SOURCE: The St. Petersburg Times
DATE: Issue #1183 (49), Tuesday, July 4, 2006
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TITLE: Antiglobalists Struggle To Attend G8
AUTHOR: By Liza Hearon
PUBLISHER: Special to The St. Petersburg Times
TEXT: Scenes of thousands of people taking to the streets in violent protest, like those at the 1999 WTO meeting in Seattle, are unlikely to be repeated at the G8 summit taking place on July 15-17 in St. Petersburg, according to antiglobalization activists.
The expense of visas and travel to Russia, along with fear of the police, are keeping many foreign protesters at home, activists groups say. 
While activists are planning demonstrations in Russia, they are divided on what is the most effective course of action, lack central coordination, and are unsure of just how many protesters will show up.
Antiglobalists, anticapitalists and anarchists are also wary of the media and police associating them with nationalist groups, who may be planning their own protest actions during the G8 meeting.
Most groups want to express their views on the G8’s handling of energy security and infectious diseases, two of the main topics of the meeting.
“It’s difficult for most people to imagine coming to Russia — the idea scares them,” said Anya, an activist from Poland in her 20s who is traveling to St. Petersburg, in a telephone interview. Her last name has been withheld because of her fears of the border police. “Russia has a bad reputation in terms of human rights, jails and prisons.”
Despite the fears, a small group from Poland is making the trip, along with a few dozen from England, Germany and other European countries, according to Anya.
“Again, we’re talking about a dozen, not talking about hundreds,” she said.
“We’re more than convinced that they’ve planned security in St. Petersburg — they might not be worried about a few guests,” Anya said.
As yet, however, no foreign activists have reported any trouble obtaining visas or difficulty at the border, as they begin making their way to Russia. Some are heading to Moscow first, some are coming by bus, and some are even coming by bicycle. 
A bicycle caravan left Berlin on Sunday and plans to reach St. Petersburg in time for the G8 meeting. Along the way, they are meeting with local activists and handing out literature. 
It started with 15 people leaving Berlin, and people are coming and going along the way, said 20-year-old Nao, who believes in “alternative faiths” and chooses that name for himself, in a telephone interview. The caravan was stopped in northeast Poland.
“We promote clean energy transport — going by bike — even distances like 1,800 kilometers in five weeks,” he said. 
The caravan is made up mostly of 18- to 30-year-olds from Germany, Lithuania, the U.S. and other countries. They are bringing tents with them, and are also staying with “nice people” along the way, said Nao.
Nao said he personally does not plan to go all the way to St. Petersburg because of the expense of paying for a visa. The group has already experienced border troubles.
“The Turkish people couldn’t go through the Polish border,” he said.
Even activists who can’t make it to St. Petersburg are supporting those who are traveling, organizing protests in their own countries and planning for the G8 meeting in 2007, which will be held in Heiligendamm, Germany, a more accessible country. They have already organized camps and meetings to prepare actions against the 2007 meeting. 
“We have had various meetings in different cities to tell them about the G8,” said Manfred Schuster, 37, in a telephone interview from the Network Against G8 office in Berlin. “We are not to prepare people, but to give them information for them to prepare.”
“People are worried, but they are saying that it can’t be worse than [the G8 summit in] Genoa, where they killed one protester,” Schuster said.
He describes his organization as being in favor of radical globalization, not antiglobalization. 
“We want to have open borders for refugees, not money,” Schuster said.
Groups outside of Russia are organizing for a global day of protest against the G8, on July 14. The idea was conceived at a meeting in Kiev, where activists from Russia and Western Europe were able to meet in a place where visas are not required, said Zhenya Oregon, 27, an activist in St. Petersburg.
“We are not sure how many people will be there. We try to cooperate with Western European people coming, and we hope that some of them will reach the city. It will be a new experience for us,” said Oregon.
He described the St. Petersburg group as “not very energetic” but well-connected to Moscow. St. Petersburg activists also have contacts in Belarus, where protesters plan to rent a bus to Russia, and are connected with groups in Ukraine, Lithuania and Estonia, according to Oregon.
But no one is sure how these disparate groups will unify.
The Russian Social Forum is set to meet at Kirov Stadium, an arena at the far end of Krestovsky Island largely inaccessible from central St. Petersburg, for the dates of the G8 summit. Various anticapitalist and antiglobalist groups will meet to discuss their views.
“As a network, as a whole, we have different opinions on the social forum,” said Oregon.
They object to what they see as the participation of political parties in the forum, such as the Regional Communist Party and the National Bolshevik Party. 
Organizers of the forum have stated that no parties will participate in the forum, but parties will be allowed to participate in a demonstration on July 15. 
The demonstration has been authorized by the authorities and is tentatively set as a march from Kirov Stadium to the Aurora cruise ship which is moored on the Petrograd Side on the Bolshaya Nevka, an offshoot of the Neva, cut off by several bridges from downtown. 
Demonstrations are not permitted any closer to the center of the city. However, anarchists and antiglobalists are still concerned about nationalist groups participating or disrupting the action.
“The solution is autonomous actions. It is up to groups to decide what they are doing; some will probably make decentralized actions,” said Oregon.
Despite scarce resources, the group has arranged a legal team to assist demonstrators with arrests and street medics in case it turns violent. They have prepared information on legal rights against police.
The lack of central coordination has made it difficult to guess how many protesters will come from other countries, and how many will be involved in protests.
“I hope in St. Petersburg we mobilize 100 to 150 persons,” Oregon said. “If we mobilize 500 people, I would consider that a success.”
Organizers of the Social Forum are expecting different numbers. Ilya Ponomarev, 30, who represents the Left Front Coalition in Moscow, said he expects 1,000 to 1,500 people participating in the Social Forum  and 4,000 to 5,000 to take part in the demonstration, including 300 to 400 from abroad.
“But it’s very unpredictable because of the visas and people being scared of the Russian police. We expect the largest part from France, Germany and Scandinavia,” Ponomarev said.
They are expecting the city to be closed, like it was during the 300th anniversary celebration of St. Petersburg, and for the police to be questioning people.
“Getting our voice heard is our major objective. We are not a violent organization. But if authorities put pressure on us, we will fight back,” Ponomarev said.

TITLE: EU Aims for 2007 Start to Russia Trade Talks
PUBLISHER: The Associated Press
TEXT: HELSINKI — The European Union said Monday it would seek to launch talks with Russia later this year on forging closer political and economic ties, including a possible free trade pact.
The move, to offer Moscow open access to the EU’s market, was seen as an overture by the EU to sway Russia in offering long-term guarantees of secure energy supplies for western Europe.
Finnish Prime Minister Matti Vanhanen, whose country holds the EU presidency, said he hoped all 25 EU governments will approve a negotiating mandate on a new EU-Russia accord to replace the existing so-called partnership and cooperation agreement before the end of the year.
“Our aim is that in November when we have this EU-Russia summit, we should make a decision to start the negotiations,” Vanhanen told reporters after talks with the EU’s executive arm, under European Commission President Jose Manuel Barroso.
“We believe from a strategic point of view ... we should work toward a free trade area with Russia,” Barroso said. “Russia is a European country and I think it would be in the interest of both parties to have this free trade area. That is why we are asking member states if they are ready to go this way.”
Barroso said the offer of a free trade pact was conditional on Russia joining the World Trade Organization, adding it was too soon to think of a “precise timing” for any free-trade agreement.
Russia’s WTO membership talks have been slowed by disagreement with the United States over rules governing access for foreign financial services companies and Russia’s enforcement of intellectual property rights.
Moscow has been negotiating to join the 149-member global commerce body since 1994.
EU trade spokesman Peter Power said the EU free trade offer was a long-term goal, adding that the EU also still had problems with Russia’s WTO application over its refusal to allow European airlines rights to fly over Siberia.
The Commission said it seeks a “more ambitious” partnership with Moscow, one that touches on closer cooperation in a wide range of issues including human rights, fighting crime and terrorism, immigration and foreign policy.
Key to a new EU-Russia accord is better cooperation in energy.
“It is of great importance that the mutual interest we have in energy cooperation should be expressed in concrete terms in the new agreement,” EU External Relations Commissioner Benita Ferrero-Waldner said.
Most EU nations remain heavily dependent on natural gas imports from Russia. A pipeline dispute between Ukraine and Russia last winter caused shortages of energy supplies in many EU nations and led to calls for closer energy ties with Moscow.
Russia and energy are top priorities for Finland, which borders Russia.
Vanhanen has invited Russian President Vladimir Putin to a special EU leaders summit in October to discuss energy and forging closer ties.
Officials hope that after those talks, negotiations on a new EU-Russia pact can start in 2007, after EU governments approve the mandate.
The existing partnership and cooperation accord, signed 10 years ago, runs out next year.
It has led to closer practical coordination on travel visas, the environment and in fighting illegal immigration. The pact has been criticized, however, for not doing enough to promote human rights and democratic reforms in Russia.

TITLE: British Reporter Barred Entry to Russia
AUTHOR: By Oliver Bullough
PUBLISHER: Reuters
TEXT: MOSCOW — Russia has refused a visa to a British journalist well-known for his coverage of Chechnya and the turbulent Caucasus, citing the needs of “state security”. 
Thomas de Waal, who has previously worked in Moscow for the English-language Moscow Times, the St. Petersburg Times, the BBC and the Times, said on Monday he had been due to attend the presentation of a Russian version of his book on the conflict in Nagorno-Karabakh. 
But the Federal Migration Service refused him a visa. 
The service was not available for comment on Monday but in its letter refusing the application it cited a 1996 law that says a visa can be refused “in the aims of securing state security.” 
De Waal said he had cooperated with Russian officials in the past on Nagorno-Karabakh, a South Caucasus region officially part of Azerbaijan but ruled by Armenians, and did not believe they would bar him for his views on the conflict. 
“This clearly has to be because of the other main thing that I write about, which is Chechnya,” de Waal, 39, told Reuters by telephone from London. 
Russian officials have been sensitive about Western criticism of the war in Chechnya, where they have struggled to crush separatism for more than a decade, and local journalists have been prosecuted for sympathising with the rebels. 
President Vladimir Putin in 2002 said a foreign journalist critical of Russia’s policy in the region should become a Muslim and be circumcised “in such a way that nothing grows back.” 
Russia barred U.S. channel ABC news from Russia after it ran an interview with Chechen rebel leader Shamil Basayev. 
Press freedom groups say that Russia tries to intimidate journalists into only reporting the Kremlin view on Chechnya. 
A Russian journalist in February was convicted of provoking racial hatred after he printed articles by rebel leaders. 
De Waal is best known in Russia for appearing as an expert witness for the defense at the extradition trial of rebel leader Akhmed Zakayev in London. He said that his involvement in the trial could be behind his failure to get a visa. 
The British court in 2003 declined to extradite Zakayev, giving him political asylum instead — a move that infuriated Moscow, which calls Zakayev a terrorist. 
“It is possible that the wheels turn rather slowly, or that this is a cumulative account of things I have done over the last 10 years,” de Waal said. He last visited Russia in January 2005.

TITLE: Defense Minister Says Control Of WMD Is Being Harmed by Politics
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW — Defense Minister Sergei Ivanov, in an apparent swipe at the United States, said Friday that international efforts to rein in the spread of weapons of mass destruction are being impeded by politics. 
“In recent years we have been witness to how the approach of certain countries solving the problem of fighting the spread of WMDs has taken on a more political character,” Ivanov said at a news conference. 
“A distinct chilling is taking place,” Ivanov said, citing issues including the deployment of weapons in space and biological weapons. 
Russia has frequently criticized the United States over its possible use of space weapons and has said Washington is scuttling efforts to strengthen the international biological weapons treaty. 
Ivanov did not mention the United States by name, but his comments came in connection with the release of a government report that also appeared to criticize Washington on nonproliferation issues. 
The report, issued to coincide with the Group of Eight summit in St. Petersburg in mid-July, says “obvious trends are emerging toward weakening the guarantees of state sovereignty and intervention, including intervention by force into the internal affairs of other countries, sometimes under the pretext of resolving the problems of nonproliferation.”
Russia, in turn, has been criticized as undermining nonproliferation through its nuclear cooperation with Iran, where it is building a nuclear power plant. Critics have said the power plant could aid Iran in developing nuclear weapons. 
But Ivanov reiterated Russia’s frequent rejection of those criticisms. 
The nonproliferation report and Ivanov’s comments come in the wake of President Vladimir Putin’s call this week for the United States to open talks with Russia on a weapons treaty to replace the key START agreement, which expires in 2009. 
Washington and Moscow have not shown much interest in a follow-up treaty, and Putin’s call was seen as an attempt to take the initiative. Deputy Foreign Minister Sergei Kislyak told the news conference that initial contacts on a new treaty have begun through diplomatic channels.

TITLE: Report: Relations With Muslims Strained
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: The majority of Russians are convinced that relations between Muslims and non-Muslims are generally bad, according to a survey published June 22.
In a worldwide study carried out by the Washington-based Pew Research Center, 53 percent of those surveyed in Russia said they did not feel the relations were good. 
Alexey Malashenko, a professor at Moscow State Institute of International Relations and a co-chair of the Religion, Society and Security project at the Carnegie Endowment for International Peace, believes Islamophobia in Russia is growing, but not as rapidly as in Western Europe or the U.S.
 “It’s true that the conflict is quite serious and that Islam continues to be rejected in Russian society, but the process is significantly less dramatic compared to similar processes in the West,” Malashenko said in a telephone interview Monday.
“The attitudes to Islam in this country are considerably more tolerant as there has been a certain custom of cohabitation with Muslims in Russia,” Malashenko said. 
According to the CIA World Factbook, up to 15 percent of Russia’s population are Muslims.  Yet, the Pew’s researchers found, 56 percent of the country’s inhabitants believe that being a devout Muslim and living in a modern society is riddled with conflict. 
“The religious ethics of Islam are not better or worse per se than ethics of other religions, but they are less modernized, less adapted to a quickly and radically changing world,” Roman Mogilevsky, advisor with the city’s branch of the Agency for Social Information, told the St. Petersburg Times on Thursday. 
“If we look at Christianity, we find that this social institution reacted accordingly to changes in people’s present values, orientations and interests,” he said.
“People change inside, and if a religion is trying to rigorously stop this, then conflict is unavoidable,” Mogilevsky said.
“Society constantly stresses the freedom of people, talks about personal liberalization, but not about personal responsibility in terms of ethics and morals,” Metropolitan Kirill, the head of the department of external church relations of the Patriarch office of Moscow was quoted as saying on the Kirill&Mefody web portal last week.
“It’s absolutely clear to me that the roots of problems such as intolerance and xenophobia lie in the decay of the traditional system of ethical values that has taken place during the post-modernist era,” the metropolitan said. 
Meanwhile, the counteraction of religious and national discord in Russia is set to be one of the primary goals of the Federation Council United Committee on National Politics and Relations of State and Religious Associations, said the Upper Chamber’s speaker Sergei Mironov on June 22. 
Deputy chair of the Council of Russia’s Muftis, Marat Murtazin, speaking at the committee’s meeting on the same day, called for the state to give equal support to all the religions practiced in Russia.
“We don’t have any right to choose the dominant religion just because the majority of Russia’s citizens practice it,” he said.
“Attempts to put one religion in charge of the state ideology are apt to lead to complications and problems,” he added.

TITLE: Death Toll Falls
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Fires, traffic accidents and other emergencies  killed  4,378 people  in Russia in June, Interfax reported on Monday, quoting a source from the information department of the Emergency Situations Ministry.
Russia  had  13,725 man-made fires, which injured 5,744 people and killed 648. 
Some 5,048 people were rescued, the source told Interfax.
Overall, Russia has had 109,652 fires this year, which have killed 9,149 people. 
The fire rate has dropped by 1.7% since last year, while the fatality rate has gone down by 4.3%.
Russia  had  20,462  traffic  accidents last month, which injured 18,102 people and killed  2,166. The total number of people killed in traffic accidents this year is 8,113.
Some  3,265  forest  fires occurred in Russia in June on an area of about 147,000  hectares. Russia had 18,830 natural fires on an area exceeding 1,415,000 hectares this season.

TITLE: President Calls For Balance in Media
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: MOSCOW — With the G8 summit two weeks away and Western criticism of Russia’s internal politics mounting, President Vladimir Putin over the weekend called for the state-controlled media to make sure opposition voices are heard.
“The political system should be balanced and stable,” Putin said at a meeting with leaders of the United Russia party at a Kremlin country facility, Lesniye Dali, outside Moscow. “This means that those of our colleagues who might be in the opposition today should be provided with a forum to express their opinion.”
Putin added that “only through debates and discussions is it possible to find the best way to develop the state, the country and its economy.”
This was not the first time Putin had called for more balanced media coverage: In his April 2005 state-of-the-nation address, the president said all parliamentary factions should get their fair share of air time. The opposition subsequently received more coverage, but it complained that the reporting was mostly negative.
Last month, more than 1,000 communist and Yabloko demonstrators marched on the Ostankino television tower to demand more airtime.
The St. Petersburg summit of the heads of state of the Group of Eight nations runs July 15-17. 
Western leaders have been under pressure at home to criticize Putin for Russia’s sidelining of opposition groups, adoption of a restrictive NGO law, use of energy supplies to influence political developments in former Soviet republics and support for authoritarian Belarussian President Alexander Lukashenko, among other issues.
But even as he called for more pluralistic media coverage, the president is seeking to solidify the monopoly United Russia maintains on the State Duma and regional and local legislatures across the country.
“If United Russia wants to take advantage of opportunities — so far unseen — on the political horizon, it must play a more influential role in shaping the country’s future policy,” Putin said. 
Responding to Putin, United Russia Deputy Martin Shakkum suggested the president, who is not officially a member of the party, become its leader. The move would allow Putin to exercise vast powers after his term expires in 2008.
Putin has repeatedly brushed aside suggestions that the Constitution be changed to permit him to run for a third term. But he has said he plans to remain in a position of power after he leaves office. Shakkum’s comments evoked little more than a raised eyebrow from the president.
In his remarks, Putin noted that United Russia enjoyed widespread support, including 67 regional heads out of 88, many government ministers and more than 300 of 450 Duma deputies. United Russia head Boris Gryzlov, also the State Duma speaker, said last week that the party would field a presidential candidate in 2008.
Putin’s comments were broadcast at length on the state television station Rossia.
The station devoted about 10 minutes of its evening news program to United Russia’s meeting with the president. 
It also spent about five minutes on a report about the party’s support of orphanages and provincial hospitals.
In an effort to give the opposition more airtime, Rossia said it would broadcast a dispatch on the 50th anniversary of the communist newspaper Sovietskaya Rossia.
But the station failed to mention a meeting of the liberal People’s Democratic Union that was held over the weekend. The movement is led by former Prime Minister Mikhail Kasyanov and 2004 presidential candidate Irina Khakamada.
At the meeting in Golitsyno, 25 kilometers outside Moscow, Kasyanov confirmed he would run for president in 2008. But he said he had no plans to become the head of any political party, as some had projected. 
Kasyanov and Khakamada told reporters the People’s Democratic Union should work with all democratic oppositional parties to create a united list for the next Duma elections, in 2007.
Neither would say whether they had plans to turn the movement into an officially recognized political party or back other liberal parties. “This is not a political but a technical decision,” Kasyanov said.
Under a law approved by the Duma last year, parties must now have a membership of 50,000 — up from 10,000 — and organizations in more than half the country’s 89 regions to qualify to field candidates.
In 2005, the Duma approved a bill barring independent candidates from running and parties from forming coalitions. 
This month, the Duma is expected to adopt a measure preventing parties from running candidates with other political affiliations. 
To protest recent developments, opposition leaders will hold an alternative summit in Moscow less than a week before the G8 summit. Organizers include former chess champion Garry Kasparov and former presidential election adviser Andrei Illarionov. It will also include a mix of opposition figures, including Kasyanov and National Bolshevik Party head Eduard Limonov. The “Different Russia” summit will take place July 11-12.

TITLE: Kremlin Warns Against ‘Different Russia’
AUTHOR: By Anastasiya Lebedev
PUBLISHER: Staff Writer
TEXT: MOSCOW — The Kremlin is warning Western governments not to send representatives to a conference that opposition parties and nongovernmental organizations plan to hold in Moscow just days before the Group of Eight summit, the Financial Times Deutschland reported Friday, citing a presidential aide.
“If high officials take part in [the conference], we will view this as an unfriendly gesture,” Igor Shuvalov, Russia’s envoy to the G8, told the newspaper.
“But if the G8 leaders address this, they will get answers,” he added, suggesting that Russia was willing to deal with conflict during the G8 summit.
The July 11-12 conference, titled “A Different Russia,” is being organized by opposition figures, including former world chess champion Garry Kasparov and former presidential economic adviser Andrei Illarionov, to draw attention to what they call a clampdown on democratic and economic freedoms under President Vladimir Putin. Organizers plan to tackle themes such as poverty, corruption, xenophobia and political prisoners.
Organizers announced last week that British Ambassador Tony Brenton would participate, along with U.S. and other foreign officials.
The British Embassy confirmed Friday that Brenton would attend.
“We see this forum as contributing to the development of civil society in Russia, and the ambassador therefore has accepted an invitation to take part in it,” an embassy spokesman said.
He said Brenton was aware of Shuvalov’s statements to the German paper.
The U.S. State Department did not return calls for comment.
Two officials reached at Shuvalov’s office on Friday said they were unaware of the interview and could not comment.
A Kremlin official involved with the G8 summit played down the conference, saying that G8 summits routinely elicit protests from anti-globalization activists and NGOs. “Unfortunately, some people simply pay no attention to the opportunities for regular constructive dialogue,” he said, speaking on condition of anonymity. 
This year’s G8 summit is being held July 15-17 in St. Petersburg.
Alexander Osovtsov, an organizer of the conference and the former director of Mikhail Khodorkovsky’s Open Russia, said Shuvalov’s comments might boost attendance. “Maybe people who weren’t planning to will come so that no one thinks they’re afraid of Shuvalov,” Osovtsov said.

TITLE: Kremlin Aide Seeks to Attract 1 Million Migrants From CIS
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia hopes to attract up to 1 million Russian-speaking immigrants from former Soviet republics through a federal program offering passports and perks for relocating to remote areas of the country, a senior Kremlin official said Friday.
“Those participating in the program will be counted in the hundreds of thousands, up to 1 million,” said Modest Kolerov, the head of the Kremlin department for inter-regional and cultural ties with foreign countries, Interfax reported.
Kolerov said he expected most immigrants to come from countries with large workforces but unstable economies, although he did not specify which countries.
The federal program, which is aimed at reversing Russia’s demographic crisis, will come into force next year, according to a presidential decree published last week. The federal government will cover the cost of resettling immigrants and provide loans to help them start new lives. It will also offer unemployment benefits for up to six months.
The Federal Migration Service will oversee the program and publicize it among potential immigrants abroad.
As a first step, groups of federal officials will be sent to Russian embassies in former Soviet republics to “recruit” potential immigrants and assist them in moving to Russia, the migration service’s deputy head, Mikhail Tyurkin, said at a conference Thursday. The officials will come from the migration service, the Health and Social Development Ministry and the Foreign Ministry, he added.
“We won’t string people along, but plan to explain to them clearly what benefits they will be entitled to when resettling,” Tyurkin said.
Meanwhile, several of the 12 regions ordered by the presidential decree to report to the federal government about their labor shortages and preparedness to host immigrants by the end of this year have already begun to present initial figures.
The Far East region of Khabarovsk said it was ready to receive 3,000 immigrants, including 750 in the next two years, and could provide them with housing and jobs in the cities of Khabarovsk and Komsomosk-on Amur, Regnum.ru reported.
Irkutsk Governor Alexander Tishanin said his region was ready to receive 1,500 immigrants next year alone, the news agency said.
The Krasnoyarsk region estimated that it needed 10,000 immigrants just to develop Rosneft’s new Vankor oil and gas field.

TITLE: FSB Puts $10M Up in Bounty For Iraq Killers
PUBLISHER: The Associated Press
TEXT: MOSCOW — Russia will offer a $10 million reward for information leading to the capture of the killers of five Russian Embassy staffers in Iraq, Federal Security Service chief Nikolai Patrushev said Friday. 
The announcement came during a meeting of a top inter-agency group called the National Anti-Terrorist Committee, and came two days after President Vladimir Putin ordered special forces to hunt down and “destroy” the killers. 
The slayings shocked Russia and prompted an angry outcry against the U.S.-led coalition. 
“For information that will lead to the result being achieved, the National Anti-Terrorist Committee will pay a reward of $10 million,” Patrushev said in televised comments. 
An al-Qaida-linked group posted a web video earlier in the week showing the killings of three of the Russian Embassy workers abducted last month in Iraq. A fourth was also said to have been killed. The Foreign Ministry a day later confirmed the deaths. 
The four were abducted June 3 after an attack on their car in Baghdad’s Mansour neighborhood. A fifth Russian was killed in the incident.

TITLE: Singing Deputies and Businessmen Get Party Started
AUTHOR: By Anastasiya Lebedev
PUBLISHER: Staff Writer
TEXT: MOSCOW — After office hours they sing, drink and tell jokes about sperm, and they want the world to know — or they wouldn’t have invited the press. 
A group of State Duma deputies and businessmen gathers three times per year at restaurants and casinos to make music. The Singing Politicians and Businessmen Club recently met to celebrate its two-year anniversary at Viking, a riverside restaurant in central Moscow.
Working Russia, a far-left party, gave a choral performance of “My Motherland Is the Soviet Union,” crooner turned Duma Deputy Iosif Kobzon sang hits on request, and a Liberal Democratic Party deputy belted out bard Vladimir Vysotsky’s songs with revamped lyrics mentioning fellatio.
All the while, an emcee kept up a lively patter as waiters served crabmeat appetizers and poured wine and cognac.
“It’s an absolutely Pelevinesque situation,” filmmaker Victor Ginzburg remarked bemusedly from a seat far out of the spotlight. “It’s magic realism.”
Ginzburg, who is working on an adaptation of writer Viktor Pelevin’s hallucinogenic black-comedy novel “Babylon” about Russia in the 1990s, had a film crew the event. 
Mikhail Musatov, a deputy with the Liberal Democratic Party, or LDPR, who made headlines in 1999 when he was barred from Duma elections for failing to declare his three Mercedes cars, roared in a near-perfect impersonation of Vysotsky’s famously hoarse voice. Afterward, the ruddy-faced politician caused a ruckus by repeatedly climbing back on stage with other singers, interrupting the emcee, and drowning out Kobzon’s performances by bellowing “Kobzon! Kobzon!”
Kobzon at one point rolled his eyes and told a joke likening a Duma deputy to a spermatozoon. “Each has one chance in a million to become a human being,” Kobzon quipped, to the delight of the audience of fellow club members and their families. 
Working Russia leader Viktor Anpilov climbed onto the stage with seven pensioners to sing several war songs, one of which, “Fog,” they dedicated to President Vladimir Putin. 
Oleg Mitvol, a senior federal environmental official known for his crusade against illegal construction, sat at the back of the room with his back to the stage. Asked if he would regale the crowd with “Don’t Chop, Men, Don’t Chop,” an early 1990s eco-friendly rock hit, Mitvol said dryly that he had left his sheet music at home and had come only to listen to his friend Alexander Khinshtein sing.
Khinshtein, a Duma deputy with United Russia and a muckraking journalist, sang a somber song about forgotten heroes. He said that even though he had sung about the Stalin-era labor camp Vorkuta at an earlier club meeting, he felt uncomfortable singing similar songs because he had “sent so many people there.” He did not elaborate.
Khinshtein bragged that he knew more than 1,500 Soviet-era songs and that he could recite from memory what brands of cars fellow Duma deputies drove and their license numbers — a feat he immediately began to demonstrate.
United Russia Deputy Viktor Semyonov, a first-timer to the club, announced that every politician would agree with the message of the song he was about to sing. “I’ll never find the truth in this life,” he sang. “Only birds will cry over me.” He later explained that the song meant Russia had a difficult destiny but a profound soul.
“Usually things are a lot more peaceful,” party organizer Mikhail Zuyev said reassuringly. He said a cognac distiller had provided unlimited drinks for the event and the stifling 30-degree-Celsius heat had caused some guests to drink too much.
Expressing some frustration with Musatov’s antics, he said he wished that LDPR leader Vladimir Zhirinovsky had shown up. “Maybe he’d have calmed down his artist faster than we could,” he said. LDPR spokeswoman Lyudmila Loseva later defended Musatov, saying by telephone, “Mikhail Musatov always behaves respectably, and his behavior never elicits negative emotions.”
Other prominent club members, including Federation Council Senator Lyudmila Narusova and her socialite daughter Ksenia Sobchak, did not attend due to prior engagements, Zuyev said. Communist leader Gennady Zyuganov was held up at a press-freedom rally and phoned in his apologies.
Not all politicians are amused by the singing politicians club. Liberal deputy Irina Khakamada believes that events such as the club’s parties make politicians look like “buffoons,” said her spokesman, Konstantin Lazarev. “It’s propaganda so that people feel entertained and don’t think about what’s really going on in politics,” he said.
Khakamada herself would never take part in such an affair, Lazarev added. “Besides, she has no singing voice.”

TITLE: Hungarian OTP Banks On Eastward Expansion
AUTHOR: By Balazs Penz
PUBLISHER: Bloomberg
TEXT: MOSCOW — OTP Bank Nyrt., a Hungarian lender that’s spent $1.9 billion expanding in eastern Europe the past six years, bought Moscow-based Investsberbank for $477 million to enter its largest foreign market and counter slowing growth at home.
OTP is buying a 96.4 percent stake in Investsberbank, Russia’s third-largest credit card issuer, Chairman Sandor Csanyi said at a press conference in Moscow on Monday. The bank plans to close the transaction in the third quarter.
Russia, with a population of 144 million, is OTP’s seventh market abroad. The Hungarian lender is working to counter slowing growth at home amid competition from rivals like Austria’s Erste Bank AG and benefit from growing loan demand in Russia. The Russian economy is growing twice as fast as Hungary and its retail banking market is dominated by state lenders like Sberbank.
“This acquisition is positive for OTP,” said Ralph Luther, who helps manage 20 million euros ($25.5 million) in Hungarian stocks at Berenberg Bank in Hamburg. “There are risks in Russia, but growth potential may offset those risks.”
Russia offers “fantastic” growth opportunities as its banking industry is “underdeveloped,” added Luther, who owns about 2.5 million euros in OTP shares.
Investsberbank has 78 branch offices, concentrated mostly in Moscow and Omsk. It had 91.5 million euros in pretax profit last year and its assets totaled 979.5 million euros at the end of 2005.
The purchase comes after OTP in June paid 650 million euros ($818 million) for a Ukrainian unit of Raiffeisen International AG, the Hungarian bank’s biggest-ever acquisition. OTP is also bidding for four other lenders to add to its holdings in Romania, Serbia, Slovakia and Ukraine. The company presently has units in Bulgaria and Croatia.
The Budapest-based lender’s stock rose 2.8 percent to 6,443 forint as of 12:39 a.m. in Budapest. They have lost 7.5 percent this year.
The Hungarian bank will raise 1.1 billion euros ($1.4 billion) in subordinated loans and other forms of financing, excluding the sale of new shares, to finance the purchase of Investsberbank, Raiffeisen’s Ukraine unit and Serbia’s Kulska Banka, Deputy Chief Executive Officer Laszlo Wolf said in Moscow.
OTP expects to close another purchase “within weeks,” Wolf told reporters after the press conference. Its bid for Kulska Banka is “on track” and the lender is in talks to buy another Ukrainian bank, he added. OTP is also considering the Montenegrin market, Wolf said.
“I don’t see the limits of the bank’s expansion as long as we can speed up income growth,” Csanyi said. “A growing ratio of profit growth will come from abroad in the future, where both macroeconomic and growth conditions are better” than in Hungary.
The Hungarian lender wants Investsberbank to be present in all 30 Russian cities with populations of at least 500,000, Csanyi said. It will open more branches and may buy “small regional banks.” The first expansion target is the Urals region and the southern part of Russia’s European area.
OTP will also continue to focus on retail banking, an area where Investsberbank holds the fourth-largest share of Russia’s consumer loan market, Csanyi said. Mortgage lending and auto finance will also be developed under the Russian bank’s brand name.
“The purchase price OTP will pay is acceptable considering the growth potential of the Russian lender,’’ said Akos Herczenik, who follows OTP at Takarekbank in Budapest.
OTP’s profitability has been under pressure as the Hungarian government ends state subsidies to mortgages and student loans to rein in the EU’s largest budget deficit. The bank’s net income rose by at least 20 percent in each of the past six years, to a record 158 billion forint ($737 million) last year.
The company increasingly relies on its units outside Hungary for earnings growth. OTP derived 10 percent of its first-quarter net income from its international businesses, compared with 8.2 percent a year earlier.

TITLE: Petronas Eyes Shares in Rosneft’s IPO
PUBLISHER: Bloomberg
TEXT: KUALA LUMPA — Malaysia’s state oil company said it may buy shares in Rosneft’s $11.6 billion initial public offering, increasing its overseas investment as output from Malaysian fields stagnates.
Petroliam Nasional Bhd., known as Petronas, is considering an invitation to buy the stock, Chief Executive Hassan Marican was cited as saying by Malaysia’s state news agency Bernama. The comments were confirmed in an e-mail by a company official, who asked not to be identified.
Record oil and natural gas prices increased Petronas’s cash holdings and investments to $25.3 billion as of March 31.
Dwindling discoveries at home have prompted acquisitions in Africa, the Middle East and Southeast Asia. Rosneft is seeking to complete the world’s fourth-biggest initial sale, valuing Russia’s third-biggest oil producer at as much as $80 billion.
“Petronas wants to use excess cash to expand their reach and become a major player in the global arena,” said Royston Quek, a credit analyst at Standard & Poor’s in Singapore. “It will help boost their profitability in the longer term.”
BP, Royal Dutch Shell, China National Petroleum Corp. and China Petrochemical Corp. have been approached to buy Rosneft shares, Russia’s Vedomosti said today, citing unidentified bankers.
Sale organizers are proposing oil companies each buy as much as 5 percent of the IPO, Vedomosti said.
Rosneft, whose shares are due to start trading on July 14, includes assets seized from Yukos by President Vladimir Putin in a dispute over tax arrears.
Exxon Mobil Corp., Chevron Corp. and Eni SpA are among the international energy companies considering taking part in Rosneft’s IPO, Vedomosti said. India’s Oil & Natural Gas Corp. has already filed a bid for shares, the newspaper said.

TITLE: Swedish Tele2 Could Buy Smarts for up to $750 Mln
AUTHOR: By Lyubov Pronina and Maria Fredriksson
PUBLISHER: Bloomberg
TEXT: SAMARA — Tele2, Sweden’s second-largest phone company, is in talks to either merge its Russian assets with Smarts’ or buy the company for as much as $750 million to create the fourth largest mobile operator in Russia.
“We confirm the fact of negotiations,’’ Smarts First Deputy Chief Executive Officer Andrei Girev said in a phone interview from the city of Samara, in central Russia, where the company is based. The companies may either combine their Russian businesses on a 50-50 basis, or closely held Smarts with 3.3 million subscribers would be bought by Tele2, he said. The price for Smarts that is being discussed is between $650 million and $750 million. The deal could be closed later this year.
The move would follow Tele2’s earlier purchases in the country. In February it raised its stake in five Russian mobile-phone companies to help cement its position in the market to boost sales and profit as western European countries near saturation. The increased holdings are part of Tele2’s “long-term strategy for Russia,’’ the company said on Feb. 23.
“Smarts is a difficult purchase and will not make the life of Tele2 easy,” Andrei Klimov, spokesman for MegaFon, Russia’s No.3 wireless operator, said in a telephone interview. Smarts “have tried to sell since 2000.’’
Negotiations were first held two years ago and the companies then failed to reach an agreement, said Girev. Tele2 is in talks with MCT Corp., a U.S.-based telecommunications company operating in Russia and Central Asia under the Indigo brand, he said. According to him, Tele2 is also in discussions with other regional operators in Russia that include the units of Svyazinvest, the national fixed-line operator, which also have mobile phone operations such as Uralsvyazinform.
MCT spokeswoman Yulia Shalneva in Moscow said that MCT is not making a secret of its wish to sell its Russian assets and is in talks with buyers she declined to identify.
Stockholm-based Tele2 Chief Executive Lars-Johan Jarnheimer said through his spokeswoman Malin Sparf Rydberg that he declined to comment on Girev’s statement.
Tele2’s sales in Russia and the Baltic countries jumped 56 percent to 1.316 billion kronor ($181 million) in the first quarter of 2006 from a year earlier, mainly because of the Russian market where Tele2 took market share, the company said on May 3. The market unit made up almost 10 percent of Tele2’s sales in the quarter.
“Tele2 is already present in 13 regions of Russia and considers it a strategic market,’’ said Yevgeny Golossnoy, a telecommunications analyst with Troika Dialog in Moscow.
“Smarts is active in 16 regions, it will make a good expansion for Tele2.”
Since Tele2 first ventured into Russia by acquiring FOR A Telecom BV in 2001, it has gained wireless licenses in regions with 34.5 million people.
Smarts is active in Russian regions with a population of 33 million people, said Girev. Mobile phone penetration in Russia in May reached 94.7 percent, up from 92.8 percent in April, Moscow-based Advanced Communications & Media, which compiles data on the industry, said on June 8.

TITLE: IN BRIEF
TEXT: Transas Residency 
ST. PETERSBURG (SPT) — The Council of Experts officially decided June 26 to register the Transas Group as a resident of the Neudorf Special Economic Zone (SEZ) in St. Petersburg.  
Transas manufactures shipping security systems, naval and aircraft onboard equipment, navigation and flight simulators, and other advanced technology products. In 2005 annual turnover of the group exceeded $100 million. 
Transas will start construction this year of a 30,000 square meter building in the zone. Overall the group is ready to invest more than $25 million in the SEZ, 40 percent coming from personal funds, and 60 percent raised through loans. Transas envisages the payback period as less than five years. 

Raiffeisen Openings 
ST. PETERSBURG (SPT) — Raiffeisen Bank Austria announced on June 26 the opening of two new offices in St. Petersburg at Avstriyskaya Ploshchad and Park Pobedy. At the same time the company celebrated the 5th anniversary of its arrival in the Northern capital.
The two new offices have been opened as a result of increased demand in the Northwestern region, the official statement said. As well as a general range of banking services, the new Park Pobedy branch will focus on the provision of mortgages.
Raiffeisen Bank Austria is a subsidiary of Raiffeisen International Bank-holding that runs 16 subsidiary banks and listing companies in Central and Eastern Europe. 
At the end of the first quarter in 2006, it was 8th in a list of Russian banks with the biggest assets. Raiffeisen Bank Austria has 18 offices in Moscow, five offices in St. Petersburg,  and is represented in six other cities.

TITLE: Ukraine Buys Time to Talk Gas
PUBLISHER: Combined Reports
TEXT: KIEV — Ukraine’s outgoing government won a deal with Moscow on Friday to keep the price of gas imports from Russia unchanged for three more months, without resolving a dispute that could still disrupt flows to Europe this winter. 
Ukraine agreed in January to a near doubling of the low prices it had been paying to Russia for gas, calming a row that had briefly cut supplies to Europe of Russian gas through pipelines across Ukrainian soil. 
Russia had signaled it wanted to raise the price in July, but the new deal will keep it at $95 per 1,000 cubic meters until the end of the third quarter, Ukrainian Prime Minister Yuriy Yekhanurov told reporters. But further talks, he said, were required to negotiate a price for fourth-quarter supplies. 
“Our industry can operate in a calm fashion. As for the fourth quarter, we will work further,” Yekhanurov said at the start of a Cabinet meeting. 
The delay means Ukraine’s tough task of settling a longer-term deal with Moscow is likely to fall to the next government. 
He said the agreement had been reached in talks between Ukrgazenergo and RosUkrEnergo, firms acting as intermediaries to supply Russian and Central Asian gas to Ukraine. 
Ukraine’s economy, dominated by heavy industry, has been hit hard by the January price increase. 
Kiev accepted the rise to $95, from $50, after gas export monopoly Gazprom briefly cut supplies to Ukraine, affecting flows to Western Europe just as demand was high due to a very cold winter. 
Gazprom supplies one-quarter of Europe’s gas, and up to 80 percent of its European exports pass through Ukraine. 
Alexander Ryazanov, Gazprom’s deputy chief executive, also said Friday that price changes were unlikely for the time being. 
“No decision about raising gas prices for Ukraine on July 1 has yet been made,” Russian news agencies quoted Ryazanov as saying ahead of Gazprom’s annual general meeting. Ryazanov is also a member of RosUkrEnergo’s coordinating committee. 
Ukraine, meanwhile, continued its fight over gas supplies on a second front, as Turkmenistan on Friday announced that its natural gas contract with Ukraine for the current year was invalid. 
Turkmenistan has been putting pressure on Ukraine to pay about 50 percent more than what it currently pays.
Ukraine’s fuel and energy minister, returning to Kiev after talks in Ashgabat, said the two sides “agreed on nothing,” but denied that the 2006 contract had been annulled. 
Turkmenistan’s gas supplies have taken on even greater importance for Ukraine after the dispute with Russia, but Kiev has repeatedly stalled on agreements to pay off debts, and Turkmen officials have repeatedly criticized Kiev. 
In a statement, the Turkmen Foreign Ministry said Gazprom had not issued a license for Turkmen gas to travel through Russia to Ukraine, even after Ukraine and Turkmenistan signed the 2006 contract, thus making the contract outdated. 
Gazprom controls the only transit route for Turkmen gas exports to other ex-Soviet states and Europe. 
(Reuters, AP)

TITLE: Shareholders Revolt Against Severstal Bid
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — Arcelor shareholders dumped Severstal owner Alexei Mordashov’s offer at a Friday meeting in Luxembourg — with not a single shareholder voting in favor of his merger bid.
The shareholder revolt, a little over a month after Arcelor’s board backed the Severstal offer, represents a dramatic setback for Mordashov’s ambitions to become a major player in the global steel industry. It is also a rebuff of his public relations campaign, which appeared to be outclassed by Mittal’s more sophisticated appeal to shareholders.
The vote against Severstal’s bid, by 97.6 percent of shares represented at the meeting, paves the way for Arcelor to merge with Mittal Steel to create a steel giant with a capacity of more than 100 million tons per year — three times bigger than its nearest rival. 
The only sign of any shareholder qualms about rejecting Mordashov’s offer were the ballot papers for 2.4 percent of shares that were turned in blank.
The meeting came five days after Arcelor’s board dropped its opposition to Mittal, which first announced a takeover bid five months ago.
By Sunday, Mordashov appeared to have dropped any thought of plans for a last-ditch bid to buy Arcelor outright. Instead, he was reported to be planning a sale of up to one-quarter of Severstal shares, worth 3 billion euros ($3.8 billion), in London later this year, The Business reported, citing a banker familiar with the situation. Mordashov will not consider further transactions with European steelmakers until after the share sale, The Business said.
At Friday’s meeting, shareholders representing nearly 58 percent of the company voted against Mordashov’s offer. A total of 60.4 percent of shares were represented at the meeting, more than the 50 percent needed to reject the deal.
“Seeing this vote, the board will now unwind the agreement with Mr. Mordashov,” Arcelor chairman Joseph Kinsch told shareholders after the vote.
Mittal Steel will now have until July 12 to collect pledges from more than 50 percent of Arcelor shareholders to succeed in its $31.9 billion takeover bid.
Arcelor shares rose slightly after the vote Friday, by 0.3 percent to 37.60 euros, and Mittal’s fell 5.1 percent to $30.60 after the news. Severstal’s shares jumped 2.4 percent to 286 rubles.
Some Arcelor shareholders said after the vote Friday that Mordashov could take heart from the fact that they had not objected to Severstal, but simply picked a better deal.
“The objections were [to] the Arcelor board and its treatment of shareholders,” one London-based fund manager said. The board structured the Severstal deal in a way that made it very difficult for shareholders to oppose it, he said.
Kinsch defended the board’s actions, saying it had created 12 billion euros ($15.3 billion) in extra value for shareholders since Mittal first announced its bid. 
Despite some sympathy among Arcelor shareholders for Severstal being used to bump up the price of Arcelor for Mittal, Mordashov’s PR let him down, investors said.
“He should have come to Paris, he should have met us,” Francois de Rambuteau said in an interview last week. “No one knows very much about Mr. Mordashov in Europe. It’s easy for others to play on stereotypes about Russian business.” 
In an example of Severstal’s misfiring PR campaign, on a web site set up June 20 to promote its bid a final comment was posted Friday at 1:50 p.m. Moscow time — 50 minutes after the meeting in Luxembourg had started.
Senior Russian steel insiders said Mordashov should not be too downhearted, however. 
“Mittal has a wealth of experience in international relations. Mordashov is young, he’s got it all ahead of him,” one Russian steel company shareholder said.
“The decision stemmed from a complex set of reasons, but one point was the clincher — the buyback clause,” a top executive at another Russian steel company said. Under the clause, withdrawn by Arcelor on June 20, Mordashov’s stake could have increased to 38 percent after Arcelor completed a $6.5 billion share buyback. “This would have given Mordashov 6 percent in Arcelor for free, and no other shareholder would want to see that,” the manager said.
The U-turn by Arcelor’s board also pointed to an internal power struggle, the manager said. If Mordashov’s bid had succeeded, he could have helped Arcelor CEO Guy Dolle squeeze out Kinsch, the manager said.
Last Monday, Kinsch said that Dolle — who once described Mittal’s steel as cheap eau de cologne compared to Arcelor’s fine perfume — was ready to step down. 
For Mordashov, who will pick up a 140 million euro ($176 million) break-up fee, the best reaction would be to step back and later re-enter the market as a buyer, said Kirill Chuiko, a metals analyst with UralSib.
“The deal clearly shows that Mordashov wants to strike merger and acquisition deals and is ready to sacrifice his assets for a share in a larger company,” Chuiko said. “But there aren’t a thousand companies like Arcelor out there.”

TITLE: Rostelecom Profits Fall 77 Percent
PUBLISHER: Bloomberg
TEXT: MOSCOW — Rostelecom, Russia’s biggest long-distance telephone company, said profit fell 77 percent last year, more than analysts anticipated, because it wrote down the value of assets including equipment.
Net income declined to 978 million rubles ($36.4 million) from 4.3 billion rubles a year earlier, the Moscow-based company said in an e-mailed statement Monday. Profit would have risen 12 percent to 4.8 billion rubles without the depreciation charge, the company said. The median profit estimate excluding the charge was 5.1 billion rubles in a Bloomberg survey of 12 analysts.
Rostelecom, controlled by Svyazinvest, is reducing its workforce and investing in its network to fend off competition following the loss of its monopoly. The company said Monday it cut 7 percent of its workforce last year.
“The numbers are disappointing,” said Andrei Bogdanov, a senior telecommunications analyst at Troika Dialog brokerage in Moscow. Bogdanov said that even when excluding the writedown, net income estimates were higher than what the company reported.
Rostelecom shares fell as much as 3.6 percent to 124.01 rubles on the Micex index in Moscow. They traded at 125.76 rubles at 2:19 p.m. local time.
Sales rose 9.7 percent to 40.96 billion rubles, from 37.3 billion rubles a year earlier, the company said. All figures were reported under International Financial Reporting Standards.
Rostelecom said its domestic long-distance traffic increased 2.8 percent in 2005. Outgoing international long-distance traffic grew 15 percent and incoming international traffic climbed 18 percent.
The company’s operating income before depreciation and amortization, or Oibda, increased 9 percent to 13.9 billion rubles. Oibda as a percentage of sales, a profitability measure tracked by analysts, remained at 34 percent.
Bogdanov, who had estimated the Oibda margin would be 36 percent, said the liberalization of the long-distance market will continue to put pressure on the company’s margins.
“The situation will only continue to deteriorate,” Bogdanov said. “We do not look at it as a growing business, hence our recommendation is “sell” on the company.”
Rostelecom’s workforce shrank by 7 percent to 23,600 people last year. The company said it increased investments by 79 percent to $279 million to upgrade and expand its network. This year it plans to invest $350 million to increase revenue from traffic and keep its leading position on the market.

TITLE: Deposit Insurance On The Increase
AUTHOR: By William Mauldin
PUBLISHER: Staff Writer
TEXT: MOSCOW — The State Duma has approved in a second reading a bill that would almost double the amount of deposit insurance available to retail customers at Russian banks.
Currently more than 900 banks approved by the Central Bank carry deposit insurance that guarantees up to 100,000 rubles (about $3,700) per depositor. The bill would additionally guarantee 90 percent of deposits between 100,000 and 200,000 rubles, which means retail customers could be covered for deposits of up to 190,000 rubles.
Duma Speaker Boris Gryzlov told Interfax that the level of deposit insurance could rise even higher next year, up to 300,000 rubles.
Bankers say the guarantees are crucial for the development of a healthy banking sector, because without adequate deposit insurance Russians are much more likely to deposit their savings only in state-controlled banks such as Sberbank or foreign banks such as U.S. Citibank, which are viewed as safer.
In a recent interview, Promsvyazbank senior vice president Valery Kardashov said his average customer in Moscow had more than $7,000 in deposits. Increasing the level of insurance would thus help more of Promsvyazbank’s customers get better coverage for their deposits. “As this requirement applies to all banks, this puts commercial banks like Promsvyazbank on an equal footing with state-owned banks and foreign banks,” the bank said in a statement.
On Thursday, Alfa Bank said in a report that 32 percent of savings in Russia are kept outside banks. Banks have had to raise deposit interest rates to compete with mutual funds, which have increasingly attracted personal savings.

TITLE: Italy Mulls Opening up to Gazprom
PUBLISHER: The Associated Press
TEXT: MOSCOW — Russia and Italy are working on a reciprocal deal that will open the Italian market to natural gas behemoth Gazprom and allow Italian energy giant Eni to drill for gas in Russia, the Italian foreign minister said Friday. 
“We are currently discussing a new agreement between Gazprom and Eni,” Italian Foreign Minister Massimo D’Alema said after a meeting with his Russian counterpart Sergei Lavrov. “It is a new type of deal that will open up our markets for Gazprom, so that it can sell its gas directly in Italy rather than through Italian firms,” D’Alema said.
Gazprom is pursuing a strategy whereby foreign energy companies will be allowed to tap into its nearly 30 trillion cubic meters of gas reserves on the condition that Gazprom is given access to Europe’s lucrative retail and distribution markets.

TITLE: Dutch Truck Driver Makes All the Right Moves
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: Norbert Gooren, general manager at AAA MOVERS RUSSIA, has always been interested in transport and the business of moving. Having started working by combining the roles of a truck driver and warehouse worker over ten years ago, he soon jumped up the career ladder, gaining international work experience in management and eventually starting his own business in St. Petersburg this year.
Gooren was born in 1972 in Oeffelt, a small town in southeast Holland. On finishing high school he made the move towards logistics. 
“I studied European Logistics as a major at college, mainly focusing on the road transport sector. The courses gave me a basic but essential knowledge of the industry,” he said. 
Gooren followed his course with an internship at an international transport company where he was made responsible for all warehouse activities and transport documentation for import and export. 
“The company was mainly focused on Eastern Europe and that is when I got interested in this area. After the training I decided to stay on,” he said. 
Starting off in the warehouse, Gooren later combined this with work as a truck driver — it gave him “a good chance to look around and to gain knowledge of all aspects of transport.” 
It was at this time that Gooren came across a removal company advertising jobs in Eastern Europe. In June 2000, he joined the company as an operational manager and moved to the Hague. 
“After a six-month training period I was ready to take up a position in Russia. Actually, at that time I didn’t mind which country I went to,” he said. 
In January 2001, Gooren started working at Voerman International in Moscow. After three and a half years of work in Russia, he decided to move back to Holland in order “to recharge the batteries” in his motherland. 
“It was an interesting but very intense period for me. I was exhausted from working in Moscow. I did not know if I wanted to stay in Russia or go to another country,” Gooren said. 
“The point is that in Russia work requires a great deal of energy. You face a lot of issues that we are not used to in Western Europe. After a certain amount of time the batteries run low and it gets harder to solve problems that tend to arise on a daily basis. That is why it is sometimes better to go out of the country and look at the situation from afar. It is hard to judge difficulties when you are in the middle of them.” 
After a five-month break, however, Gooren decided to return to Moscow. “Coming back to Russia was a difficult decision, but it is a country with lots of opportunities and I didn’t want to pass up the chance of doing business here,” he said. 
Gooren first thought of starting his own company in 2003, and even devised a business plan, though at the time he could not push it through. “Three years later, the opportunity came along and my plan became viable,” he said. A policy change at Voerman International gave him the opportunity to take over its St. Petersburg’s office, and Gooren started his own company AAA MOVERS RUSSIA, as a representative of Voerman International in St. Petersburg. “Now we are partners and it’s a good way of working together,” he said.
Gooren said that he is now eager to apply all his experience in the development of his new business. 
“Now I am doing what I’ve always wanted to do. My company provides every possible removal service in St. Petersburg and Russia. On top of that we have a worldwide network. We also run successful projects for office moves on the local market,” he said. “We are focused on presenting a variety of services to our clients, offering personalized solutions.”
As a foreign manager in Russia, Gooren said that he often faces issues resulting from a difference in working standards in Russia and Europe. “Foreign clients usually expect a certain high standard and local staff should be aware about it. In Holland, everything is traditionally very, very well organized, while, in Russia, it is a transitional period, a time of big changes. And, although it can cause some problems for doing business here, that is what makes it especially interesting and challenging for me,” he said. 
In Gooren’s opinion, there is no point applying a fully-fledged western management style to Russian business. “Every country has its own culture and you have to respect it,” he said. “Among the main problems of foreign managers coming to Russia are their high expectations. Having not succeeded in using their western experience and knowledge in a new country, they soon get frustrated and disappointed and might go back home,” he said. Therefore, Russian managers who have trained abroad but are aware of Russia’s cultural distinctions can be very efficient here,” Gooren said.
According to Gooren, Russian personnel, unlike their Dutch counterparts, require “a more direct management style. Here people are motivated maybe in a different way than in Holland, which has a well organized social security system,” he said.
As a manager, Gooren always tries to encourage the professional development of his staff motivating them with various types of training and getting them to improve their English skills. Those of his employees who are successful are usually rewarded with days out or presents. 
“It is very important to appreciate your workers’ achievements. It is the most rewarding thing when you help people to grow professionally. And I am always happy to discuss with them any new ideas they want to realize at work,” he said. 
Management, in general, comes down to common sense. “You should just treat your staff, how you yourself would want to be treated. However, it is important to remember that you can’t change everything at once. “Many small steps can also bring about a big change,” he said. 
A good negotiator, Gooren thinks that communication is the most vital part of business. “In order to succeed, you need to be open and honest and in the long term it will work out” he said. 
“My objective for the next three to five years is to let AAA MOVERS RUSSIA grow steadily, become known as a solid and reliable company that finds the best solutions for its clients, and provides possibilities for growth and social security for its employees,” he said. 
“And it’s not only about making money, the point is to set a goal that keeps you motivated, focuses on professional development and self-fulfillment and makes you enjoy life.”

TITLE: Telephony on Test: Skype versus Tel-Me
AUTHOR: By Ilya Shatilin
PUBLISHER: Special to The St. Petersburg Times
TEXT: Skype’s globally popular and convenient IP-telephony service may face local market resistance following the launch of Russian provider Telphin ‘s Tel-Me project. 
We decided to examine the advantages and disadvantages of both services to find out if there is scope for challenging Skype’s monopoly and inevitable expansion across the country.
Our comparison of the two services is split into several deciding factors within categories such as quality of communication, cost, convenience of use, convenience of payment and additional services. 
We tried, on top of descriptive evaluation, to quantify performance on a scale from one to five, thus facilitating the task of finding a “winner.” 

1. Quality of communication
The quality of communication across both providers within the network (i.e. without charge) depends strongly on the quality of the subscriber’s channel at the other end of line, according to the general parameters of a specific line (we ourselves used a separate Internet line of one Mb per second).
Frame fallout can often be observed over a long distance (cleared up by a command traceroute) and during long delays (ping), however it was still possible to have a conversation — providers were given four points each. 
There’s no obvious leader of pre-paid calls on fixed-line and mobile phones. Having made a series of calls within Russia we often faced one-way audibility (we could hear a subscriber but they couldn’t hear us). This is possibly connected with the location of specific sluices of traffic processing but it remains a fact. As a result both received four points. 

2. Cost of services
Given that communication between subscribers on the same network is free (with the exception of the cost of internet access), it might seem that there is little here for comparison. Skype has the indisputable advantage in terms of coverage — you can talk free of charge to millions of users all over the world. The coverage of Tel-Me is in any case limited to Russia. Thus Skype was given the maximum five points “for the potential extent of free communication.” Tel-Me was given only three.
Moving on to the tariffs on chargeable services — of course it’s often the case that the people you need to phone have neither access to Skype nor Tel-Me, only an ordinary phone. Tariffs in dollars for the most popular directions are summarized in the table below:

In short, Tel-Me is cheaper. A difference of one hundredth of a cent is not deemed crucial because prices before VAT are the same ($0.021) — the difference only comes down to the rate of tax. As a result, Tel-Me gets five points and Skype only three. 
This test has not fundamentally changed the alignment of forces — for some people a “circle” of communication is more important, for others saving money on calls here and now.

3. Convenience in use
We used a client supplement of the version 2.0.0.105 for Skype, and X-Lite for Tel-Me. 
One undoubtable advantage of Skype is that the program adapts automatically to any system configuration and doesn’t require setting up. On the other hand, Tel-Me can be used with any program you like. 
X-Lite differs from client Skype in its (sufficiently) smaller size of distribution (1.2 Mb against 9 Mb) and by its convenient interface in the form of a telephone. It also offers the choice of audiocodex. 
Skype looks more like a cool Instant Messaging program, abounding in functions. But not every user will need things such as videoconferencing. 
It’s also important to note that Skype (supplement) can only be used to make calls through its network, while X-Lite can be tuned in to networks of different providers, switching between them on demand. 
To summarize: although Tel-Me requires one to play around with program settings, at least the latter are in plentiful supply — it gets four points; Skype’s single program is complicated and intricate and limited to its own network -earning it three points. 
While this article was being prepared for publishing a new program called Telme appeared, which is set up by itself and, like Skype, has a wide range of possibilities. 
The program was specially made for Tel-Me and even their logo is presented on the screen. 
According to the company, “with its arrival many problems have disappeared, including the difficulties associated with the settings, one-way audibility etc. 
Now most subscribers don’t even need to know which settings to use — everything happens automatically, without the user’s interference. 
This program was developed by the company CounterPath — a leading creator of program maintenance for VoIP; that is, they guarantee quality. We offer 30-day trial version for free, the full version is also given for free on condition that a 450 ruble ($18) deposit is placed into your account.” 
Both providers allow phone calls not only through a computer but also by means of IP-telephones. Although such phones work with Skype (four points), they are not sold in Russia, while Tel-Me sells its own, and receives five points. 
Technical support is not a factor to be taken too lightly. While Tel-Me offers support and a helpline in Russian, Skype requires you to write an e-mail and wait for a reply (in English) — the companies were given five and three points, respectively)

4. Convenience of payment
Skype services can only be legally paid for in Russia with an international credit card. Nevertheless, so called “brokers,” who take Webmoney, do exist. Of course there is not much security in place, but people still use them. 
Tel-Me can also be paid for by credit card, Yandex Money or through a bank transfer. Unfortunately, the simple and convenient practice of selling cards or of paying by SMS has not yet come into being. As a result, Skype receives two points, Tel-Me — three.
 5. Additional services
Both providers give out telephone numbers. Skype only has numbers in the U.S., the U.K., Brazil, Denmark, Estonia, Finland, France, Germany, Hong Kong, Poland, Sweden and Switzerland, Tel-Me - in Moscow, Petersburg, the U.S., the U.K., Finland, Brasil, Spain, Italy and Estonia. 
There is also a sluice for receiving calls (tone dialing) in Moscow, Petersburg and the U.S. (and one doesn’t need to buy a number). Unfortunately, Skype’s version has been at the stage of beta testing for several months and nobody is guaranteeing that it works normally. Although Skype numbers are cheaper, it still loses out to Tel-Me three points to five.
Tel-Me has a service for diverting calls ($5 a month + traffic), while Skype has voice mail ($5 for 3 months or $15 for a year). The main purpose of these services is to receive incoming calls when you are not in front of the computer. The service of Skype seems more economical, although really such services could be free of charge. Skype was given four points, Tel-Me - three.

A list of summarized results can be found in the table below: 

From this we might point out with confidence the differences between Russia and the West - even something global needs serious revisions here. 
Undoubtedly, the “Russian Skype” Tel-Me has not been launched in vain. Its main advantages are in terms of cost, flexibility when choosing programs or equipment, technical support, convenience of payment and a wider range of numbers for incoming communication. 
Skype’s global network (of free communication) and cheap voice mail service are the main factors to consider when finally choosing between the two companies.

TITLE: Guarding Channels
AUTHOR: By Ilya Shatilin
PUBLISHER: Special to The St. Petersburg Times
TEXT: As crime increases, so have measures to safeguard property, making use of any appropriate advances in technology. If before it was enough to have an ordinary mechanical code lock on the entrance door, now an intercom system, preferably with video spy hole, is mandatory — even better is to install CCTV.
Such measures have their complications: intercom requires additional cable installed in each flat; the images from CCTV appear on the screen of a concierge, normally a local babushka who doesn’t really look at the monitor but knits, reads or watches TV; installation of such a monitor in every flat is out of question.
But why can’t TV sets, which are anyway found in every flat, be used instead of screens? The idea is brave but simple — if the building has cable TV, new technology could allow the transmission of CCTV pictures to residents through the form of an ordinary TV channel. In other words, a person can switch to a channel and watch what is happening. The same technology allows linking up the intercom with cable TV, thus avoiding additional cable. Moreover, the picture can be displayed on the centralized supervisory console and then professional guards can keep an eye on everything in real time. 
The technology is potentially useful but unfortunately at the moment it is not available to everyone. Several conditions have to be met to be able to use it. Firstly, the building should have cable television supplied by the company “Saint-Petersburg Cable Television” (“Your TV”) — at the moment only this company provides such a service. Secondly, an Association of Property Owners should be set up in the building - only on agreeing such a contract can something organized. 
Although such a service is currently on trial in several Associations of Property Owners, the company eventually plans to promote its service across the whole city.

TITLE: Pirate-Disc Fighters Facing Uphill Battle
AUTHOR: By Alex Nicholson
PUBLISHER: The Associated Press
TEXT: MOSCOW — When “The Da Vinci Code” premiered in Moscow, Konstantin Zemchenko started his count. 
As the Motion Picture Association of America’s top pirate-fighter in Russia, Zemchenko’s operatives were monitoring the capital’s markets and street stalls for when the first bootleg copies would appear. His goal? A modest 10-day delay. In the worst pirate market in the world after China, that translates into a blockbuster for Hollywood, which says it loses well over $300 million a year in Russia. 
On this occasion, the pirates won: Three days after the premiere, a grainy, camcorder copy of the movie that cost a reported $125 million to make was available on DVD for 150 rubles (under $6). Two days later, a pristine version with an interactive menu was on sale for the same price. It sometimes feels like running to standstill for Zemchenko, whose Russian Anti-Piracy Organization, or RAPO, sifts through the millions of discs that police confiscate. 
“We’re choking on the volume,” he said in a recent interview in RAPO’s headquarters, located in a converted kindergarten on a leafy lane in northern Moscow. Stacks of boxes overflowing with confiscated DVDs clutter its narrow corridors. 
In quieter times, Zemchenko organized film festivals abroad as foreign relations director of the Soviet Union’s Union of Cinematographers. Now, his job involves more than just long hours in the office. “There are threats — all sorts of things. You get complicated moments, you get phone calls,” he said, reluctant to discuss an uncomfortable topic. Anti-piracy organizations have repeatedly stressed the link between organized crime and counterfeiting. 
RAPO’s warehouse currently holds about $7 million-worth of pirated DVDs — enough to make him very unpopular indeed with the people who had hoped to profit from their sale. 
While the pressure from Washington has been reflected in a sharp rise in police raids over the past year on optical disc plants and warehouses — the backbone of the counterfeiting industry — the number of pirate optical disc production lines in Russia has doubled over the past two years. 
In Russia, there are 50 licensed factories housing a total of 60 DVD and 68 CD production lines, with a maximum capacity of 800 million discs per year. Zemchenko estimates 90 percent produce both licensed and pirate discs loaded with music, films and software. 
This huge capacity, combined with gaps in Russia’s copyright law and corruption among beat cops and movie hall staff alike, make Zemchenko’s 10-day limit a tough challenge. 
In the case of “The Da Vinci Code,” the first version to appear was a tryapka, or rag — Russian slang for the low-fi copies shot on camcorder directly in the cinema. Despite warnings shown before screenings, Russia’s copyright law doesn’t bar the practice.
The later, high-quality copy was made from the original 35-millimeter film using a telecine machine — the expensive equipment used by television studios to convert film onto video, DVD or computer files. Assuming the film can be covertly removed from the cinema to one of the 20 telecine machines in Moscow, there are no clauses in the copyright law that make the process of copying a motion picture to disc any harder than photocopying a newspaper.

TITLE: G8 Gains Limited For Local Business
AUTHOR: By Anna Shcherbakova
TEXT: Limited edition bottles of ‘G8 vodka,’ may be one of the best business ideas to emerge in the run up to the G8 summit taking place in St. Petersburg July 15-17. 
The medium-sized Russian firm produced the vodka at its own risk, gaining wide publicity plus an order from the Ministry of Foreign Affairs. 
I haven’t heard of any other companies making such successful business on the meeting of the world’s most powerful eight people, preparing to spend three days in the hometown of one of them. 
Certainly there are the hotels, where teams of advisers and journalists will stay. (The leaders themselves will reside in Strelna, in the southern outskirts on the site of the Constantin Palace, restored for the city’s 300th anniversary.) There are also restaurants and bars where all these people will eat and drink. There are the taxis and boats that will ferry them about, stopping to buy matrushka dolls and other Russian souvenirs at street vendors around town. But it makes no difference for these businesses if their clients are a pack of big bosses or just regular tourists. 
Tourism in St. Petersburg is growing but not with any great creativity. The average American or European holiday-makers visit one large museum (the Hermitage or the Russian museum), a couple of suburban palaces and might have room for a ballet for dessert. 
The romantic era of rooftop excursions is at an end. According to one entrepreneur, who had, several years ago, offered such tours, the entrance to most buildings is off-limits for strangers and many attics have been converted into swish mansards. Entrepreneurial spirit was earlier quite visibly in existence. In the late 1980s and early 1990s a very sophisticated street orchestra met tourists at the Peter-and-Paul Fortress. It had a scout, who’d listen out for the language being spoken by the newly arrived tourists, then run (it was before mobile phones) to the musicians who’d greet the group with the national hymn of their motherland. No doubt they got a decent tip for such a stunt. 
I do not know many businesses that have gained from the G8 summit, but I know that many of them will suffer because of it. For example, companies that serve Russian tourists traveling aboard — over several days the international airport will only be open for official delegations, so that other passengers will need to travel by train or bus to Moscow or Tampere, then fly from there. Cruise and cargo ships will need to change their schedules because the Gulf of Finland will be closed throughout the summit, too. 
As city traffic comes to a standstill, ATM machines will run out of cash, gas stations of fuel and shops of goods. In contrast to the entrepreneurs, almost everything done by city officials is devoted to the G8 summit, especially road works, which seem to be going on everywhere. Certainly it’s time for many city streets to undergo repair, but is has nothing to do with the arrival of such distinguished guests.  Are presidents bothered if Moskovsky prospekt’s pavements are perfectly flat?

TITLE: The Case for Energy Cooperation
AUTHOR: By William Burns
TEXT: In less than a month the Group of Eight will convene for a summit in St. Petersburg, and energy security will loom large on the summit’s agenda. Never has there been a moment when the issue of energy has been more important to the future of the global economy and global security. Never has there been a moment when Russia’s role in that energy future has mattered more. Never has there been a better moment to revitalize the U.S.-Russian energy partnership. And never has there been a better moment than the St. Petersburg summit for Russia to paint a compelling picture of its vision and reliability as an energy producer.
Russia is already a world-class energy player. The only issue is how Russia will choose to take advantage of the opportunities before it and overcome some significant challenges along the road ahead. All of us have a stake in Russia’s success, but it is Russia and its people who stand to gain the most.
Russia’s oil and gas sector faces two broad kinds of challenges: getting its hydrocarbons out of the ground, and then efficiently delivering them to the market.
Getting the hydrocarbons out of the ground will cost a lot. The Russian energy sector will need billions of dollars in investment in the medium term. Much of that capital and know-how exists in Russia; but attracting foreign capital and additional specialized know-how will also be very important, especially in tackling increasingly complex technological challenges like the Shtokman gas field project. Both domestic and foreign investors will look carefully at the risk-return tradeoffs before they move forward and at the emergence of a clear and predictable investment framework.
Russia’s ongoing efforts to rework its energy-tax regime are a welcome step. Establishing the right incentives is important everywhere in Russia, but particularly important in the greenfield regions like Eastern Siberia, the Far East and the continental shelf. As theWest Siberian fields age, it will be hydrocarbons from these far-flung regions that will replace the lost barrels and cubic meters. Realizing the potential of these regions will depend greatly on smart and timely decisions by the Russian government to attract and hold investors. The sooner those decisions are made, the better for all of us.
Once out of the ground, the oil and gas needs to get to markets — both domestic and foreign. On the oil side, Transneft has ramped up export capacity, most notably through the expansion of the Baltic pipeline system. Bold new projects are also planned for pipelines to the Pacific Ocean and the Barents, Baltic, Black and Caspian seas. This is to say nothing of the proposed gas pipeline to China. Again, this will take a lot of capital, so it is crucial to create the right investment incentives.
It is natural that the Russian government and Russian companies are looking increasingly to overseas markets for downstream investment opportunities, and not simply as a destination for raw-material exports. We welcome this. As they expand both upstream and downstream projects, Russian firms — like firms everywhere in the world — will find that the market rewards transparency and punishes opacity. Good corporate governance and sound business practices, reinforced by everything from downstream acquisitions to IPOs, will lead to a better competitive edge, more profits, and an enduring place among the super-multinationals.
Partnership is an overused term among diplomats. But in the case of Russia, the United States and energy, the power of the argument for partnership between us is obvious. Russia is the world’s largest producer of hydrocarbons; the United States is the world’s largest consumer. We both understand that energy security has to mean security for buyers and suppliers alike — governed by the market, supported by stable and predictable regulatory and tax regimes, and shaped by a long-term vision of the need to diversify sources and transit routes. Greater energy efficiency is key. So is careful attention to the environment, as Russia demonstrated recently in its decision to reroute the planned pipeline around Lake Baikal. A steady and open transition to market pricing, including among Russia’s neighbors, is a natural step. Expansion of liquefied natural gas infrastructure worldwide is in both our interests. And we both have a deep interest in expanding alternatives to hydrocarbons, especially in civilian nuclear energy, where the United States and Russia have both unique historical responsibilities for leadership and unmatched technological capabilities.
There is already a solid, practical basis for a Russia-U.S. energy partnership. ExxonMobil’s leadership of the Sakhalin I project has been a remarkable success for both our countries. So has the partnership between LUKoil and ConocoPhillips. Chevron has a significant stake in the Caspian Pipeline Consortium, whose early expansion will bring substantial benefits to Russia and all the partners in the CPC. Russian companies are investing in valuable partnerships in the United States in areas like energy efficiency and hydrogen. A genuine two-way street is beginning to emerge.
In energy, as in many other areas in our relationship, the United States and Russia have a great deal more to gain by working together than by working apart. That does not mean that we will always agree, or that there won’t sometimes be elements of competition between us. We have obviously both had our share of disappointments and frustrations with each other. But next month’s G8 summit in St. Petersburg, as well as the bilateral summit between Presidents Vladimir Putin and George W. Bush that will precede it, is a rare opportunity to reinforce the common ground between us on energy. It is an opportunity to put real substance into our energy relationship, so that dialogue is underpinned by expanding commerce and investment in both directions. And it is an opportunity for Russia and the United States to demonstrate that “energy security” is not just another slogan, but a product of responsible partnership.

William Burns is the U.S. ambassador to Russia.

TITLE: Big Deals Go Better With a Personal Pitch
TEXT: If you want to do business in Russia, think banya. Success in Russia depends on learning the bathhouse rules. Unfortunately for Alexei Mordashov, chairman and owner of Severstal Group, Europe also has its own rules. And for all the focus on Lakshmi Mittal’s Indian roots, he proved his British citizenship counts for more than just a passport — it is a mindset.
Mittal saw that European steel giant Arcelor was 81.5 percent owned by investors — people looking to earn cash quickly and transparently. His offer, labeled hostile by Arcelor management, was addressed to those who own the company. Mittal bet the investors would be able to defend their ownership rights against the board of directors.
Mordashov picked the Russian way. While Mittal’s offer was public from the beginning, Mordashov held talks with company executives behind closed doors. In true oligarch fashion, he did not even chair the talks personally, leaving those details to two Severstal vice presidents. When Mordashov’s bid was announced, it was billed as a done deal that would make him the most influential player in the world’s biggest steelmaker.
Naturally, that raised questions. But Mordashov was never around to answer them. Alhough it was clear the shareholders would have the final say, all evidence is that Mordashov laid low while continuing to send deputies to deal with queries. During a press junket to his steel plants in Cherepovets, Mordashov appeared for only the final 30 minutes of a news conference at the end of the one-day trip.
In the meantime, Mittal was everywhere. He gave frequent interviews and met, wined and dined shareholders. The shareholders said they sought more cash and better value. Mittal answered in word and deed. 
Confusingly, Mordashov reacted by deleting the cash element in his second, supposedly improved offer. Mittal invoked negative stereotypes about Russian business against Mordashov, and Mordashov was not around to counter them.
“Tell Mr. Mordashov to come to Paris. We just don’t know who he is,” one Arcelor investor told a Moscow Times reporter. Others offered contact details for prominent PR agencies in London and Paris. Investors called for more cash, fairer voting terms and, most of all, more attention.
On June 20 — 10 days before Friday’s shareholder vote on the Severstal deal but nearly four weeks after announcing his bid — shareholders finally got to see more of Mordashov: in video clips at Severstal-Speaks.com. So much for the personal touch.

TITLE: Finding It Tough to Meet Expectations
AUTHOR: By Zaal Anjaparidze
TEXT: Supporters of Georgian President Mikheil Saakashvili may have been somewhat buoyed by the results of his meeting with President Vladimir Putin on June 13. Saakashvili and the ruling United National Movement party have seen their popularity fade since the Rose Revolution that swept them to power in 2003, so the Georgian president’s strong and emotional comments during his diplomatic fencing with Putin may have scored him some points with voters.
“I’m proud ... Georgia has long waited for a president with the courage to make any statement at any level and in any circumstances with conviction, openness and patriotism,” Giga Bokeria, a lawmaker close to Saakashvili, said following the meeting between the two presidents. Saakashvili’s approach to speaking with Putin was, indeed, drastically different from the outwardly restrained manner his predecessor, Eduard Shevardnadze, had shown in discussions with Russian leaders.
Although they likely approved of his tone, most major opposition parties, which are composed largely of former Saakashvili allies, reacted more realistically. David Zurabichvili, a member of the Democratic Front opposition party, dismissed the whole affair as mere grandstanding on Saakashvili’s part.
At the same time, those forces in Georgia more oriented toward Russia are becoming increasingly industrious, and the size of their rallies is growing. These rallies are often organized by the Justice party led by former State Security Minister Igor Giorgadze, who is now living in Moscow, and represent a cause of concern for Saakashvili. Giorgadze and his allies have openly threatened to organize a “nettle revolution” to sweep the president and his government from power.
In this sense, the nettle revolution, should it actually take place, would appear to represent just one more reflection of the increasing friction in relations between Russia and the West.
But characterizing these attitudes as strictly pro-Russian or pro-Western is an oversimplification of the situation. Among those groups leaning toward Russia are political and public figures who once fought for Georgia’s full independence from Moscow and advocated Western values. One of these is the independent forensic expert Maya Nikoleishvili, leader of the nongovernmental organization. Anti-Soros Ironically, Nikoleishvili himself used to receive grant money from a foundation run by George Soros, the U.S. philanthropist whose activities in Georgia the group now opposes.
At the heart of the return of pro-Russian and anti-Western political groupings is the failure on the part of Saakashvili’s government to fulfill many of the lavish promises it made on assuming power, including to bring the breakaway regions of South Ossetia and Abkhazia back in the fold. Saakashvili’s government also increasingly finds itself hurt by the nature of its own highly unpopular reforms, which many Georgians consider artificial imports from the West. For example, government-initiated reforms at Tbilisi State University, the country’s largest educational center, that were carried out to bring the university in line with Western standards have led to widespread staff firings. Reforms like that have turned many former Saakashvili supporters into opponents.
Whether or not the reforms will, as the government maintains, deliver positive results in the long run, the immediate result has been the aggravation of economic difficulties and a drop in living standards for many. This makes the ground more fertile for the disarmingly simple message pro-Russian politicians are preaching: Everything should revert to its previous course, including the restoration of Georgia’s territorial integrity, the reopening of Russian markets to Georgian products, the abolition of a visa regime that is highly burdensome for many Georgians and the restoration of cheaper Russian energy deliveries.
Ultimately, Saakashvili has been unable to unite the nation in the manner he promised when he came to power. In his address to a National Movement congress in December 2004, shortly after taking office, Saakashvili said those who failed to book tickets on his “train” before it moved forward were doomed to remain in the past. Time, however, has shown not only that many Georgians were unwilling to board the train, but also that many of those who did climb on have since jumped off, as they had no idea where it was heading.
Polls put the drop in Saakashvili’s popularity in stark relief with his approval ratings plummeting from the 65 to 75 percent range in early 2005 to 25 to 30 percent this April. Interestingly, even with the plunge in their popularity, Saakashvili and the National Movement both still top the ratings. Although people no longer see Saakashvili as the only possible leader, they don’t seem to have fastened onto a preferred alternative, but the popularity of tycoons like Badri Patarkatsishvili and Bidzina Ivanisshvili is on the rise.
But most people are clearly unhappy with the country’s current course. A poll conducted in April by the Georgian Institute of Polling and Marketing and commissioned by the United States’ International Republican Institute showed that 51 percent of Georgians believed the country was headed in the wrong direction, compared to 25 percent seven months ago. Only 39 percent felt the country was following the correct path, compared to 65 percent seven months ago.
What is behind the fact that one out of every two Georgians polled thought the country was headed in the wrong direction? Simply put, the higher the expectations, the greater the disappointment. An increasing number of Georgians are frustrated that the Rose Revolution has not delivered on its promises and are irritated by regular attempts on the part of the government to try to maintain the post-revolutionary euphoria. Most of those polled said the economic situation in the country and their own material well-being had either grown worse or remained unchanged following the Rose Revolution.
This has translated into some discontent with a West many Georgians see as the source of the government’s policies and, as a result, as a negative influence on their own lives. Thus, while a majority of Georgians still welcome cooperation with NATO and the West, most (71 percent) of those polled by the Georgian Institute of Social Studies and Analysis in April believed Georgia’s priority should be preserving the nation’s identity and values.
This emphasis on traditional values clearly works against Saakashvili. While the idea of a return to a Georgia operating under Russian patronage remains unpopular, so often does a leap into an uncertain pro-Western future. So, much less than a direct pro-Western or pro-Russian standoff, the roots of the present difficulties would appear to lie in a complex and painful clash of values within Georgian society over differing views of the country’s future.
Many Georgians would prefer a policy that balances moves toward a Western orientation with ties to Russia, which are still important for many Georgian families, particularly those with lower incomes that are heavily dependent on the Russian market.
Unfortunately for those poorer Georgians, Russian opinion seems to have shifted against them. According to a poll the independent Levada Center released earlier this month, 44 percent of Russians now consider Georgia an enemy of their country.

Zaal Anjaparidze is a freelance journalist based in Tbilisi.

TITLE: Wine Shelves With a Vintage Look
AUTHOR: By Masha Gessen
TEXT: My friend arrived at my dacha the other night bearing six bottles of wine. Oh joy! I had drunk my last half a glass of shiraz the night before.
“It’s as if I had brought ice cream in 1983!” she commented.
“Or toilet paper in 1978!” I echoed.
The current history-as-farce episode has Russia facing a shortage of imported alcohol. If you had said this to a person living in the Soviet Union in the 1970s or 1980s, he or she would surely have responded with a laugh, saying, “I wish I had your problems.” Sure, it is easier to forgo good wine and whisky than it is to do without toilet paper, but the remarkable thing about the current alcohol crisis is how much of the Soviet deficit era it brings back. All the hallmarks are there: the empty shelves, the stocking-up, and the purchasing by pulling strings.
At the Auchan on Ostashkovskoye Shosse, several hundred meters of shelf space sit empty. At the end of one of the long shelves (which, I can now report, are white — a fact that could not be casually observed in the past) stand several dozen bottles of plum wine of mysterious provenance. I remembered Soviet store shelves, alternately empty or covered with a row of some one thing, like plum juice in three-liter jars. I wonder if there is a plum connection.
 At the Sedmoi Kontinent on Lubyanka, it is Bordeux season. Identical bottles line all the wine shelves and fill random spaces throughout the store. The supermarket’s desire to unload the wine before it turns to grapes on July 1 is so overbearing that something stopped me from buying any.
Aromatny Mir on Prospekt Mira boasted eight sorts of wine, if you didn’t count the plum concoction — the same as at Auchan. Eight sorts of wine at a wine supermarket look pathetic. The store had that Soviet feel, dusty and lazy. The manager stood at the front, speaking on her cell phone.
“I’ve got nothing! Nothing but naked shelves! Naked!” she screamed into the phone. “A decent red?” she laughed. An idle stock boy standing nearby laughed too. “All I have is German, but I could not in good conscience recommend a German red.”
“What? Did she just wake up?” grumbled the stock boy, referring to the caller.
“At home, yes, I have a few bottles at home,” the manager continued speaking into the phone. “A respectable white.” It seemed a deal was in the making: The caller was taking what she could get, likely paying whatever she was told.
“You must be losing money,” I said to the manager when she got off the phone.
“It’s staggering,” the manager sighed. My meager purchase was clearly not going to bail her out: I was holding the store’s last bottle of shiraz (California — not a place famous for its shiraz, but what choice did I have) and two packs of gum. Gum and condoms were the two categories in which the store still had ample inventory.
So what’s going on? As you probably know by now, the Cabinet decided to require new tax seals on all imported alcohol because the market in counterfeit seals was getting too hot. The changeover date is July 1, by which time importers have to unload their inventories: new seals cannot be pasted on old bottles. But no new seals have been printed — apparently because the Cabinet dragged its heels on passing the relevant resolution — so the imported-alcohol market is going to shut down completely in three days.
But I have my one bottle of Californian shiraz plus the six bottles my friend brought (one is a Romanian rose — a risky choice that promises a new experience). And a friend of a friend, a wine critic who gets a few cases of this and that for personal use, has set six bottles aside for me. It’s all white, but I can’t be choosy.

Masha Gessen is a Moscow journalist.

TITLE: Insanity Defense
AUTHOR: By Chris Floyd
TEXT: That the United States, once touted as the “world’s greatest democracy,” is now ruled by a presidential dictatorship is a fact beyond any serious dispute. Indeed, except for a bare majority in the Supreme Court — which will disappear with the retirement or demise of the aging Justice John Paul Stevens, who wrote the Court’s stinging rejection of Bush’s kangaroo military tribunals this week — the nation’s political establishment seems to have accepted this revolutionary system with remarkable docility, even as its lineaments are further exposed week by week. The Bush Administration no longer bothers to hide the novel theory of government upon which its rule is based, but declares it openly, in court, in Congress, everywhere.
The theory holds that the president has the arbitrary right to ignore any law that he feels is an unconstitutional infringement of his power — and a law is automatically unconstitutional if the president feels it infringes on his power. This neatly squared circle makes Congress irrelevant and removes the judiciary from the loop altogether. Thus, the only effective instrument of power left in the land is the “unitary executive”: the fancy modern name that the legal minions of President George W. Bush have given to the ancient concept of “tyranny.”
The true nature of this presidential dictatorship has been laid bare in a harrowing new book from reporter Ron Suskind, “The One Percent Doctrine.” Suskind, who once coaxed the regime’s defining ethos from an arrogant Bushist — “We’re an empire now, and when we act, we create our own reality” — paints a portrait of an administration drunk on lawless power, a junta operated from the shadows by the grim and literally heart-dead husk called Vice President Dick Cheney and his long-time companion in skulduggery, Defense Secretary Don Rumsfeld.
As Suskind notes, it was Cheney who enunciated the certifiably paranoid principle that governs the regime’s behavior: If there is even a 1 percent chance that some state or group might do serious harm to the United States, then America must respond as if that threat were a certainty — with full force, pre-emptively. Facts, truth, law are unimportant; the only thing that matters is the projection of unchallengeable power. “It’s not about our analysis, or finding a preponderance of evidence,” Cheney said. “It’s about our response.”
This is plainly madness. Whether the insanity of the “doctrine” is genuine — i.e., a pathological panic reaction by gutless, pampered fat-cats scared of the slightest murmur from the dusky tribes out there, beyond the iron gates and razor wire of privilege — or if, more likely, it is simply the chosen rationalization for a gang of predators tired of the few restraints that constitutional government has placed on their lust for loot and domination, the end result is the same: The most powerful country in the history of the world is being run by moral degenerates in thrall to a lunatic policy.
Suskind’s book is full of chilling passages, such as one about the pointless tortures inflicted, at Bush’s explicit suggestion, on Abu Zubaydah, a mentally ill al-Qaida flunky. His capture in March 2002 was trumpeted as a “major victory” in the war on terror, the bagging of a “top terrorist operative.” But interrogators quickly realized that he was just a low-level factotum with multiple personality disorder and no knowledge of al-Qaida operations or strategy.
So the administration had to create another reality. Told that Zubaydah had revealed nothing of value under ordinary interrogation, Bush first whined to CIA boss George Tenet (“You’re not gonna make me lose face on this, are ya?”), then pointedly asked: “So, do these harsh techniques work?” He was referring to the “torture memos” drawn up at his order by the White House legal team — Machiavellian documents which declared that anything less than deliberate murder or permanent maiming should no longer be regarded as torture, The Washington Post reports.
Bush’s sinister nod and wink were clearly understood. The wretched Zubaydah was “waterboarded,” beaten repeatedly and threatened with death. He was battered with white noise and deprived of sleep, and his medication was taken away. His broken mind snapped completely. He began spewing out whatever his tormentors wanted to hear, fantastic tales of plots aimed at targets all over America — meat for countless “terror alerts” whenever the political situation called for a nice, juicy scare to goose the rubes. 
But perhaps the most revealing moment in Suskind’s book is a brief vignette that captures the quintessence of Bush’s callous disregard for the American people — and the regime’s strange, preternatural calm in the face of imminent attack. In August 2001, while Bush dawdled on his Texas dude ranch, the entire national security system was, in Tenet’s words, “blinking red” in expectation of a major terrorist strike. On Aug. 6, a CIA official brought the infamous “Bin Laden Determined to Strike in U.S.” memo to Crawford and read it out personally to the president. In response, he got nothing but a snide dismissal: “All right, you’ve covered your ass now.” 
That was it. Bush had nothing else to say about this stark threat of impending slaughter. He had no questions, no advice, no commands — just smirking contempt. Even if we give Bush every benefit of the doubt, even if we put the most charitable construction possible on his behavior, the very best you could say of his reaction is that it represents a blood-curdling degree of depraved indifference and criminal negligence worthy of Nero. 
Beyond this “best-case” scenario, you tumble into an abyss of ever-darker implications, a deep murk that may never be dispelled. But what we know, what is plain as day, is bad enough: Tyranny has come — aggressive, remorseless, murderous, mad.

TITLE: Film Piracy Saga Is Pure Hollywood
AUTHOR: By Richard Verrier
PUBLISHER: The Los Angeles Times
TEXT: A distributor believes her movies are being counterfeited. She writes a script, finds actors, hires a gumshoe and tracks down a suspect.
LOS ANGELES — After six months on the trail of a suspected Russian pirate, Joan Borsten was closing in.
She had staked out the scruffy-looking young man she thought was strangling her film distribution business. Now he was in her sights. Borsten peered out through the curtained windows of a minivan as a private eye she’d hired snapped photographs using a telephoto lens.
Click. The suspected pirate appears with a customer (actually a friend of Borsten’s) who’d just bought 80 counterfeited DVDs of titles Borsten owns.
Click. The buyer and the seller shake hands.
Click. The target jumps into his BMW sport utility vehicle and drives off.
Could it be that he was getting away?
What happened next was the culmination of Borsten’s tireless crusade to save her Malibu, California-based film distribution business from a suspected piracy ring with ties to Russia. With the help of a detective named Jake, an actress playing “Natalya” and Oleg Vidov, Borsten’s real-life husband, who was once known as the Robert Redford of Soviet-era cinema, this 58-year-old grandmother masterminded an amateur sting operation.
“I don’t think he had any idea of who he was going up against,” Vidov said of the man they believed was running the piracy ring. “She is a street fighter.”
Major Hollywood studios aren’t the only victims of movie piracy. Ask the owners of southern California’s many small production and distribution companies, and they’ll tell you their very survival depends on curbing counterfeiting. But saying it needs to be stopped is one thing. Doing it is another.
That’s what sets Borsten apart. The Santa Monica native is a short, spirited woman who is fluent in five languages and harbors a passion for Russian fairy tales.
She and her husband used their actor friends and their knowledge of the Russian emigre community to infiltrate a world that often confounds even Hollywood’s anti-piracy agency, the Motion Picture Association of America.
Borsten owns the international distribution rights to a library of 1,200 Russian animated films, including “Little Locomotive From Romashkovo,” “Tale About Tsar Sultan” and “Vasila the Beautiful.” She sells DVDs of these titles to small specialty stores that serve Russian communities around the United States.
But in December, she noticed a sudden drop in Los Angeles-area orders to her company, Films by Jove. Worried, Borsten visited a bookstore in Studio City, a Los Angeles neighborhood, and posed as an American woman buying cartoons for her adopted Russian grandchild. She found half a dozen pirated versions of Films by Jove videos, including one of her favorites, “Nu Pogodi,” a Tom and Jerry-type series.
The videos appeared to be homemade. Each had the same make of case, photocopied color inserts and poor picture and sound quality. They sold for $10 each, about half the normal retail price.
“I was shocked. There was no way that we were going to sit back and lose the second-largest market in the U.S. to a pirate operating out of a Hollywood pick house,” Borsten said, using the industry lingo for a piracy operation. “I had to get to the bottom of it.”
It wasn’t the first time Borsten and Vidov had taken action to protect their business. During the last decade, they’ve been involved in numerous legal battles to protect copyrights on their film library, which includes a Russian-made feature-length version of Rudyard Kipling’s “The Jungle Book” and a series of animated folk tales with the voices of American, French and Spanish stars.
First, Borsten asked a Russian friend to visit other Russian video shops and bookstores in West Hollywood and the San Fernando Valley. The woman bought several bootleg videos of Film by Jove titles and reported that store owners had told her to come back in a few weeks, when they would receive a new supply.
Borsten suspected that the stores were buying from a single supplier. Next, she had to find him.
So she and Vidov, who is also her business partner, wrote a script featuring a character called Natalya, who is described in court records as an “unscrupulous hard-edged businesswoman looking for bootleg tapes at the cheapest possible price.”
Vidov put out the word among Russian actors he knew and soon found an actress who was perfect for the part: “She has a really good range. She can play a peasant woman or a princess.” And this “was the best role in Hollywood.”
Embracing the role, “Natalya” chatted up store owners and soon came up with a cell phone number of the supplier of illicit cartoons. His name was Dmitry. Storeowners said he was importing pirated movies direct from Moscow’s Gorbushka music and video market.
Next, Natalya called Dmitry. She said she and her husband, “Andrei,” were opening a Russian video store in Palo Alto and wanted to buy some cheap DVDs. Dmitry agreed to meet with Andrei (in actuality another friend of Borsten’s) in the parking lot of a restaurant in Hollywood.
Dmitry popped the rear hatch of his black BMW, revealing six cartons containing CDs and DVDs. He also handed Andrei a catalog of about 5,000 movies, including not only many Films by Jove titles, but also such mainstream Hollywood fare as “Shrek” and “Basic Instinct 2,” according to a declaration filed in court.
The merchandise looked suspect to Andrei. There were no liner notes or labels identifying the name or address of the distributors. When Andrei complained that they weren’t wrapped, Dmitry suggested he buy a machine and wrap them himself. Andrei bought 80 of the DVDs for $400.
Borsten was close, but not close enough. She still lacked the suspected pirate’s last name and business address.
So she turned to Jake “Spy4hire” Schmidt, a veteran Hollywood private investigator and owner of Clandestine Investigation Agency. She had hired the stocky former U.S. Army intelligence analyst once before in connection with another piracy case.
Film piracy isn’t his specialty; he’s more used to tracking down cheating Hollywood spouses.
But Schmidt liked Borsten: “She’s an honest, hard-working lady who pays her bills on time.” And besides, “She gets caught up in the intrigue of it all.”
When Borsten got a tip from a client that Dmitry was operating out of an office in Hollywood, she notified Schmidt. He drove by the office and saw a sign on the door: Europe Plus Russia.
Schmidt also ran a check on Dmitry’s license plate and got a last name: Fayerman.
Borsten wanted to make sure it all added up. She checked city records and found that a Dmitry Fayerman, 36, had a business license for Europe Plus Russia at the same address.
The man posing as Natalya’s husband (whose real name is Andre Violentyev) set up another buy, this one at Fayerman’s office. Schmidt and Borsten parked the minivan and waited.
Violentyev later stated in a sworn declaration that in the midst of the transaction, Fayerman explained that “legal” DVDs would have cost him a lot more.
Fayerman left in his BMW, and Schmidt and Borsten tailed him. But after a few minutes, they lost him in traffic. Schmidt was ready to give up, but Borsten would have none of it: “Just go for it, Jake.”
And five minutes later they caught up with Fayerman and followed him onto the westbound Interstate 10.
Borsten and Schmidt tailed Fayerman to the Four Points by Sheraton hotel in Culver City, an area in western Los Angeles, where Schmidt photographed him entering and then leaving half an hour later with a heavy briefcase. A clerk at the front desk told Schmidt that a flight crew from Aeroflot had recently checked in.
Two weeks later, court records state, Schmidt again spotted Fayerman at the Four Points, this time talking with someone who appeared to be a member of an Aeroflot flight crew that was staying at the hotel. The man handed over two heavy-looking bags.
“Inside the bags I could clearly make out long cylinder-type shapes, with three to four of these cylinder shapes in each bag,” Schmidt said in a declaration. “The diameter of the cylinder shapes appeared to be consistent with the size of a DVD or compact disc.”
For Borsten, things were starting to add up. A few of her clients had told her that they believed Fayerman was using smugglers to import pirated versions of DVDs manufactured in Russia.
Despite pledges by President Vladimir Putin to crack down on the problem, the number of factories that produce counterfeit DVDs and CDs and export them has ballooned from two in 1996 to 47 as of January, according to a recent report by the International Intellectual Property Alliance, a private coalition that represents U.S. copyright-based industries.
Many experts blame lax policing by the Russian government.
“They have to start enforcing their laws and busting up these optical disc manufacturers,” said U.S. State Representative Howard Berman, who thinks Russia should be required to crack down on piracy before it is allowed to join the World Trade Organization.
Berman has previously asked Borsten to testify before Congress about piracy.
“This is a bread-and-butter issue for her and other small companies like hers,” Berman said.
Armed with the fruits of her sleuthing, Borsten in May filed an $11 million federal copyright infringement suit against Fayerman and eight owners of stores she claimed had carried his goods.
Then she persuaded a judge to authorize a temporary restraining order against Fayerman and those stores and to approve the seizure of any counterfeit DVDs of her titles from his office.
On a sweltering June afternoon, five federal marshals pulled up outside Europe Plus Russia. Schmidt, Borsten attorney Jeffrey Miles and two court-appointed Russian interpreters — who had been waiting across the street in a Russian cafe — joined the marshals as they confronted Fayerman. Borsten later joined them.
Served with the court order, a flustered Fayerman led the whole group into two stuffy rooms crammed floor to ceiling with DVDs and CDs and a plastic shrink-wrap machine.
Fayerman paced back and forth as the interpreters went through his merchandise, checking titles against those in the Films by Jove catalog. In addition to such Hollywood fare as “The Incredibles” and “Polar Express,” they found 250 counterfeit DVDs of animated films only Borsten has the rights to sell in the United States.
“I don’t know what to say,” she said as she helped her lawyer pack up evidence. “We’re finding stuff here that we didn’t expect to find. I’m kind of overwhelmed.”
Fayerman denied he had done anything wrong, and no criminal charges have been filed.
“I don’t know about all this because I’m a legal company,” he told a reporter who witnessed the raid.
But a few days later, Fayerman failed to appear at a U.S. District Court hearing to contest the restraining order. Then, last week, in a confidential settlement of Borsten’s lawsuit, he agreed to pay her an undisclosed amount to cover her losses.
Fayerman acknowledged last week that he was wrong to sell copies of Borsten’s titles, though he said he was unaware that she had the U.S. distribution rights. Speaking in broken English, he said, “I make settlement. I’ve gone out of business.”
The offices of Europe Plus Russia have been emptied.
Borsten doesn’t kid herself that her problems are over. In her experience, even when you triumph over one pirate, another one eventually comes to take their place. But when that happens, she’ll be ready.
“I think we won a major skirmish,” she said, “but there’s still a bigger battle to be won.”

TITLE: Presidential Rivals Refuse Defeat in Mexico
AUTHOR: By Lisa J. Adams
PUBLISHER: The Associated Press
TEXT: MEXICO CITY — Two bitter rivals declared themselves Mexico’s next president Monday, sparking fears of violence as electoral officials said they wouldn’t name a winner until a tedious vote-by-vote hand count. 
The two were separated by fewer than half a million votes with more than 36 million counted in a preliminary tally by electoral officials. The conservative, Felipe Calderon, had 36.53 percent to leftist Andres Manuel Lopez Obrador’s 35.44 percent, according to results from 94.83 percent of polling places.
But the Federal Electoral Institute stressed those results were not final — and said it would not declare a victor until an official count it was not even starting until Wednesday was completed.
In the meantime, both candidates declared victory, raising questions about their pledges to respect an electoral process in which Mexicans invested hundreds of millions of dollars to overcome decades of systematic fraud.
“We have no doubt that we have won the presidential election,” Calderon told supporters.
“Smile: We’ve already won,” Lopez Obrador told his supporters.
On Monday morning, Lopez Obrador raised questions about the tallying and said his party’s polls showed him winning by 500,000 votes. In an appearance on the Televisa network, he did not rule out calling protests, but said he wanted to gather the facts first.
“Have patience,” he told backers. “We are going to be keeping our supporters informed. We are always going to act responsibly. If we lose the elections I will recognize that. But if we won the vote, I’m going to defend my triumph.”
Calderon, appearing on the same network, said preliminary results showed that he had won.
“They give me a very, very clear victory,” he said.
Early Monday, Lopez Obrador’s web site showed an animated cartoon version of him climbing to Olympic-style winner’s podium and donning the red, white and green presidential sash. Calderon’s web site showed a photo of him in front of a large, applauding crowd, overlaid with a headline reading “Felipe Calderon, President of Mexico.”
A drawn-out period of uncertainty could affect financial markets and unsettle Mexico’s maturing democracy.
Tensions were already running high after a two-year campaign marked by vicious personal attacks. Calderon painted Lopez Obrador as a radical leftist who would ruin the economy, while Lopez Obrador called Calderon a liar who doled out million-dollar favors to a brother-in-law while serving as energy secretary.
The campaign exposed Mexico’s deep class divisions, with Lopez Obrador of the Democratic Revolution Party pledging to govern for the poor and Calderon of the ruling National Action Party seen by many as the candidate of the rich.
Many feared the close result could cause the tensions to explode.
For decades, elections were rigged to ensure the ruling party’s victory — fraud that allegedly included the 1988 presidential count in which a computer crash was blamed for a stunning turnaround that ensured another six years in power for the Institutional Revolutionary Party, or PRI.
Many members of Democratic Revolution regret not fighting harder to challenge the loss of leftist Cuauhtemoc Cardenas, who went on to found their party.
“This is no longer the era of fraud, because the people will not accept it. It is no longer ‘88,” Lopez Obrador said Sunday night. 
In part because of outrage over the 1988 elections, PRI was defeated in 2000 after 71 years in power, and sank to a distant third Sunday. 
President Vicente Fox, who finishes his single six-year term in December, appealed for patience and calm, saying: “It is the responsibility of all of the political actors to follow the law and respect the time the institute needs to announce the election results.” 
U.S. Ambassador Antonio Garza, who served as an election observer in a poor Mexico City neighborhood Sunday, said he was “convinced Mexicans will wait patiently and prudently as the Federal Electoral Institute reviews today’s voting records.” 
Some voters said they had no problem waiting because they were convinced the official results would confirm their candidate’s victory. 
“Now we just have to wait for them to officially confirm Felipe’s victory,” said Marcela Chavez, 25, a Calderon supporter. “The tendency is clear and he is going to win.”

TITLE: Belgium Mourns 2nd Strangled School Girl
PUBLISHER: Agence France Presse
TEXT: LIEGE, Belgium — Belgium mourned seven-year-old Stacy Lemmens, found strangled with another school girl three weeks after they vanished, as investigators awaited DNA test results to home in on their killer. 
In rare television scenes harking back to the Marc Dutroux paedophile murders in the 1990s, which indelibly marked the country, national stations broadcast Stacy’s funeral service live from the eastern city of Liege.
The bodies of Stacy and 10-year-old Nathalie Mahy were found last Wednesday at a storm water drain on a patch of ground a few hundred meters from where they went missing late on the night of June 9 during a street party.
Nathalie, who had been raped, was buried in a private service on Saturday.
A smattering of polite applause echoed from a small crowd, as Stacy’s body was taken from a local funeral parlor and placed in a white flower-laden hearse which rolled off at walking pace toward Liege’s Saint-Foy church.
Images usually reserved for heads of state showed people arriving there slowly, including public figures and relatives of children who were Dutroux’s victims a decade ago.
Some 500 people watched proceedings on a giant screen in a nearby carpark.
Inside the church, the families of her father and mother, separated some time ago, were brought together again before Stacy’s small, white coffin, which was covered with flowers and stuffed toys.
“We are here at the side of the family and we are waiting now for justice to be done as quickly as possible,” said Liege mayor Willy Demeyer.
After the service, a convoy of motorcycles — ridden by friends of Stacy’s father — escorted her to a cemetery on the outskirts of the city, where she was to be buried away from the cameras.
Children holding seven balloons each were to release them into the sky.
Stacy’s funeral comes as investigators await the results of DNA and other tests on the bodies of the girls, who lived together but were not blood relatives, before again questioning a suspect held over their killings.
Abdellah Ait Oud, a 38-year-old Moroccan — the only suspect identified so far — turned himself in to police three days after the girls disappeared.
He denies any involvement in the crimes.
But prosecutors, while acknowledging last week that they had no firm evidence against him, have maintained that his actions were suspicious and that he had “scratches” on his face when he finally turned himself in.

TITLE: 34 Dead as Metro Carriages Overturn in Eastern Spain
AUTHOR: By Ana Perez
PUBLISHER: Reuters
TEXT: VALENCIA, Spain — At least 34 people were killed and more than 20 seriously injured on Monday when a speeding underground train ran off the tracks and overturned in the eastern Spanish city of Valencia, officials said. 
Two train carriages overturned in the tunnel just before entering the Jesus Metro station, apparently after a wheel broke on a curve, officials said. About 150 people were evacuated from the station platform. Officials ruled out a terror attack in a country still shaky from train bombings by Islamist militants that killed 191 people in Madrid in 2004.
The accident took place days before Pope Benedict was due to visit Valencia for the World Meeting of Families and pilgrims are already arriving in the Mediterranean seaside city.
“It seems this unfortunate accident was caused by excess speed and a wheel breaking just before it entered the station,” government official Luis Felipe Martinez told Spanish radio, adding that the number of dead was still not confirmed. A senior police officer at the scene said 34 people had been killed.
Police sealed off streets outside the station and crowds watched under bright blue skies as emergency crews rushed injured people into ranks of ambulances.
One woman, her face blackened by what looked like soot, grimaced with pain as she walked with her arm around a police officer.
Emergency services set up two field hospitals in tents on the street and a judge arrived to supervise the removal of bodies. Hospitals appealed for blood donors.

TITLE: Warner Makes Super Return
AUTHOR: By Mary Milliken
PUBLISHER: Reuters
TEXT: LOS ANGELES, California — “Superman Returns” leapt in a single bound to the front of the box office in its first weekend, but the man of steel found the iron women of “The Devil Wears Prada” standing next in line with a dazzling debut. 
 The Warner Bros. Pictures’ big-budget comic book adventure, starring newcomer Brandon Routh, generated $52 million in receipts Friday through Sunday, grossing $84 million in its first five days, according to studio estimates released on Sunday.
“That is the largest five-day opening in Warner history,” said Dan Fellman, president of Warner’s domestic distribution. But “Superman Returns” came in behind last year’s pre-4th of July weekend winner, Paramount’s “War of the Worlds,” which pulled in $100 million in its first five days.
“We are going to do about $110 million” in the first seven days, Fellman added. “This is a very big opening for us.”
With superhero films all the rage in recent years, the $200 million movie’s launch bodes well for the studio’s bid to rekindle a marque movie franchise that all but died in 1987 after the last “Superman” film flopped.Warner, a unit of Time Warner Inc., needed a hit after the $160 million maritime disaster movie “Poseidon” flopped at the box office this spring. Analysts predict a good Superman showing could lift Time Warner’s sagging stock.

TITLE: NASA Shuttle Stuffed With Safety Measures
AUTHOR: By Irene Klotz
PUBLISHER: Reuters
TEXT: CAPE CANAVERAL, Florida — The destruction of the U.S. space shuttle Columbia in 2003 not only spurred NASA to figure out a way to save a stranded space shuttle crew, but also how to get their damaged ship back home. 
The key is aboard space shuttle Discovery, which now scheduled for launch at 2:38 p.m. (local time) on Tuesday from the Kennedy Space Center in Florida after two weather-related delays over the weekend.
Among the two tons of cargo the shuttle will be toting to the International Space Station is a set of cables that could be used to hot-wire a shuttle so it can be remotely controlled to leave orbit and land without a crew aboard.
NASA developed the system after the Columbia crew died aboard their damaged ship in February 2003. The shuttle had been struck by falling foam insulation from the ship’s fuel tank during liftoff, but NASA did not realize the impact critically damaged the shuttle’s heat shield until after the spacecraft broke apart during a landing attempt.
In addition to fixing the fuel tank in an attempt to cut down on falling debris, engineers developed in-flight inspection techniques and outfitted the space station as an orbital haven where a shuttle crew could await rescue if their ship was too damaged to carry them home.
But the U.S. space agency doesn’t want to abandon a $2 billion spaceship either. Nor does it want the shuttle to return unguided through Earth’s atmosphere and possibly crash down in populated areas.
“The one thing we’re not going to do is put a dead orbiter out into space to just fall where it may,” said John Shannon, the deputy space shuttle program manager.
The cables aboard Discovery, which will be stowed on the station in case they are ever needed, would enable a shuttle crew to wire the ship’s electronic components so ground controllers could handle the tasks normally tackled by astronauts.
Among the systems that would need to be hard-wired are the latches that lock the shuttle to the station; the shuttle’s landing gear and the parachute that slows the ship during touchdown.

TITLE: Saddam’s Daughter Is ‘A Guest’
PUBLISHER: Reuters
TEXT: AMMAN — Jordan said on Monday that Saddam Hussein’s eldest daughter Raghd and her children were guests of the royal family and did not engage in any political activities. 
Iraq on Sunday put Raghd on the 41 “most wanted” list, along with her mother Sajida and top Baathists and al Qaeda leaders. She was accused of using millions stolen by the former Iraqi leader to finance Sunni insurgents.
Prime Minister Marouf Bakheet was quoted in local papers as saying Raghd, who had been granted asylum by King Abdullah in 2003 after she fled with her sister to Jordan after the U.S. invasion of Iraq, was living in Jordan for “humanitarian reasons.”
“She does not engage in any political or media activities. Mrs. Raghd Saddam and her children are guests of the Hashemites,” Bakheet said.
A palace official said the asylum offer by the pro-Western monarch was a traditional gesture of Arab hospitality.
Raghd has taken a leading role in organizing her father’s legal defense in his trial for crimes against humanity. But officials say Raghd had abided by a request not to use Jordan as a platform to make political statements to the media.
Iraq’s National Security Adviser Mowaffaq al-Rubaie, who disclosed the list in a televised news conference, declined to say if arrest warrants had been issued for Raghd and her mother but said Interpol had received the list.
According to a Qatari official who declined to be named, Saddam’s wife Sajida is currently living in Doha although the Qatari government, which has hosted several controversial figures in the past, has made no official comment.

TITLE: Palestinian Militants Deliver Ultimatum
AUTHOR: By Nidal al-Mughrabi
PUBLISHER: Reuters
TEXT: BEIT HANOUN, Gaza Strip — Palestinian militants who abducted an Israeli soldier gave Israel less than 24 hours on Monday to meet their demands to release Palestinian prisoners, threatening unspecified consequences if it refused. 
Israeli Prime Minister Ehud Olmert rejected the ultimatum and his defense chief said Israel would “know how to reach everyone responsible” if Corporal Gilad Shalit was harmed.
“If the enemy does not agree to our humanitarian demands ... we will regard this case as closed,” said a military communique, issued by the armed wing of the governing Hamas movement and two other factions.
“We give the Zionist enemy until 6 a.m. [local time] tomorrow, Tuesday, the fourth of July,” the statement said.
In a previous communique the groups called on Israel, as a first stage, to release some 400 Palestinian women and youths in its prisons in return for information about Shalit, abducted in a June 25 raid launched from Gaza.
The groups — Hamas’ Izz el-Deen al-Qassam Brigades, the Popular Resistance Committees and the previously unknown Islamic Army — subsequently demanded Israel free 1,000 Palestinian prisoners.
Unless the demands were met, the factions said, “the enemy will bear full responsibility for future consequences.”
The statement accused Israel, mounting an offensive in Gaza, of bad faith in an Egyptian mediation effort to end the crisis.
“The government of Israel will not yield to the extortion of the Palestinian Authority and the Hamas government, which are led by murderous terrorist organizations,” Olmert’s office said in a statement.
“We will not conduct any negotiations on a prisoner release,” it said. “The Palestinian Authority bears full responsibility for the well-being of Gilad Shalit and his return, safe and sound, to Israel.”
Israel, which pulled out of Gaza last year, sent troops and tanks into the southern Gaza Strip last Wednesday after gunmen seized Shalit, a 19-year-old tank gunner in a raid in which two other soldiers and two of the attackers were killed.
Hours before the militants’ communique Israeli tanks and armored bulldozers pushed into the northern Gaza Strip in what an Israeli military source described as a “pinpoint operation” to locate tunnels and explosives near the border fence.
“This is not a massive ground entrance,” the source said.
A Palestinian gunman in the area was killed by an Israeli aircraft, witnesses said. The Israeli military said it opened fire on two armed men, hitting one of them.
A Reuters reporter in the northern Gaza town of Beit Hanoun said the bulldozers appeared to be preparing the ground for a possible wider incursion into the area, used by militants as a launch site for daily rocket attacks against southern Israel.
Israeli Defense Minister Amir Peretz said the group’s headquarters in Damascus, under exiled leader Khaled Meshaal, “is the main address that bears responsibility” for the soldier’s abduction.
“I suggest to [Syrian President] Bashar Assad, who is trying to turn a blind eye, that he open his eyes, as the responsibility is at his doorstep,” Peretz said in broadcast remarks, stopping short of any direct threat of military action. 
Last week, Israeli warplanes overflew Assad’s summer palace in a sign of displeasure over his hosting of the Islamist militant group. 
Israeli aircraft have been mounting nightly attacks in the Gaza Strip, including one on Sunday that wrecked the office of Prime Minister Ismail Haniyeh. 
In the latest air strikes, a helicopter fired a missile into a building in Gaza City that the army said was used by militants. No one was hurt. Two missiles also hit areas in northern Gaza, slightly wounding one person. 
Ground forces have largely avoided clashes while Egypt pursues a diplomatic solution. Osama al-Muzaini, a Hamas political leader, said Israel had proposed releasing some prisoners at an unspecified date in return for the soldier. He said the three factions rejected the offer.

TITLE: U.K. Says ‘Goodbye Tosser’ to Sven
PUBLISHER: Reuters
TEXT: LONDON — Departing coach Sven-Goran Eriksson was subjected to a torrent of abuse on Monday as media critics put the boot in after England’s World Cup failure. 
“Swedish Flop” and “Golden Fleecer” were some of the epithets hurled in the Swede’s direction by British newspapers after England’s quarter-final defeat on penalties to Portugal in Gelsenkirchen on Saturday. 
“Goodbye Tosser,” declared the Sun newspaper under the page-top headline “End of an Error.” “He tossed away our cash, he tossed away our talent ... now he’s tossed away our World Cup dreams.” 
“He banked, he bonked and he ballsed it up,” screamed the rival Mirror tabloid as others awaited a Football Association inquest into the Eriksson years and what lessons could be learned for the future. 
Eriksson has been a regular tabloid target since he took over in 2000 as England’s first foreign coach, with his tenure accompanied by a liberal sprinkling of salacious stories about his private life. 
Two years ago he hit the front pages after an affair with former FA secretary Faria Alam. 
In January he was caught in a “Fake Sheikh” sting by a Sunday tabloid in which a journalist posing as a wealthy Arab businessman quoted Eriksson as saying he would dump England for Aston Villa. 
That same month the FA announced he would leave his post after the World Cup. 
“Ultimately incapable of blending and galvanising good players, Eriksson will not be missed,” wrote Henry Winter in the Daily Telegraph. 
“Eriksson’s regime will not deserve the sweeping brutality of many of the inquests but, rightly, it will be forever stamped ‘underachieved’,” added Matt Dickinson in the Times. 
Newspapers highlighted the amount of money the FA had paid the coach over 5 1/2 years at the helm — a sum the Sun worked out as $6.46 million for every big match won. 
“Sven-Goran Eriksson was paid 25 million pounds to vandalise a dream,” wrote the Daily Mail’s Paul Hayward.

TITLE: Brazil Slammed For ‘Playing Ugly’
AUTHOR: By Brian Homewood
PUBLISHER: Reuters
TEXT: FRANKFURT, Germany — World Player of the Year Ronaldinho and coach Carlos Alberto Parreira took the brunt of the criticism as the Brazilian media reacted angrily to their team’s World Cup quarterfinal defeat to France.
Saturday’s 1-0 loss was described as a fiasco by the Estado de Sao Paulo daily on its web site while O Globo said: “Brazil trembled again against France.”
Brazil had won 11 successive games at the World Cup finals since losing 3-0 to the same opponents in the 1998 final. 
France also knocked Brazil out of the 1986 World Cup on penalties following a 1-1 draw in the quarterfinals.
O Globo and Estado de Sao Paulo ran identical headlines which read: “Ronaldinho was the big let-down of the Cup.”
The Estado added: “He played badly, he didn’t dribble, he didn’t have a shot at goal, he misplaced passes and did not, at any moment, take responsibility.
“It was a portrait of his participation in the World Cup: apathetic, bureaucratic, mediocre and afraid of deciding.”
Parreira was slammed for being overcautious and for persisting with veteran fullbacks Cafu and Roberto Carlos.
“It was football without fun, without life, without joy, without personality, without the Brazilian way of playing,” wrote Fernando Calazans, columnist in O Globo.
The newspaper’s columnist Juca Kfoura said Parreira paid the price for abandoning Brazil’s traditional style.
“Anyone who refuses to play the Beautiful Game deserves every punishment,” he wrote. “Brazil lost playing ugly.”

TITLE: After Doping Flap, Race is On
AUTHOR: By Jamey Keaten
PUBLISHER: The Associated Press
TEXT: ESCH-SUR-ALZETTE, Luxembourg — The Tour de France sped off into neighboring Luxembourg Monday on a relatively flat second stage expected to favor sprinters. 
American George Hincapie was wearing the race leader’s yellow jersey for the first time in his 12-year career. 
At 137 miles, the route from Obernai in eastern France is the second longest of this three-week tour. It starts with two steep hills in the first 30 miles before heading onto a long stretch of flat, then dips into Luxembourg and finishes at Esch-sur-Alzette. 
The already depleted tour — after doping allegations on the eve of the race — started out one extra rider short, with Italian rider Danilo Di Luca not taking part. A total of 175 riders rode Monday. 
Judging from his early form at the first Tour of the post-Lance Armstrong era, Hincapie is emerging as a serious contender to succeed his one-time boss. 
“Everybody wants to see the replacement for Lance, but there really is no replacement for Lance,” Hincapie said Sunday. “And I don’t know if we’ll see another Lance in our lifetime.” 
On Sunday, Hincapie became the fourth American — joining seven-time winner Armstrong, three-time winner Greg LeMond and time trial specialist David Zabriskie — to take the yellow jersey. 
Hincapie made a claim for front-runner status in a race looking for favorites, after 1997 Tour winner Jan Ullrich and last year’s runner-up Ivan Basso were among nine riders forced out over doping allegations. 
Hincapie’s performance also merited a word of congratulations from Armstrong. “Lance told him he looked great in yellow,” said P.J. Rabice, spokesman for Hincapie’s Discovery Channel team. 
Hincapie, a New York native who now lives in Greenville, South Carolina, was runner-up in Saturday’s prologue by a split-second to Thor Hushovd of Norway. 
Hincapie made up for it Sunday, placing third in an intermediate sprint on the 114.6-mile stage, which under race rules shaved 2 seconds off his overall time as a bonus. It allowed him to overcome the small lead by Hushovd. 
The broad-shouldered Norwegian was injured at the end of the first stage.

TITLE: Sports Watch
TEXT: Schumi Wins in U.S.
INDIANAPOLIS, Indiana (Reuters) — Michael Schumacher won the U.S. Grand Prix on Sunday in a Ferrari one-two that slammed the brakes on Formula One world champion Fernando Alonso’s run of success. 
Schumacher’s 87th career win, from pole position and ahead of Brazilian team mate Felipe Massa, trimmed Alonso’s overall championship lead to 19 points after 10 of the season’s 18 races. 
Alonso’s fifth place finish ended a run of four wins and 15 consecutive podium finishes for the Spaniard but more significantly pumped new energy into Schumacher’s hopes of an eighth title. 
The Spaniard now has 88 points to Schumacher’s 69. 

Fred Trueman Dies
LONDON (Reuters) — Former England cricketer Fred Trueman, one of the finest fast bowlers of all time, has died at the age of 75. 
British media quoted his wife Veronica as saying he died in a Yorkshire hospital. He was diagnosed in May with lung cancer. 
In 1964, the man known as “Fiery Fred” became the first bowler to take 300 test wickets. 
“He was one of the greats,” former England captain Mike Gatting told BBC News 24. “He never bowled a bad ball. 

Sharapova Beats Frazier
LONDON (Rueters) — Maria Sharapova led the Russian charge into the fourth round at Wimbledon on Saturday with a 6-3 6-2 win over American Amy Frazier. 
The 2004 champion was one of seven Russian women to reach the third round and following the exit of fifth seed Svetlana Kuznetsova and Anna Chakvetadze on Friday, Sharapova produced a dazzling display on Centre Court. Seeking to win her second Grand Slam title, Sharapova has now reached the last 16 or better in every one of her four visits to the All England Club.

India Tops Windies
KINGSTON, Jamaica (Reuters) — India cricket captain Rahul Dravid hailed his team after they completed their first test series triumph in the Caribbean in 35 years with a 49-run victory over the West Indies in the fourth test on Sunday. After setting the West Indies a target of 269, India dismissed the hosts for 219 with eight balls left on the third day to snatch the series by a 1-0 margin. 
“It was a team effort. Everyone in the team contributed at various stages,” Dravid told reporters.  

Agassi Bows Out
LONDON (AP)  — First, a tearful Andre Agassi bowed out of Wimbledon for the final time. Then, defending women’s champion Venus Williams departed on Centre Court in a stunning Saturday at the All England Club.
By the end of the first week, only one American was left in the men’s and women’s singles at Wimbledon.
Playing in his 14th Wimbledon before retirement later this year, the 36- year-old Agassi couldn’t keep up with the relentless power hitting of 20-year-old Rafael Nadal and fell 7-6 (5) 6-2 6- 4. In a surprise, three-time champion Williams fell in three sets to Jelena Jankovic of Serbia, 7-6 (8) 4-6 6-4.

TITLE: Germany to Face Italy in Semifinal Clash
AUTHOR: By Kevin Fylan
PUBLISHER: Reuters
TEXT: BERLIN — Italy will have to do what no other team has done before and beat Germany in Dortmund on Tuesday if they are to reach the World Cup final. 
Unbeaten Germany was not considered among the favorites before the tournament, but the host nation has gone from strength to strength, winning four of its five games to set up the semifinal clash with Italy. 
Overcoming Argentina, regarded as the best team in the tournament, 4-2 on penalties has given Juergen Klinsmann’s young team a sizeable boost. 
Members of the German team, which like Italy has won the World Cup three times, were their usual confident selves in the shootout and would be comfortable with another draw and more spot kicks. 
The Italians will feel they have to win in 90 or 120 minutes and that is something no opponent has managed in 71 years of German international matches in Dortmund. 
In that time, Germany has won 13 of the 14 matches it has played there, with a 1-1 draw against Wales in 1977 the only blot on the record. 
“The Dortmund crowd is a phenomenon,” Germany midfielder Tim Borowski said this week. “The spectators will be the 12th man for us.” 
Klinsmann, who was part of the West Germany team that won the World Cup for the third time in 1990, has no injury problems and will be able to field the same team that overcame Argentina. 
Miroslav Klose, whose equalizer against Argentina was his fifth goal at this tournament, suffered a slight calf injury in the game but has recovered, according to assistant coach Joachim Loew. 
There is a question mark over the participation of midfielder Torsten Frings after FIFA said on Sunday it was investigating his role in the fracas that followed the penalty shootout against Argentina. 
Italy is looking to keep up its record of appearing in the final every 12 years since their 1970 defeat to Brazil. 
The last time the Azzurri faced the Germans in a World Cup was their 1982 final triumph over West Germany. 
Marcello Lippi’s side, which has had a relatively easy path to the last four with knockout stage wins over Australia and Ukraine, beat Germany 4-1 in a friendly in Florence on March 1 but knows that gives little clue about Tuesday’s task. 
“It will be completely different to the 4-1,” said Italy defender Gianluca Zambrotta. “That was a friendly in Italy and this is the semi-final of the World Cup in Germany. 
“They are doing very well, they have got to the semi-finals and I am sure they will want to go all the way. It is going to be a tough game for both sides,” added the full-back. 
Lippi will almost certainly be without central defender Alessandro Nesta, who is continuing to struggle with a groin injury. 
Marco Materazzi will return from suspension to replace Andrea Barzaghi alongside captain Fabio Cannavaro in the center of a defense which has conceded just one goal in five games in the tournament. 
The final will be against Portugal or France on Sunday in Berlin. 

n
Italy’s biggest sports trial resumed on Monday before a soccer tribunal in Rome’s Olympic Stadium where four top clubs and 26 officials face match-fixing charges. 
Champions Juventus, AC Milan, Fiorentina and Lazio risk being forced out of the top Serie A league and European competition if found guilty of conspiring with referees to rig matches. 
Tribunal President Cesare Ruperto, a retired judge, opened proceedings in the low ceilinged room below the home of AS Roma and Lazio with the words: “I call each defendant in turn to name their lawyer or lawyers before the tribunal.” 
The defendants, including top referees, the owner of Fiorentina Diego Della Valle and AC Milan Vice-President Adriano Galliani, sat at long tables facing the judges in a scene resembling a school classroom. 
Juventus is widely considered to be at the center of the scandal, which erupted in May when phone taps showed its former general manager Luciano Moggi discussing refereeing appointments with football federation (FIGC) officials.

TITLE: Beckham Quits As Captain
AUTHOR: By Trevor Huggins
PUBLISHER: Reuters
TEXT: BADEN BADEN, Germany — An emotional David Beckham quit on Sunday as England captain after almost six years in the wake of their World Cup quarterfinal defeat by Portugal. 
The England midfielder, on the verge of tears, read a statement announcing he would step down with the change of manager as Sven-Goran Eriksson hands over to Steve McClaren. 
Beckham said former caretaker England manager Peter Taylor had given him “the greatest honour of my career ... and fulfilling my childhood dream” by appointing him as captain in November 2000 for a friendly with Italy in Turin. 
But he continued: “I feel the time is right to pass on the armband. As we enter a new era under Steve McClaren, it has been an honor and a privilege to have captained our country and I want to stress that I wish to continue to play for England. 
“And I look forward to helping both the new captain and Steve McClaren in any way I can. 
“I came to this decision some time ago but I had hoped to announce it on the back of a successful World Cup. Sadly, that wasn’t to be.” 
Beckham had been in tears after being substituted due to injury early in the second half of Saturday’s agonising defeat by Portugal in a penalty shootout. 
“Our performance during this World Cup has not been enough to progress further and both myself and all the players regret that — and are hurt by that more than people realize,” said the 31-year-old. 
Beckham thanked the players, Taylor, Eriksson and the coaching staff for their support during his time as captain, along with the media and the England fans. 
“For me it has been an absolute honor. Finally, I have lived the dream,” Beckham said, his voice faltering with emotion. 
Paying tribute to Beckham’s spell as skipper, Eriksson told reporters: “I think David has been a very good captain. 
“He did good work always. He has been very proud of doing the job. I was a little bit disappointed when he told me his decision to finish just before he announced it. But you have to respect that and that’s it.” 
Eriksson also said that Wayne Rooney was the golden boy of English football and urged fans and the media not to savage the striker for his World Cup red card against Portugal. 
England lost their quarter-final on penalties after going down to 10 men on Saturday, a re-run of their 1998 World Cup exit following Beckham’s dismissal against Argentina. 
Beckham was vilified in the media and had an effigy of him hanged around the country in the aftermath of England’s defeat and Eriksson seemed anxious to avoid a repeat with Rooney. 
“I think you, much more than me, for the next years, need Wayne Rooney,” said Eriksson.
Rooney got his red card in the 62nd minute for stamping on the groin area of Portugal defender Ricardo Carvalho after a tussle in front of Argentine referee Horacio Elizondo. 
“So pay attention please, he is the golden boy of English football,” Eriksson said. “Don’t kill him, I beg you because you need him.”

TITLE: Car Crashes in Berlin, Fans Hurt
PUBLISHER: The Associated Press
TEXT: BERLIN — A German motorist injured at least 21 people Sunday when he drove a Volkswagen Polo through a concrete barrier that protects Berlin’s main World Cup public viewing area, police said. 
Ten of those injured were taken to area hospitals, while 11 others were treated at the scene, police spokesman Eharhart Koerting said. 
Police believe the driver may have intentionally broken through the barrier that protects the stretch of road where marches are shown on big screens to hundreds of thousands of fans, Koerting said. Few people were on the “fan mile,” however, because no matches were being played. 
Police detained both the 33-year-old driver, whose identity was not released, and a 55-year-old female passenger. 
Berlin state official Michael Donnermeyer said that a search of the vehicle turned up no explosives. 
“We were very lucky,” Donnermeyer said. 
The car went through the barrier and drove right up to the area’s main stage in front of the Brandenburg Gate.

TITLE: Portugal Wary of Reanimated France in Semifinal Standoff
PUBLISHER: The Associated Press
TEXT: MARIENFELD, Germany — Brazil or France, France or Brazil — Portuguese players knew they’d be playing a soccer heavyweight in their World Cup semifinal. 
While Portugal avoided the defending champions, it faces a France squad that is peaking at the right time. 
“We’ve been saying among ourselves here all along that France would get to the semifinals, despite their bad start,” goalkeeper Ricardo said Sunday at Portugal’s training camp. “Some said France wasn’t going to do anything, but it’s not easy to beat Brazil.” 
After Portugal beat England 3-1 in a quarterfinal shootout Saturday, the players awaited word of the outcome of the Brazil-France game as they traveled back to their training camp. France won 1-0, making this the first all-European World Cup semifinals in 24 years. 
Portugal is the only team left never to have lifted the World Cup trophy — France won in 1998 and Italy and Germany both have won three times. 
The Portuguese meet resurgent France on Wednesday in Munich. 
Forty years after they finished in third place, the Portuguese could exceed their best-ever showing. 
“Records are there to be broken,” Ricardo said. 
Portugal’s Brazilian coach Luiz Felipe Scolari stretched his World Cup unbeaten run to 12 matches — including five straight wins this year — and the Portuguese are on a 19-game unbeaten streak dating to February 2005. 
“We know it’ll be extremely difficult,” Ricardo said. “They’ve got a great team with fantastic players.” 
Scolari gave his reserves a training session but rested the players who beat England on penalties after a 0-0 draw that with extra time lasted 120 minutes. 
Captain Luis Figo and winger Cristiano Ronaldo, who complained of feeling heaviness in his right thigh after skipping training all last week with an injury, underwent special treatment. 
Scolari has stuck with Ricardo despite broad criticism of his form at his club Sporting Lisbon. The gamble paid off in Germany, especially on Saturday as Ricardo stopped three shootout shots. 
In the 2004 European Championship quarterfinals against England, he pulled his glove off to save one and scored another in a penalty shootout that sent Portugal through.