather than the more staid courtesy of Brussels. 
The EU urgently needed economic reform to rekindle growth and must gradually reduce the share of its budget it spends on farm subsidies, Blair said. 
“The reality is that ... to secure a “Yes” vote in a referendum in most member states is difficult,” he said, arguing that electorates were alienated by economic failure and a refusal to hold a “real debate” on making Europe work better. 
Serious progress on structural economic reform would build public support for a sensible, rational fiscal policy. 
“And we need such reform urgently in Europe, if Europe is to grow,” Blair said. 
He insisted he was not seeking to scrap EU farm subsidies overnight but to reduce them gradually after the failure to agree a long-term EU budget last week but, “A modern budget for Europe is not one that, 10 years from now, is still spending 40 percent of its money on the Common Agricultual Policy.”

TITLE: Klansman Found Guilty
PUBLISHER: Reuters
TEXT: PHILADELPHIA, Mississippi — Accused Ku Klux Klansman Edgar Ray Killen was found guilty of manslaughter Tuesday in the 1964 killings of three civil rights workers, a case that outraged much of the country and energized the civil rights movement. 
Killen, 80, had been portrayed by prosecutors as a Ku Klux Klan leader who recruited a mob to kill Michael Schwerner, Andrew Goodman and James Chaney exactly 41 years ago, on June 21, 1964. The killings in Neshoba County were dramatized in the 1988 movie “Mississippi Burning.” 
The jury found Killen guilty on three counts of felony manslaughter but not guilty of the more serious charge of murder. 
Circuit Judge Marcus Gordon ordered him held at the Neshoba County Sheriff’s office pending sentencing on Thursday. Killen, who faces up to 20 years in prison, showed no visible emotion as the verdict was read. He had an oxygen tube in his nose and bailiffs wheeled him away in the wheel chair he has used since breaking both legs in a logging accident in March. 
The trial evoked memories of the violent racial conflicts of four decades ago.

TITLE: CO2 Emissions Rose in 15 EU Countries in 2003
PUBLISHER: Reuters
TEXT: BRUSSELS — A cold winter and increased coal-burning power production raised carbon dioxide emissions in 15 EU states by 1.8 percent between 2002 and 2003, the EU environment agency said Tuesday. 
The European Environment Agency said an extra 59 million metric tons of CO2, which represents 80 percent of all EU emissions, were released into the atmosphere in the 15 EU states, measured before its expansion to 25 states in 2004. 
The EU has agreed to cut total greenhouse gas emissions by 8 percent of their 1990 levels by 2012 to fight global warming as part of the Kyoto treaty. 
Green group Friends of the Earth said the figures showed the bloc was far behind in meeting its target and emissions should have dropped by 5.2 percent in 2003 compared to 1990 for western Europe to be on track. 
“The new figures are shocking, as they indicate that Europe will most likely not meet its obligation to limit dangerous climate change,” said FOE Europe’s Jan Kowalzig in a statement. 
“The blame goes mostly to national economy and industry ministers, who constantly block any attempts to introduce mandatory targets for renewable energies, energy efficiency rules or fuel consumption standards for cars,” he added. 
CO2 emissions have risen by 3.4 percent since 1990 according to the EEA figures. 
The worst offenders are Austria, Denmark, Ireland, Portugal and Spain. Under Kyoto, Austria is supposed to cut its greenhouse gas emissions by 13 percent between 1990 and 2012. Its emissions jumped 16.6 percent in 2002 compared 1990.

TITLE: Former SS Members Convicted
AUTHOR: By Alessandra Rizzo
PUBLISHER: The Associated Press
TEXT: ROME — Ten former members of the Nazi SS were convicted Wednesday of taking part in the 1944 massacre of more than 500 villagers in northern Italy and sentenced to life in prison. 
The defendants, all German men in their 80s, were tried in absentia in the Italian town of La Spezia. The men are believed to be in Germany. 
“After 61 years justice was done,” Michele Sillicani, mayor of the Tuscan village of Sant’Anna di Stazzema, where the slaughter occurred, told the Italian news agency ANSA. 
“We did not want revenge, only justice,’’ he was quoted as saying. “It was a premeditated massacre.’’ 
Luigi Trucco, a lawyer for two of the defendants, said the judges’ verdict would likely be appealed. Trucco said “the judges evidently accepted the prosecutors’ argument that [the defendants] all knew and were all present.” 
Prosecutors had requested life sentences for the defendants, who were charged with premeditated murder. 
In August 1944, about 300 SS troops surrounded Sant’Anna, which had been flooded with refugees, ostensibly to hunt for partisans. Instead, they rounded up and shot villagers, according to survivors. Others were herded into enclosed areas such as basements and killed with hand grenades. 
Historical documents are not clear on precisely how many people were killed, but the most commonly cited number is 560. Many were children, women and elderly people. 
In August, German Interior Minister Otto Schily joined a commemoration in Sant’Anna marking the 60th anniversary of the massacre, calling the village a “place of shame” for his nation. 
The slaughter was one of the worst in a series of atrocities by Nazi troops in central and northern Italy during World War II. Italian authorities began investigating the massacre a few years ago when officials found reports on the killings drawn up by Allied forces at the end of the war. 
“My thoughts turn to all the victims’ families that had to wait for so many years,’’ Prosecutor Marco De Paolis told ANSA. 
De Paolis told the judges that the defendants chose to participate in the killings and were not just following orders, ANSA reported. He said that since the 16th Panzagrenadier Division had suffered heavy losses before the massacre, soldiers were acting above their rank, and that no witness had cited cases of soldiers being punished for disobeying orders. 
In his closing remarks, Trucco said the prosecutor’s arguments were ``based on abstractions and suggestions,’’ ANSA reported.

TITLE: Safin’s Mood Brightens With Win Against Former Finalist
PUBLISHER: Reuters
TEXT: WIMBLEDON, England — Marat Safin’s new love affair with grass blossomed in the Wimbledon sunshine on Wednesday as the Russian bludgeoned past former finalist Mark Philippoussis. 
His 7-6 7-6 6-4 victory kept him on course for a quarterfinal meeting with Australian Lleyton Hewitt after the 2002 champion saw off Czech Jan Hernych 6-2 7-5 3-6 6-3. 
World No.1 Roger Federer remains the man to beat, however, and the Swiss world number one swatted aside Czech Ivo Minar 6-4 6-4 6-1 in 82 stress-free minutes. 
Top seed Federer, aiming for a third successive Wimbledon title, extended his winning streak on grass to 31 to book a third-round meeting with Germany’s Nicolas Kiefer. 
In the women’s draw Kim Clijsters and world No. 1 Lindsay Davenport stayed on collision course for a fourth round slug-fest while French third seed Amelie Mauresmo also joined them in the third round. 
Safin, the once self-confessed hater of Wimbledon’s treacherous green lawns, survived three set points in the opening set of a sledgehammer duel against injury-prone wildcard Philippoussis, now ranked 142 in the world. 
From that moment on the burly Australian Open champion, beaten by Federer in the final at Halle last week, caught fire on a sun-bathed Center Court, sealing victory with his 20th booming ace. 
“I couldn’t feel comfortable on this surface before I played at Halle,” said the 25-year-old Safin, who faces dangerous Spaniard Felicano Lopez in the third round. 
“It’s really important to have fun on grass and all of a sudden it came to me and I feel pretty good. I don’t know how to explain it.” 

NOT SATISFIED 
Federer, who faces Nicolas Kiefer in the third round, was never seriously tested against the 99th-ranked Minar, appearing in the main draw at Wimbledon for the first time. 
The Swiss machine was not totally satisfied with his performance, however, and predicted that Safin, who beat him in the semifinals of the Australian Open, is a danger. 
“When I had some openings I could have done better,” said the 23-year-old. “But I thought I played alright. 
“[Safin’s] got a big game, he hasn’t showed what he can do on grass yet, but maybe it’s a good year for him.” 
Belgian former world No. 1 Clijsters, lurking dangerously as the 15th seed, needed just 44 minutes to scorch past American Marissa Irvin 6-1 6-1. 
Looking toned and bronzed she belted forehands and backhands past her dazed opponent, who was given a tennis masterclass. 
“I’ll give myself eight out of 10 for that today,” said Clijsters who next faces Italian Roberta Vinci. 
“This is the best I’ve felt for a long time. Today I felt for the first time that the puzzle fitted.” 
Davenport, champion in 1999, showed little mercy as she demolished fellow American Jamea Jackson 6-0 6-3, trampling through a lop-sided first set in 17 minutes. 
“I know my chances are getting smaller and smaller, but I would like to get one more under my belt before it’s all said and done,” said the 29-year-old. 
Third seed Amelie Mauresmo also made impressive progress, despatching Spain’s Maria Sanchez-Lorenzo 6-1 6-3. 
“I played a great match, there’s not much more to say about it,” said the 25-year-old Mauresmo, who plays American Shenay Perry in the next round. 

PERSONAL PROBLEMS 
There was no easy ride for ninth seed Anastasia Myskina, who went through her full repertoire of on-court theatrics during a 6-4 6-3 defeat of Aiko Nakamura. 
The 23-year-old Muscovite who has been beset by personal problems and poor results this year, stewed, fretted and ranted at the umpire during an edgy 6-4 6-3 victory over 94th-ranked Nakamura on another baking hot day. 
Sixth seed Yelena Dementyeva, twice a grand slam finalist last year, almost came unstuck, eventually sqeezing past German qualifier Sabine Klaschka 2-6 6-3 8-6. 
In an all-French battle held over from Tuesday, men’s ninth seed Sebastien Grosjean, a semi-finalist the previous two years, reeled off the three games he needed to win 3-6 7-5 4-6 7-6 6-4.

TITLE: Kuznetsova Defeats Indian Star
AUTHOR: By Krystyna Rudzki
PUBLISHER: The Associated Press
TEXT: WIMBLEDON, England — U.S. Open champion Svetlana Kuznetsova felt the pressure of playing on Center Court, and it almost cost her a trip to the third round at Wimbledon. 
The St. Petersburg native overcame her anxiety Wednesday to beat 18-year-old Sania Mirza of India 6-4 6-7 (4) 6-4 in the second round. 
“It wasn’t my day at all,” the fifth-seeded Kuznetsova said. “I couldn’t move. I was so tense that my nerves just got me today. I just couldn’t think properly. 
“I was looking like maybe a duck out on the court today because I was silly, even embarrassed for my game because I just can’t imagine how I could play that way.” 
Both played erratically throughout, mixing errant forehands, poor returning and racket throwing with impressive net play and winners down the line. 
Kuznetsova made 30 unforced errors and was broken six times, but the problem appeared to be her first Center Court appearance. 
“I was very surprised when I saw the schedule,” Kuznetsova said. “All the pressure was on me. She had nothing to lose.”
Mirza, who has become a star in India since reaching the third round of the Australian Open this year, broke Kuznetsova in the opening game, saved two break points in the fourth game, then broke the Russian and held serve to take a 4-2 lead. She then double-faulted to allow Kuznetsova to break to 4-4 and the Russian held her serve and broke again to take the set. 
Kuznetsova came from 3-0 down in the second set to force a tiebreaker. Both players broke each other twice and traded minibreaks in the tiebreaker, which Mirza finally won when Kuznetsova returned long. 
Mirza threw her racket on the grass in frustration after giving Kuznetsova a break point in third game of the final set and was given a warning by the umpire. Kuznetsova broke to take a 2-1 lead and again to take a 5-2 lead. She could have then served out the match, but Mirza broke her and held to make it 5-4. 
Kuznetsova erased a break point with a diving volley at the net before securing the match when Mirza couldn’t return serve. The players received a standing ovation when they left the court. 
Mirza is the first Indian woman to reach the third round at a Grand Slam, losing to eventual champion Serena Williams in Melbourne in January. 
A month later, she won her first WTA title in Hyderabad, India, and later beat Kuznetsova in Dubai, United Arab Emirates. 
Kuznetsova, who turns 20 on Monday, lost in the first round of Wimbledon last year, but went on to win the U.S. Open title. She made the Wimbledon quarterfinals in 2003 — beating last year’s champion Maria Sharapova, then a wild card, and losing to Justine Henin-Hardenne. 
At the French Open, Kuznetsova wasted two match points against Henin-Hardenne, the eventual champion, in the fourth round. 
Unlike Kuznetsova, Mirza relished the Center Court atmosphere, but admitted she was nervous. 
“First time Wimbledon, playing on Center Court, I loved it,” she said. “I wasn’t scared of who I was playing or what I was playing. I was just scared that I was playing on Center at Wimbledon, second round.”

TITLE: sports watch
TEXT: Jagr Regrets Lockout
PRAGUE, Czech Republic (AP) — New York Rangers forward Jaromir Jagr said Tuesday that players’ initial refusal of a salary cap in talks with the NHL was a gamble that did not work out. 
“We started the fight because we didn’t agree with the introduction of salary caps,” Jagr said. “Now, we’ll be happy to get them. We didn’t expect the owners to be so tough and persistent. It was a risk that didn’t pay off.” 
Jagr was quoted, in Czech, on the Czech Ice Hockey Association’s web site. 
The NHL and the players’ association recently agreed that a salary cap model with an upper and lower limit will be the centerpiece of a new agreement. 
The lockout started last September and wiped out the entire 2004-05 NHL season. 

Davydenko Injured
LONDON (Reuters) — Russian eighth seed Nikolay Davydenko retired injured from his second-round match against Sweden’s Jonas Bjorkman at Wimbledon on Wednesday. 
Right-hander Davydenko was leading 7-6 2-1 on Court Two when he decided to quit after receiving treatment on his right wrist. 
The 24-year-old had reached the second round of the grasscourt grand slam for the first time. 
Bjorkman, the 33-year-old ranked 97 in the world, will play either Frenchman Jean-Rene Lisnard or another Russian, Mikhail Youzhny, in round three. 

Lions Touts Thwarted
CHRISTCHURCH, New Zealand (Reuters) — Touts are finding it hard to sell their tickets for Saturday’s first test between the All Blacks and the British and Irish Lions. 
The match in Christchurch is sold out and tickets had been reaching two or three times their face value on New Zealand internet auction sites, according to the New Zealand Press Association. 
However, in the last two weeks prices have steadily dropped and of the 53 sellers registered with a popular internet auction site on Thursday, only 17 had active bids, with many offering to sell the tickets at face value. 
One seller was offering a ticket with a supposed face value of 250 New Zealand dollars ($177) for $107. The most popular auction had attracted 65 bids for two tickets for $336. 
While the New Zealand Rugby Union has banned the resale of tickets, touts were hoping to circumvent the policy by offering a street map of Christchurch or a can of soft drink for sale with the tickets thrown in for free. 

Lance Names Team
AUSTIN, Texas (AP) — Lance Armstrong will have most of last year’s team back when he goes for his seventh straight Tour de France victory. 
But the team is missing Vyacheslav Yekimov, the Olympic champion from Vyborg north of St. Petersburg, who rode with Armstrong to five Tour victories but injured his back in a training accident in April.
Armstrong’s Discovery Channel team features six returning cyclists, including American George Hincapie, and two new ones, Italy’s Paolo Savoldelli and Ukrainian Yaroslav Popovych, it was announced Wednesday. 
Armstrong, 33, said he will retire after this year’s Tour, which starts July 2. 

Chelsea To Play Wigan
n LONDON (Reuters) — Chelsea kick off the defence of their Premier League title at promoted Wigan Athletic on the opening day of the 2005/6 season on August 13.

TITLE: Sharapova Easily Kicks Out 15-Year-Old 
PUBLISHER: Combined Reports
TEXT: WIMBLEDON, England — Maria Sharapova sharpened her claws at Wimbledon on Thursday, thrashing precocious young upstart Sesil Karatantcheva 6-0 6-1 in the second round. 
There was some tetchy history, and many similarities, between the 18-year-old defending champion and the Bulgarian, who does not celebrate her 16th birthday until next month. 
In suffocating heat on Court One, however, what initially looked like a good old-fashioned cat fight fizzled out into a minor tiff, settled emphatically in 46 minutes. 
Both players are products of Nick Bollettieri’s Florida production line, with games that bare a close resemblance, the emphasis very much on thrashing the felt off tennis balls. 
Unfortunately for Karatantcheva, who stunned Venus Williams on her way to the French Open quarterfinals earlier this month, the court was not big enough to accommodate her wild strokes. 
Initially her thunderbolt forehand seemed to unsettle Sharapova and the second seed was taken to three deuces in a first service game that had the line judges ducking for cover. 
Karatantcheva’s first service game also went to deuce, but once she swashed a limp forehand into the net to hand Sharapova a 2-0 lead, the match quickly ran away from her. 
The Sofia-born Karatantcheva lacks nothing for confidence. 
Before playing Sharapova in Miami last year she promised to “kick her arse” — a comment that came back to haunt the Bulgarian on Thursday as her game was blown to pieces. 
She had a break point at 0-4 in the first set, but after looping another forehand beyond the baseline, her resolve melted away. Sharapova was not about to show any sympathy. 
Striding gracefully round the court, Sharapova despatched backhands and forehands past her overwhelmed opponent, or simply waited for the inevitable error. 
The Russian, not known for her prowess at the net, even swatted away a couple of delicious drive volleys as her confidence soared with the temperature. 
Looking like a little girl lost on the big stage, Karatantcheva finally registered on the scoreboard in the 10th game, but it was only a brief respite. 
Three games later, after a whirl of Sharapova winners, Karatantcheva was heading back to the safety of the locker room to lick her wounds and contemplate the wisdom of crossing the queen of Wimbledon. 
Sharapova, seeded second, has lost only five games in two rounds. Joining her in the final 32 was Elena Daniilidou, who defeated Laura Granville 6-2 6-0. Daniilidou upset French Open champion Justine Henin-Hardenne in the first round. 
No. 16 Nathalie Dechy beat wild card Jane O’Donoghue 6-2 6-2, eliminating the last British woman in the tournament. 
Dechy, a semifinalist at this year’s Australian Open, was ruthlessly efficient in despatching O’Donoghue in just 57 minutes to take her place in the third round. 
Last year, four British women reached the second round, the first time such a feat had been achieved in 15 years. This year, O’Donoghue was the sole survivor, and not for long. 
In two woefully one-sided sets, O’Donoghue was no match for Dechy’s speed, accuracy and power across the court. 
Twentieth seed Daniela Hantuchova defeated Shahar Peer 6-2 2-6 6-3. 
Other seeded players to lose were No. 29 Marion Bartoli and No. 32 Virginie Razzano. Bartoli was beaten by American Jill Craybas 6-1 6-4. Razzano lost to Cara Black 6-4 7-6. 

TITLE: F1 Fiasco Could Cost A Fortune
TEXT: LONDON — Angry United States fans are threatening Formula One chiefs with multi-million dollar lawsuits over Sunday’s Grand Prix in Indianapolis when only six cars raced.
ITV television has also disclosed it is in talks with Bernie Ecclestone, Formula One’s promoter, over the repercussions of a race which seven teams boycotted over the safety of their tires. 
Some American fans are known to have gone to the courts to take out class actions against Formula One, Michelin, the tire supplier at the center of the row, and the Indianapolis circuit owners. 
Some television stations cancelled their coverage of the Grand Prix when they realized it had descended into farce.
Britain’s ITV broadcast the “race” and Mark Sharman, ITV’s controller of sport, said the station was in talks with Ecclestone.
“Obviously, ITV is extremely disappointed that a major sports event can be ruined like this,” Sharman said.
“We are discussing the weekend’s events and the repercussions with Formula One management.” 
Indianapolis Motor Speedway management was deciding what action to take. It could include a lawsuit against Ecclestone’s Formula One Management (FOM) or the cancellation of a contract for the 2006 race.
Organizers might sue Ecclestone for the $13.5 million it cost to stage the event.
The FIA has hinted that the way out of the deadlock would be for the seven teams, plus Michelin, to reimburse the 160,000 spectators who attended the race, a gesture that would cost around $16 million.
In Britain, the chaos affected betting shops, where thousands of punters were refused refunds after betting on Michelin runners who did not compete, particularly Fernando Alonso, the championship leader, and Kimi Raikkonen, his main rival.
There was was a flood of money for Michael Schumacher, the winner, and drivers with Minardi and Jordan as word got out that a boycott was in prospect and only three teams would run.
Tiago Monteiro was a 2,000 to 1 long shot who came good with his third place for Jordan and many punters picked up winnings from the first Portuguese driver to get on to a Formula One podium, The Times reported.
Leading bookmakers, such as William Hill and Ladbrokes, decided to stick to the Formula One rule that cars that take part in the parade lap had started the race, which meant that thousands who backed Raikkonen and Alonso lost their money.
Other bookmakers declared the race null and void and handed back bets.
A spokesman for Ladbrokes said: “It is complete confusion. We have had to stick to the rules, but the industry has lost a lot of money on this one. It will go further, I am sure of that.” 
The betting industry could line up behind Europe’s leading television companies to complain to Ecclestone and the FIA, the sport’s governing body.
The seven teams who failed to take part face losing constructors’ world championship points or punitive fines when they appear before the FIA world motorsport council next Wednesday.

TITLE: Boston Red Sox Continue Series in Comeback Mode
PUBLISHER: The Associated Press
TEXT: The Boston Red Sox are following baseball’s greatest comeback with some more moderate rallies. 
Edgar Renteria’s RBI double in the ninth inning Wednesday night gave Boston a 5-4 comeback victory over Cleveland and a sweep of their three-game series. It was the fourth straight win for the Red Sox and their ninth in 10 games. 
The comeback win was the 20th of the season for the Red Sox, who overcame a 3-0 series deficit in the American League playoffs last season to beat the New York Yankees in seven games. They went on to sweep St. Louis in the World Series, their first title since 1918. 
Boston, which trailed 4-2 in the eighth, just doesn’t seem to get rattled when it’s trailing. 
“We play calmly out there,” outfielder Johnny Damon said. “We’ve been through pressure before. We’ve dealt with it. We don’t let it bother us too much.” 
Boston (41-30) is 11 games over .500 for the first time this season. 
“We’re right where we need to be,” Damon said. 
In other American League games, it was: Tampa Bay 5, New York 3; Chicago 5, Kansas City 1; Toronto 3, Baltimore 2; Detroit 8, Minnesota 1; Los Angeles 6, Texas 0; and Seattle 5, Oakland 4 in 12 innings. 
Renteria and John Olerud hit solo homers for Boston. Keith Foulke (5-3) pitched 1 1-3 scoreless innings to get the win. 
Jay Payton doubled to open the ninth off closer Bob Wickman (0-2) and went to third when center fielder Grady Sizemore bobbled the ball on the warning track for an error. 
Renteria followed with his double and the Red Sox hung on to improve to 11-7 in one-run games. 
“We did some really good things to win,” Red Sox manager Terry Francona said. “That’s a loseable game.”
Casey Blake had three hits and an RBI single for Cleveland, which came into the series riding a nine-game winning streak. 
“We were trying to keep this thing rolling,” Wickman said, “and we didn’t get the job done.”