SOURCE: The St. Petersburg Times
DATE: Issue #1185 (51), Tuesday, July 11, 2006
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TITLE: Russia’s No. 1 Terrorist Killed, FSB Chief Says
AUTHOR: By Richard Balmforth
PUBLISHER: Reuters
TEXT: MOSCOW — Chechen rebel leader Shamil Basayev, Russia’s most wanted man, was killed overnight, handing a huge boost to President Vladimir Putin on Monday as he prepares to host the Group of Eight summit in St. Petersburg. 
FSB security chief Nikolai Patrushev said Basayev, who had claimed responsibility for the bloody 2004 Beslan school siege, had been about to mount an attack in southern Russia to mar the weekend G8 summit Putin will chair in St Petersburg.
Putin, whose already huge popularity at home will be further boosted by the news as he prepares to meet President Bush and other world leaders, said Basayev’s death was “deserved retribution” for his campaign of killing.
More than 331 people, half of them children, were killed in Beslan in September 2004 after Russian forces tried to end a siege of the school, which had been seized by Islamist militants linked to Chechnya’s fight for independence.
“This is deserved retribution against the bandits for our children in Beslan, in Budennovsk, for all these acts of terror they committed in Moscow and other Russian regions, including Ingushetia and Chechnya,” the Kremlin leader said in televised comments.
Budennovsk was a reference to an attack on a hospital in June 1995 — long before Putin came to power. Rebels seized hundreds of hostages in the southern town and more than 100 people died during the assault and a botched Russian commando raid.
Patrushev said Basayev, along with other Chechen fighters, was killed in an operation by special forces in Ingushetia, a region neighboring Chechnya.
“They intended to use this terrorist act to put pressure on Russia’s leadership at a time when the G8 summit was being held,” Patrushev said.
Details of how Basayev was killed were not entirely clear, nor was the role played by special forces.
TRUCK EXPLOSION
According to state television, he was killed when a truck blew up while rebels were loading it with explosives in the village of Ekazhevo. He himself was sitting in a civilian car nearby and died in the massive explosion.
“There was an enormous explosion. All those who were in a radius of the blast were blown to pieces,” Ingushetia’s interior ministry Beslan Khamkhoyev was quoted as saying by Interfax news agency.
“In the morgue there are four bodies of fighters. We calculate that the number of fighters eliminated is 10,” Khamkhoyev said. He added that the special operation had been meticulously planned.
Chechen rebel envoy Akhmed Zakayev told Ekho Moskvy radio that he doubted the official version. “I do not believe there was some operation carried out by Patrushev and his colleagues. I think this was a fatal accident,” he said by telephone from London.
The heavily-bearded Basayev, who was born in 1965, professed to be a devout Muslim. His left foot was blown off by a mine in 2000 and he wore a false one.
Interfax quoted another senior Ingushetia official as saying he had been identified by body fragments, including his head and his prothesis.
Basayev, in a television interview aired last year, justified the attack on Beslan by saying Russian civilians, including children, were legitimate targets in his homeland’s bloody fight for independence from Moscow.
“We are at war. Russians ... pay their taxes for this war, send their soldiers to this war, their priests sprinkle holy water on the soldiers,” Basayev said in his soft lilt. 
“How can they be innocent? Russians are accomplices in this war. It is just they don’t all have weapons in their hands,” he said in the interview with Britain’s Channel 4. 

(Additional reporting by Meg Clothier and Oliver Bullough)

TITLE: Russians Mourn Air Crash Victims
AUTHOR: By Mike Eckel
PUBLISHER: The Associated Press
TEXT: IRKUTSK, Russia — Flags flew at half-staff and churches held special services Monday across Russia to mark a day of mourning for the victims of a plane crash in the Siberian city of Irkutsk that killed at least 124 people and left four others missing.  
Fifty-two people remained in hospitals after the airliner careened off a rain-slicked runway into adjacent garages on Sunday and burst into flame, said Viktor Beltsov, spokesman for the Emergency Situations Ministry. Seventy-five of the 203 people aboard the plane survived, he said.
The catastrophe was the second major commercial airline crash in two months in Russia, and it was followed Monday by incidents involving three other Russian-operated planes, stoking renewed concerns about the nation’s air safety standards. No one was killed in the latest incidents.
Preliminary data gathered by the commission investigating Sunday’s crash indicated that the braking system on the Airbus A310 operated by Russian airline S7 had failed, Russian news agencies reported, citing unnamed sources.
Transport Minister Igor Levitin said the aircraft’s flight and data recorders had been recovered and were being analyzed.
The S7 press office said there were 193 passengers on the Moscow-Irkutsk flight Sunday — including 14 children — and a crew of 10. Emergency Ministry spokeswoman Natalia Lukash said three people whose names were not on the passenger list were pulled unconscious from the wreckage; it was not clear if they had been on the ground or were flying as unregistered passengers.
At least 12 of the passengers were foreigners, from Belarus, Poland, China, Germany and Azerbaijan, according to the flight manifest.
The plane veered off the runway on landing and tore through a 180-centimeter high concrete barrier. It then crashed into a compound of one-story garages, stopping a short distance from some houses.
Cranes could be seen hanging over the wreckage Monday, as several dozen investigators stood on top of what remained of the fuselage in a light rain. Charred and water-logged wreckage stood two stories high. A penetrating smell of burning hung over the scene.
Relatives were arriving at Irkutsk morgues to try to identify the dead.
Pilots regard the Irkutsk airport as difficult as its runway slopes and its concrete is very slippery when wet, Vladimir Biryukov, an expert at the Gromov Aviation Institute, said on NTV. Irkutsk is about 2,600 miles east of Moscow.
Levitin said authorities were looking into a proposal to lengthen the runway at the airport by a quarter-mile and he announced financing for resurfacing the runway. He also said that city authorities had been asked to determine whether the buildings the plane collided into had been constructed legally.
Meanwhile, another Russian airliner, a Tu-154 operated by Urals Airlines, made a successful emergency landing Monday in Irkutsk after one of its engines failed, Beltsov said.
An S7 Airbus A310 also made a successful emergency landing early Monday at the airport in the Ukrainian city of Simferopol following a technical malfunction, officials said. Several hours later, a Tu-134 plane carrying the Russian navy chief rolled off the runway in Simferopol and one of its two engines caught on fire, the Interfax news agency reported. No one died, but several officers suffered burns.
In May, an Airbus crashed in stormy weather off Russia’s Black Sea coast as it prepared to land, killing all 113 people on board. Airline officials blamed the crash of the Armenian passenger plane on driving rain and low visibility.
Russian air safety standards plummeted in the years following the 1991 Soviet collapse as the state carrier Aeroflot split into hundreds of private carriers, many of which lacked funds to properly maintain and service their planes.
Economic stabilization and the strengthening of official controls helped improve air safety in the 1990s and the nation’s aviation safety record gradually returned to normal. Russia’s oil-driven boom of recent years has bolstered the carriers’ earnings and allowed many airlines to replace their aging Soviet-era jets with Boeings and Airbuses.
Authorities have said, however, that some airlines weren’t diligent enough about safety and called for stronger enforcement of official standards throughout the industry.

TITLE: City Braces Itself for Trials and Tribulations of Hosting G8
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The international spotlight falls on St. Petersburg this weekend as it hosts the G8 summit, but while the publicity from the top event is expected to bring numerous benefits later — such as a boom in foreign tourists — security arrangements now are adversely affecting many aspects of life in the city, from traffic routes to court hearings, from volleyball games to funerals. 
Even romantic boat trips along canals — one of the signature pleasures of the White Nights — will not be permitted.
While the city hosts heads of state, diplomats and journalists, local residents will have to restrict their own hospitality. Residents of the suburban town of Strelna received leaflets from the district administration asking residents not to invite guests during the summit for security reasons.
Lyudmila Travina, press-secretary of Petrodvortsovy district of St. Petersburg, said all residents of the area, including children, have been issued accreditation documents to allow them to return to their homes through police cordons. Strelna, the nearest village to the summit’s location, has been surrounded by a temporary green security net, which will be removed after the event.
Nearby sanatoriums and summer recreation homes have been closed for guests since Saturday. Guests who had planned to spend a number of weeks in July at the resorts are having to move out for the duration of the summit, which concludes next Monday.
“I don’t understand what is the problem with feeble pensioners: even if I wanted to walk up to [the summit’s venue at the] Konstantinovsky Palace, I would have fallen off my shaky feet after walking about 500 meters — even with a cane,” said Varvara, a local pensioner in her 80s, who asked for her last name to be withheld.
An international beach volleyball competition, SWATCH-FIVB that was due to start on Monday outside the Peter and Paul Fortress, has been moved to begin on July 19.
Even the dead will be affected by the summit. 
Yuzhnoye cemetery, St. Petersburg’s largest, will be closed for funerals from Saturday through Monday. Located next to the Volkhonskoye highway, the cemetery is on the route that G8 national delegations will take from Pulkovo Airport — which is also closed to public flights for the weekend — to Konstantinovsky Palace.
Since the leisure program for the heads of state and their spouses has not yet been published, a number of the city’s premiere cultural institutions, including the State Hermitage Museum and the State Russian Museum, remain on high alert for impromptu visits. 

PROTEST GROUPS
Police are meanwhile making every effort to minimize G8 protests in the city.
Representatives of opposition groups recall St. Petersburg’s 300th anniversary celebrations in May 2003 when workers installed a long two-meter high wooden fence alongside the Volokhonskoye highway leading to the luxurious brand-new cottages surrounding the Konstantinovsky Palace where President Vladimir Putin welcomed the 50 heads of state. The fence concealed dilapidated houses, piles of garbage and construction sites from the VIPs. 
The residents living in the area were ordered to stay away from the highway over the course of the festivities.
With such memories fresh, some St. Petersburgers plan to leave the city for the duration of the summit. The traffic police has already voiced an appeal to the city residents asking them not to use cars during the G8.
“The police were tough [during the 300th anniversary] and acted oppressively; they detained anyone who seemed even remotely suspicious to them,” recalls Vladimir Soloveichik, a left-wing politician and one of the organizers of the Second Russian Social Forum, a series of protest events timed to coincide with the G8 summit. “They blocked whole quarters in the city center for hours making it impossible for the residents to get home.”
Ruslan Linkov, head of Democratic Russia, a non-governmental organization, said the police are trying to bring the city to a standstill during the summit.
Although there are several hearings scheduled to take place in the city’s courts in mid-July, the hearings are being postponed because the law enforcement cannot guard suspects to and from court.
The court cases in question include, among others, the ongoing case of the apparently racially motivated murder of Vietnamese student Vu An Tan in 2004 and the 1998 murder of democrat politician Galina Starovoitova, where two suspects are still on trial. 
“The judge told us the session, which is approaching its final stage, will have to be moved to a later date because of the summit,” Linkov, an aide to Starovoitova who was injured in the assassination, said. “Law enforcement apparently feel it would be unwise and too risky to drive the suspects around town to courts when world leaders are meeting a few kilometers away. Sure enough, the police will be busy chasing opposition meetings.”
Organizers of the Second Russian Social Forum, which serves as an umbrella platform for a wide spectrum of opposition movements during the summit, has already been denied the right to hold at least one outdoor event, Soloveichik said.
Leonid Bogdanov, head of City Hall’s Law Enforcement and Security Committee, refused permission for a protest march to take place from the Kirov Stadium to the Avrora battleship on Saturday, on the grounds of “high intensity of road traffic and the law enforcemement carrying out anti-terrorist prevention campaigns.”
“The officials suggested that we don’t organize a march and hold the meeting at the Kirov stadium,” Soloveichik said. “But they have no legal reason to confine us to the antiglobalist camp by the stadium, and we are definitely going to appeal this ridiculous and illegal decision.”
Alexander Chekalin, first deputy head of the Interior Ministry, said Monday that “It wasn’t a blunt refusal. We offered them replacement locations. Organized movement in the city center is likely to create discomfort for the general public. It would be unfair to support certain categories of people at the expense of hundreds of thousands of local citizens.”
Olga Kurnosova, a representative of the United Civil Front non-governmental organization, said the motto of the demo is “Rights are not given, rights are taken.”
Antiglobalists have not been the only victims of such restrictions. 
The Communist Party was denied permission to hold a march on Nevsky Prospekt and a meeting on St. Isaac’s Square, also Saturday.
The City Hall offered Communists a spot outside the Theater For Young Spectators but the activists were unhappy with the alternative and are planning to carry on as intended.
Some radical activists have been confined to the city. 
Yury Belyayev, head of the nationalist Liberty Party which was outlawed 18 months ago for inciting ethnic hatred, said he will be confined at home against his will.
“I would have adored to get out but I have been given a written undertaking not to leave the city,” he said. “So here I am, melting on the heat.”

AIRPORT CLOSED
Pulkovo Airport will be closed for all regular flights Saturday to Monday, said Anton Koren, Pulkovo marketing manager.
“The airport is well-rehearsed for the role: during the celebrations of the St. Petersburg’s 300th anniversary in 2003, the airport served 75 airplanes, including 48 with official delegations,” he said. “Security will be heightened during the event. We have purchased a substantial amount of brand-new equipment, including X-ray sets and highly sensitive detectors, to enhance security levels.”
Local airlines have had to cancel some of their flights to vacate air space for official delegations. Lufthansa has been forced to cancel 12 flights. 
“We will use larger planes in the post-summit days to compensate for the losses,” said Silvio Uhlfelder, former manager of Lufthansa’s North-Western region branch and now its regional manager in Ghana. “I find it difficult to calculate the losses because we don’t know how many seats we would have sold.”
But and minibus routes will be also affected. Bus routes 90, 195, K-290, K-295, 39, K-39 will not operate.  
There will be also three free bus routes to compensate for traffic problems: No. 303 links Krasnoselskoye highway and Strelna; No. 302 links Krasnoselskoye highway with the Admiral Makarov Marine Academy; No. 301 connects Maxim Gorky ulitsa and the Murmansk Shipyard.
On Monday, City Hall launched a 24-hour telephone hotline to answer any questions the general public may have about the city infrastructure during the summit as well as to deal with complaints.
Tel: 576 2222.

TITLE: Bodies of 2 More Pensioners Turn Up in Park in Moscow
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — Police said Friday that the bodies of two elderly men were recently found in Bittsevsky Park, indicating that a suspect arrested in late June may not be the serial killer linked to more than a dozen attacks in the park since December.
The latest victims died after being repeatedly struck on the head — the trademark style of the so-called Bittsevsky Maniac, a police spokesman said. Police found the bodies in the southwestern Moscow park on June 30, several days after the killings.
The spokesman, who spoke on condition of anonymity because he was not authorized to discuss the case, said that despite the latest deaths, investigators were continuing to investigate Alexander Pichuzhkin, 32, who was arrested June 15 on suspicion of killing two women in Bittsevsky Park several days earlier. Investigators have said Pichuzhkin confessed to killing 69 people. “Why should investigators suspend the investigation if Pichuzhkin is continuing to cooperate?” the spokesman said. 
Komsomolskaya Pravda reported Friday that the investigation into Pichuzhkin had been suspended after the latest deaths.
The spokesman refused to provide details about the latest deaths.
Pichuzhkin is charged with killing two women in a Bittsevsky-area grocery store where he once worked as a loader.
Most targets of the other attacks in the park have been elderly men, suggesting that police have yet to track down the real serial killer. 
A source close to the investigation has said that Pichuzhkin is mentally unstable and might be claiming to be guilty of crimes he did not commit.
The hunt for the killer has been problematic. On Feb. 20, police shot and injured an apparently innocent man while combing the park for the killer. About 200 officers were deployed there after police received a tip that a man resembling the killer had been spotted. The officers detained a suspect, but he pulled out a knife and managed to break free from his handcuffs. He then tried to flee. Police shot the man in the leg, and he was hospitalized.

TITLE: Teen Magazine Closes Down
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Burda Publishers is closing its popular magazine Cool only a week after the Prosecutor General’s Office demanded that the publication and two other youth-oriented titles be shut down for “exploiting” teenagers’ interest in sex and drugs.
Darya Samsonova, a spokeswoman for Burda Russia, the publisher of Cool and Cool Girl, which was also targeted by prosecutors, said the decision to close the magazine was not connected with the prosecutors’ demand but with a sharp decline in advertising revenues.
“Cool has not been delivering its target revenues for a long time. The results of the first six months of this year also did not live up to expectations,” she said by telephone Friday.
She did not provide any figures. The magazine was launched here in 1997.
Then-Deputy Prosecutor General Sergei Fridinsky demanded last month that the Federal Service for Media Law Compliance and Cultural Heritage move to close Cool, Cool Girl and Molotok, which is published by the Kommersant publishing house.
In his complaint, Fridinsky wrote that the magazines “systematically print promotional materials with color illustrations that exploit teenage readers’ interest in sex” and therefore violate laws pertaining to the media, narcotics and children.
Samsonova said Burda had no plans to reregister Cool Girl as an erotic publication or to close it. The magazine will, however, be renamed Girl, she said. Burda Russia publishes an array of weekly and monthly titles, including Playboy, Liza, and Oops!

TITLE: Yanukovych May Be New PM
AUTHOR: By Natasha Lisova
TEXT: The Associated Press  	
KIEV — Ukraine’s pro-Russian Party of the Regions has formed a coalition with two other parties in parliament and proposed its leader, Viktor Yanukovych, as prime minister — a stunning reversal of fortunes that sets the stage for further political conflict.
“Revolutions and rallies are over. The way to unite all of Ukraine is open,” Yanukovych said at a congress of his party in Kiev on Saturday. 
If approved as prime minister, Yanukovych promises to mend ties with Moscow that were badly damaged earlier this year when Russia cut off gas supplies to Ukraine over a bitter price dispute.
Yanukovych urged President Viktor Yushchenko — the rival who beat him out in the bitter 2004 election — to “rise above your political sympathies and antipathies, do your best so that society finally comes to a mutual understanding.”

TITLE: Business Gears Up For Impact of G8
AUTHOR: By Liza Hearon and Evgenia Ivanova
PUBLISHER: Special to The St. Petersburg Times
TEXT: St. Petersburg businesses are uncertain about what the G8 meeting will do to their profits over the weekend, but think that the summit on July 15-17 will be beneficial for the city’s image.
Those who operate tours, sell souvenirs, and run restaurants believe that the summit will improve St. Petersburg’s profile as a tourist destination, perhaps meaning more business for them in the long term, and possibly as soon as next year.
However, with the closure of the airport and possible traffic interruptions in the city in the height of St. Petersburg’s busy tourist season, some businesses might suffer losses over the summit weekend.
Tatyana Demeneva, the deputy head of the Northwestern branch of Russia’s Union of Tourism Industry, thinks the G8 summit is a “double-edged sword” for their businesses. 
“Certainly, during the summit we will have fewer tourists as the airport will be shut down and the port will be closed,” Demeneva said in a telephone interview Monday.
“On the other hand, the event is a very powerful PR tool for the city. Many heads of governments are due to be here, so St. Petersburg will receive a lot of media exposure; TV channels will show St. Petersburg in the background,” she said.
“Naturally, this ought to stimulate some interest to the city from around the world and we expect a sharp increase of tourist flow next year, similar to the situation in 2003 when the city was celebrating its 300 year birthday. The year after that event, we saw a record number of tourists coming in to St. Petersburg, ” Demeneva said.
But the summit has created problems for businesses this year.
“We’ve had to steer our clients away from those dates,” said Steve Penney, chairman of ASLA Travel Group, which sells wholesale travel packages to Russia.
“In fact, we’ve just had a group moved from one hotel to another because a delegation brought more people than they’d planned. Groups are experiencing disruption in their travel arrangements,” he said in a telephone interview.
He said that tour groups had advance notice and have been planning their tours either the weekend before or after the summit. 
“It’s still a centrally controlled country, and if it’s decided that the Hermitage will be closed for a certain delegation, it could cause serious problems for tours,” Penney said.
Not all tourists have been staying away, though. 
“It’s true that for some tourists a place hosting the G8 summit has a negative connotation because of the probable anti-globalist protests and some of them would prefer to stay away from the area. But so far we haven’t noticed any changes in number of tourists staying with us,” an administrator for one of the city’s hostels told The St. Petersburg Times on the condition of anonimity. 
Maria Chernobrovkina, the executive director of the American Chamber of Commerce, said that the Chamber’s member companies will be affected by the summit. 
“There will be some traffic irregularities. This will influence cargo movements and will interrupt worker transportation to many companies, particularly those situated close to the Petergof and Strelna areas. And this, in turn, might affect the shift schedule at the factories,” Chernobrovkina said, speaking with the St. Petersburg Times on Thursday.
“But the largest inconvenience we have experienced was the absence of clear official information regarding the possible limitations resulting from the summit until the last moment,” Chernobrovkina said.
“The information from City Hall has just started coming in, but now it’s too late for the companies to plan their operations,” she said.
Tatiana Pushkina, an administrator at the Katharina Souvenir Boutique, said that business operations will “not be as good as normal.” The store was originally opened to service cruise ships and is likely to experience difficulties as the city’s waterways are closed down for the event.
“We don’t have important ships this week, so luckily we won’t miss too many customers,” Pushkina said. “There will still be a lot of groups coming. The hotels are full with tourists and mass media, and there will be the presidents’ tours — we are hoping they will come here.”
Restaurants may not receive their normal business from tourists over the weekend, but they are hoping to cater to the visiting delegations and journalists.
“We’re expecting special guests because of our location in the historical center,” said Anna Marchenko, an administrator at the Hermitage Restaurant.
However, tourism seems to be experiencing less problems than some predicted. Tourists and students are in the city and aren’t planning on leaving.
“The fact that St. Petersburg was chosen as the summit venue didn’t influence my plans to come here simply because I didn’t know about it at the time of booking my trip. But even if I knew, it wouldn’t have stopped me from coming here,” said Oyvind Saetren, a Norwegian student at the St. Petersburg-based Linden Denz Language Center.
“One inconvenience I’ve come across so far is the absence of good imported alcohol in the local shops. I’m sure all the people coming here for the summit wouldn’t mind having a glass of good wine,” Saetren said.

TITLE: Duma Ends Session With Eye on Elections
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: MOSCOW — After approving a bill on extremist activity that critics say will help stifle the opposition ahead of national elections, State Duma deputies adjourned Saturday for summer vacation.
The final bill can be seen as a fitting conclusion to a spring session dominated by legislation that promises to help United Russia in next year’s Duma elections and to secure a smooth handover of power to President Vladimir Putin’s designated successor in 2008.
In all, deputies approved 144 bills during the spring session, Duma Speaker Boris Gryzlov said Saturday. The session had been scheduled to end Friday, but it was extended by one day to allow deputies to vote on 52 bills in various readings. Of those bills, eight were approved in final readings, including the one on extremism.
United Russia, which has 310 of the Duma’s 450 seats, rejected a proposal by Vladimir Ryzhkov, an independent deputy, to delay the third reading of the bill on extremism until the fall and voted down dozens of revisions suggested by Communist deputies. 
United Russia said the bill would help fight racist groups and increased attacks against dark-skinned foreigners and religious groups.
Opponents said that the existing law provided no definition of the word “extremist” and that the bill would help the Kremlin clear the field of unwanted candidates ahead of the Duma and presidential elections. 
“You can put anything under the understanding of extremism, even different points of view,” Ryzhkov said.
The bill would bar from elections not only candidates deemed extremist, but their parties, too.
Central Elections Commission head Alexander Veshnyakov called the bill undemocratic on Saturday and urged the deputies to vote against it.
“An entire party cannot be held responsible for one of its members. A party should be punished only if you find indications of extremism in its documents,” he said.
“Democratic countries don’t have such bills,” he added.
The bill still needs to be approved by the Federation Council before Putin can sign it into law. It is expected to come into effect by Jan. 1.
Oleg Kovalyov, chairman of the Duma Management Committee and a United Russia deputy, said he was pleased with the Duma’s work this spring. “It was a very intense session, during which we were able to approve bills that were very important for our country,” he said.
Gennady Raikov, chairman of the Credentials and Ethics Commission, said United Russia’s efforts had “borne fruit.”
But the opposition complained that the pro-Kremlin majority had not given it any say.
“The Duma is working like in Soviet times, when we had a single party that made all the decisions,” Rodina Deputy Boris Vinogradov said. 
Communist Deputy Viktor Ilyukhin called United Russia the Kremlin’s puppet. “The Kremlin asks and United Russia does,” he said.
Deputies were indeed busy this spring, and many of their bills were aimed at helping the Kremlin hold on to power after the upcoming elections, said Andrei Ryabov, a political analyst with the Gorbachev Fund.
“The Duma has worked with the next elections in mind. ... Most of the legislative process was aimed at limiting the power of the opposition,” he said.
Particularly restrictive, Ryabov and other analysts said, were the bill on extremism, a bill that removed the “against all” option from the national ballot, and legislation that barred deputies from switching parties and parties from including candidates from other political groups on their party lists.
Dmitry Oreshkin, head of the Mercator think tank, said he did not consider there to have been any independent initiatives in the Duma this spring. “The Duma behaved the way it was asked to behave,” he said. “The Kremlin gave orders, and the deputies fulfilled them. All the bills they approved came from the Kremlin.”

TITLE: Putin Weighs In on Robots, Sex Following Internet Conference
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia will use robots to defend its borders, and President Vladimir Putin does not remember the first time he had sex.
After wrapping up an online conference last Thursday, Putin took a few minutes to answer several of the most-popular questions sent in by Russian Internet users, Kommersant reported Friday. The two journalists who hosted the 130-minute webcast had largely ignored the top-rated questions submitted online from around the world, focusing instead on foreign and domestic policy issues.
“Yes, we will use the latest technical devices. Already now they are being stationed, for example, in the southern parts of our country,” Putin said when reporters asked him after the conference whether Russia planned to use “gigantic, humanoid war robots” to defend itself.
Asked to elaborate about what he meant, Putin said: “These are unmanned aerial vehicles. And maybe the time will come for gigantic robots. However, so far we have put our main hope on people — namely border guards,” Putin said, Kommersant reported.
Asked about the possible awakening of the giant mythical octopus Cthulhu, the fourth-most popular question among the more than 150,000 sent to Putin, he said that he believed something more serious was behind the question. Cthulhu was invented by novelist H.P. Lovecraft and was said to be sleeping beneath the Pacific Ocean. 
Putin said he viewed mysterious forces with suspicion and advised those who took them seriously to read the Bible, Koran or other religious books.
“When did you start to have sex?” Kommersant reporter Andrei Kolesnikov then asked, verbalizing a question that was on the minds of 5,640 Internet users. 
“I don’t remember when I started. But I can remember the last time,” Putin said.

TITLE: Senate Broadens Security Mandate
PUBLISHER: The Associated Press
TEXT: MOSCOW — The Federation Council on Friday unanimously authorized President Vladimir Putin to dispatch armed forces or security agents abroad to stop terrorists. 
The move to provide a legal stamp of approval for overseas operations came after Putin ordered special forces to hunt down and destroy those who killed four Russian hostages in Iraq last month. An al-Qaida-linked group has taken responsibility. 
The Kremlin has not specifed which forces would take the lead in tracking down the al-Qaida group. Defense Minister Sergei Ivanov said Thursday that a Defense Ministry special unit has been assigned the task. He did not give further details, but could have been referring to agents from the Defense Ministry’s Main Intelligence Directorate, known as GRU. Earlier, Federal Security Service director Nikolai Patrushev said his agency would be involved.

TITLE: Italian Consul Heads for Pastures New
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Beauty, darkness and nostalgia define St. Petersburg for Marco Ricci, Consul General of Italy in St. Petersburg, who is due to start a new job as head of the commercial section of the Italian embassy in Moscow soon after the meeting of the G8 leaders this weekend.
His mention of nostalgia alludes to Andrei Tarkovsky’s 1982 classic film “Nostalgia,” shot in Italy, close to Ricci’s native town of Perugia. “St. Petersburg gives you the same sense of nostalgia for a place never visited before that Tarkovsky experienced in Tuscany,” he said. This feeling is crucial to the city’s atmosphere of somewhat decadent charm, and is mainly due to a lack of sun, Ricci added.  
“The most depressing thing about this city that I can think of is that there is too much darkness,” Ricci admits. “But then again, it is an inseparable part of the atmosphere. St. Petersburg has a magically serene feel about it, influenced by its northerly latitude and the unique architectural style of the marble mansions adorning the embankments.”
Having served in St. Petersburg since 2002, Ricci is looking forward to his new post.
“So far, Moscow has attracted the lion’s share of Italian investment in Russia, while St. Petersburg has been perceived more as a cultural city or leisure destination, rather than as a plum opportunity for investment,” Ricci said in an interview with The St. Petersburg Times. “But now St. Petersburg has made its large and attractive investment potential known on an international level.”
As St. Petersburg faces a challenging time with rapid economic growth and a boom in foreign investments, foreign experts have used a number of allusions to describe Russia’s second-largest city, nick-naming it a new Camp David, a new Detroit or a new Silicon Valley. But for Ricci, the best comparison to make is to call it the Venice of the North.
Ricci, who will be leaving the city in a few weeks’ time, has been too busy to indulge in reminiscences.
He is preparing for a visit by the governor of Naples, Antonio Bassolino, who is coming to town to establish cultural connections and lay the ground for the first-ever exhibition of the art of Pompeii in Russia. And, of course, a huge amount of his time is taken up by preparations for the forthcoming meeting of the world’s leading states.
In Ricci’s opinion, Russia — stretching over two continents, connecting Europe and Asia, the Islamic world and Christianity — is a strategic member of the prestigious international club.
“Russia is a globally important player, a permanent member of the UN Security Council and a state with some of the world’s greatest resources of oil and gas, so it was natural for the country to join the group,” he said. “When you assess the immense political changes and economic upheaval that Russia has seen over the post-Soviet years, and considering the hardships that people went through, you realize how difficult it is to build a strong democratic state with an efficient government in such a limited period of time.”
Ricci finds it encouraging that the G8 summit is to take place in St. Petersburg, as it provides an impulse for growth and sets an optimistic mood. “The same happened to Naples in 1994, when the G7 was held there,” he said. “The city — whose mayor was Antonio Bassolino — has, since then, been booming.
“The new emerging links between St. Petersburg and Italy are numerous: Italian architect Massimiliano Fuksas has been short-listed in the competition to build the new Gazprom headquarters; Italian chefs are arriving in town with new authentic restaurants opening all the time; and you don’t have to search around to find Italian brands in local stores,” Ricci said.
While locals demonstrate a fascination for Italian fine arts, classical music and appreciate the role Italian architects played in creating the city, Ricci said some of the areas which brought international fame and recognition to his home country remain largely unknown in Russia.
“Of all Italian things, most people here would think of culture, cinema and fashion, whereas Italy’s industrial potential seems to have been less appreciated on the banks of the Neva River,” Ricci said. “In 2004, however, Italy’s major electricity company Enel won a bid — together with RAO-UES — to run the North West Thermal Plant here in St Petersburg for a period of three years. What is more, on Thursday, ARTETRA starts production of a mobile communications system based on the tetra standard. The main stakeholder in this project is OTE Selex, a Finmeccanica company.”
“Italy is a big industrial country, and it helped Russia to launch its automobile production, with Fiat in Toliatti, but I have noticed that when it comes to cars, the Russians don’t think of Italy,” Ricci observed. “Italy produces some of the world’s most fashionable cars: Ferrari, Maserati, Alfa Romeo... We should definitely promote these brands here, as well as our achievements in hi-tech.”
Although he agrees that the younger generation in Russia has a better idea of who fashion designers Armani and Versace are than filmmaker Federico Fellini or the Early Renaissance artist Fra Angelico, Ricci is not discouraged by this trend; he remains philosphical.
“Most of the modern industrial items still belong to and are rooted in the venerable Italian tradition,” he said. “By appreciating the style of Armani we are, in a way, admiring the purity and simplicity of Andrea Palladio [Renaissance Italian architect] and neo-classical architecture.”
Ricci feels very much at home when walking or biking in the streets of St. Petersburg, especially along the canals. The Lions Bridge next to the Consulate reminds him of Venice which also has the lion as its symbol. Likewise, he compares the emotionality and openness of Russians with the Latin temperament. “The Russians are very warm people, and this makes them very close to southern Europeans,” Ricci explains.
“Try to change the things you are able to change, accept the things that you cannot change and have the wisdom to recognize the difference between the two,” is a popular axiom that often comes to the diplomat’s mind and serves as a guide in his everyday work.
“I do not want to and never try to change the Russians.  I know it would be impossible to change the Italians and there are far less of us than there are Russians! So I take these countries for what they are and try to enrich both cultures via mutual exchange,” he said.

TITLE: Watchdog Focuses On Rights Issues
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: WARSAW, Poland — A leading human rights watchdog has downplayed the notion that Russia lags behind Europe in respect for human rights and lays the blame for the negative portrayal on a misinterpretation of the numbers of human rights complaints received by the European Court of Human Rights.
“The European Court of Human Rights receives about 25,000 complaints against Russia every year, but this is not an indication of Russia’s notoriety in rights violations,” said Marek Nowicki, the President of the Helsinki Foundation for Human Rights (HFHR), at a recent meeting in Warsaw, Poland.
The meeting was attended by human rights activists from Russia, other Commonwealth of Independent States nations, Eastern Europe, the Balkans and Turkey.
Nowicki said the court in Strasbourg files about 10,000 cases against Poland annually and about the same or more number of complaints against other European states with a long history of the rule of law. 
“Now, compare the number of complaints against EU-member Poland with a population of less than 40 million with Russia, inhabited by over 145 million people,” said Nowicki, who served as an ombudsman in Kosovo between 2000 -2005.
In what appeared to counter accusations that the Kremlin is undermining human rights organizations with new restictive laws, Nowicki said the unusually high figures of complaints against Russia “is not an indication of bad human rights records, but rather a reflection of how active the human rights organizations are in Russia as opposed to their counterparts in other European countries.”
However, records of human rights violations in the war-torn republic of Chechnya and the surrounding region were not typical of Nowicki’s otherwise rosy view of the state of human rights violations in Russia as a whole.
Last week, the Moscow-based Helsinki Foundation Group (HFG), together with Amnesty International and 13 other rights groups across Europe, sent a petition to the Moscow bureau of the European Union’s Parliamentary Assembly calling for a new approach in monitoring human rights in Chechnya and Russia’s North Caucasus amid grave rights violation in the region.
In line with other non-governmental organizations in Russia, HFG has been locked in a long-standing dispute with the Russian authorities in which it is accused of received dubious foreign funding detrimental to the Russian state.
HFG joined with its European counterparts to challenge the Assembly’s decision to assign a regional monitoring team that would exclude local participants, giving room for Russian authorities to conceal human rights abuse.
The petitioners echoed concerns voiced by the Helsinki Foundation on Human Rights.
“Russia’s stance on the Chechen conflict is in itself an obstacle in monitoring human rights there,” said Professor Irena Rzeplinska, one of HFHR’s leaders.
Counter to Russia’s official position, Rzeplinska said Poland alone has granted asylum to 300 refugees from Chechnya, pending a backlog of applicants since the start of the second Chechen war six years ago.
Russia also holds Europe’s leading position in violent hate crimes, recording a total of 18 hate murders from January to May and 78 murders in the previous two years, according to the Moscow-based SOVA Center for Information and Analysis.

TITLE: IN BRIEF
TEXT: Chaika’s Pick Approved
MOSCOW (AP) — The Federation Council on Friday approved the new Prosecutor General Yury Chaika’s decision to replace five top deputies and the country’s chief military prosecutor. 
“These are the people who are capable of fulfilling orders set by the president and parliament,” Chaika said, Interfax reported. 
“The core of my team has [now] been formed,” he said.
The Federation Council approved all six of Chaika’s appointments: Military Prosecutor Sergei Fridinsky, First Deputy Prosecutor General Alexander Buksman, and Deputy Prosecutors General Ivan Sydoruk, Ivan Semchishin, Viktor Grin and Yury Gulyagin. 

Korean Missile Strike
MOSCOW (AP) — General Yury Baluyevsky, the chief of the General Staff, on Friday denied reports that a North Korean missile fell close to Russia’s shoreline. 
“These launches presented no direct threat to the territory of the Russian Federation,” Baluyevsky told State Duma deputies. 
State-controlled Channel One television reported Wednesday that one missile fell into the Sea of Japan a few dozen kilometers from the Far East port city of Nakhodka, and that residents tried to approach the North Korean consulate there to demand an explanation. 
But Baluyevsky said the missiles fell at a latitude of about 40 degrees north — which is roughly 300 kilometers from the Russian shore. 

U.S. Pressures China
WASHINGTON (AP) — A top U.S. diplomat on Sunday urged China to put pressure on North Korea to end its missile tests and to return to international nuclear disarmament talks. 
Undersecretary of State Nicholas Burns also indicated the United States would not grant the North direct talks in the wake of Pyongyang’s test-firing of seven missiles that rattled northeastern Asia and beyond. 
Chinese Foreign Minister Li Zhaoxing spoke by telephone with Foreign Minister Sergei Lavrov on Saturday on the “UN Security Council’s deliberation of North Korea’s test -firing of missiles,” the Chinese ministry said in a two-sentence statement posted on its web site.

TITLE: Gazprom Misses Its Profit Forecast, Responds to IEA
PUBLISHER: Combined Reports
TEXT: MOSCOW — Gazprom reported Friday a 49 percent rise in net profit due to greater gas sales, higher prices and new oil assets, but the results missed expectations and the shares fell. 
The world’s largest gas producer, which covers a quarter of Europe’s needs in the fuel, said its net profit audited to International Accounting Standards rose to 311 billion rubles ($11.56 billion) in 2005 from 209 billion rubles in 2004. Sales climbed to 1.38 trillion rubles ($51.3 billion) from 977 billion rubles, while operating expenses rose 30 percent to 930 billion rubles. Taxes, salaries and costs for oil and gas purchases all were higher, as were costs for repairs and maintenance and depreciation. 
“We believe the results are weak as they met our expectations on the top line, but were 7 percent lower than our net profit estimates,” said Kakha Kiknavelidze from UBS. 
Citigroup had expected Gazprom to report a net profit of $13.8 billion, with Alfa Bank at $12.3 billion, Renaissance Capital $12.1 billion and Troika Dialog $11.9 billion. 
Kiknavelidze said he was disappointed by Gazprom’s low cash flow generation on the back of high cost increases. 
The stock closed down 1.9 percent at $10.40 in Moscow.
The firm’s net debt rose by 60 percent to over $28 billion as it spent more than $13 billion in the fourth quarter to buy control of oil firm Sibneft from Roman Abramovich. 
The head of Gazprom’s export division on Friday accused the head of the International Energy Agency of attempting to “destroy” the company by organizing European governments to thwart Gazprom’s interests, Dow Jones Newswires reported. 
IEA executive director Claude Mandil has sent a letter to European governments recommending they resist Gazprom’s attempts to expand downstream into Europe and that they jointly pressure Gazprom to abandon its monopoly on Russian natural gas exports, Alexander Medvedev said, according to the report. Mandil sent a letter to ministers of industry and energy of European countries “calling on the European Union to pressure Russia and actually destroy Gazprom, including its export monopoly,” Medvedev was quoted as saying. 
Mandil has called on Gazprom to open up its gas export pipelines to other gas producers and questioned whether it is investing enough in developing its reserves to meet its European supply commitments. Medvedev said the company would have no problems meeting demand in the future. 
“Our reserve base is sufficient to meet not only the demand of Europe, but also our new markets: China, Korea, and the United States,” Dow Jones Newswires quoted him as saying. 
Medvedev also rejected allowing independent Russian gas producers to export gas from Russia.
The IEA was not available to comment late Friday. 
(Reuters, AP)

TITLE: Alcohol Drought Hits Retailers
PUBLISHER: Reuters
TEXT: MOSCOW — The late delivery of new excise labels for imported wines and spirits, due July 1, is denting grocery chains’ sales and leaving drinkers with a narrow choice of local vodka and beer. 
“This really makes our life hard. Shelves are empty, and as customers won’t spend money on alcohol, revenues are down,” said Roman Uvarov, marketing director at discount retailer Dixi. “Suppliers give us contradictory information, and we don’t know when [foreign] alcohol will stage a comeback.” Pyatyorochka has warned that the delay will hurt its sales and it does not expect a full return of imported spirits to its stores for another 60 to 90 days. Sedmoi Kontinent said it might lose between 3 percent and 7 percent of revenue in the third quarter, adding it hoped to partly recover by year’s end. 
According to Deutsche UFG, alcohol accounts for 15 percent of Perekryostok’s and Sedmoi Kontinent’s revenue, 11 percent at Pyatyorochka and 10 percent at Magnit. Imports make up 50 percent of sales value. 
Whitehall, a leading alcohol importer, had to close its Kauffman chain of stores from July 1. A Kauffman store manager said he would reopen Friday but only had labels for Veuve Clicquot champagne and Hennessy cognac. 
Deutsche UFG estimated losses at the largest grocery chains at more than $100 million — enough to lop 1.3 percent to 1.9 percent off annual sales. 
“Clearly, consumers will be forced to substitute imported wine and spirits for domestic premium vodka and beer, although we nevertheless believe that the shops will see some loss in sales,” Deutsche UFG said. 
Natalya Milchakova, head of research at Otrkytiye, said discount stores would suffer less than upmarket chains.

TITLE: U.S. Offers Russia Nuclear Deal
AUTHOR: By Maxim Kniazkov
PUBLISHER: Agence France Presse
TEXT: WASHINGTON — The United States said it is beginning negotiations with Russia on a potentially lucrative nuclear energy accord, but made clear any deal would be conditional on Moscow’s full cooperation in US attempts to block Iranian nuclear ambitions. 
Russia and China have been a key impediment to efforts by the United States to rally members of the UN Security Council behind its plan to slap international sanctions on Tehran in order to force it to halt uranium enrichment.
The issue is expected to be front and center in negotiations between President George W. Bush and President Vladimir Putin, at a Group of Eight summit in St. Petersburg next weekend.
Although details of the proposed deal have not been released, it is seen as an attempt by the Bush administration to soften Russia’s stance on Iraq.

TITLE: IN BRIEF
TEXT: Bank Ups Assets
ST. PETERSBURG (SPT) — International Bank of St. Petersburg increased net assets to 17.3 billion rubles ($644 million) in the first half of this year, giving a 12 percent increase on the same period last year, Interfax reported Friday.
Net profit increased by 40 percent up to 89 million rubles ($3.3 million). During the first six months of this year the bank attracted 12.9 billion rubles ($480 million) from corporate and individual clients.

$25 Mln in Jewelry
ST. PETERSBURG (SPT) — Russkiye Samotsvety jewelry firm will invest $25 million in development by 2008, Interfax reported Friday.
The company will spend $5 million on reconstruction of its headquarters and $20 million on building a 20,000 sq. m. trade and exhibition complex.
By the end of the year, Russkiye Samotsvety will open four new shops and an elite boutique in St. Petersburg in addition to its existing six shops.

New Gazprom Stations
ST. PETERSBURG (SPT) — Gazprom Neft was awarded long-term rent agreements for 30 land plots in St. Petersburg, Interfax reported Friday.
At the auction organized by the St. Petersburg property fund, Gazprom Neft offered $11.926 million for the land, just meeting the starting price.
The land plots are located along major roads — Moskovskoye, Kronshtadtskoye, Krasnoselskoye, Kolpinskoye, Beloostrovskoye and Petrozavodskoye highways — and will be used for construction of gas stations.
The next auction is scheduled for July 28. The starting prices for the 10 land plots on offer vary from $200,000 and $1 million per plot.

Chain Opens 27 Stores
ST. PETERSBURG (SPT) – Pyaterochka Holding, operator of the Pyatyorochka and Perekryostok retail chains, opened 27 in the second quarter of this year, RBC reported Monday.
During the same period, the Holding increased sales by 10 percent.
The total number of stores increased to 391 Pyatyorochka stores and 133 Perekryostok stores. 
In addition to that, franchisers operate 479 Pyatyorochka stores in 20 regions of Russia, Ukraine and Kazakhstan.
Pyatyorochka opened another 40 franchised stores during the second quarter of this year.
In St. Petersburg, the company opened 10 new Pyatyorochka stores and one Perekryostok. 
At the present time, the company operates 185 Pyatyorochka stores and 14 Perekryostok stores in St. Petersburg and Oblast.

CIT Raises Net Profits
ST. PETERSBURG (SPT) — CIT Finance investment bank increased net profit by over 800 percent in the first half of this year to 2.4 billion rubles ($89 million), Interfax reported Friday.
The bank’s capital increased by 46 percent to 4.7 billion rubles ($175 million).

TITLE: Tax Breaks Backed By State Duma
PUBLISHER: Reuters
TEXT: MOSCOW — The State Duma voted on Friday to approve the second of three readings of a law to give tax breaks to firms developing new oil deposits or trying to extract the last drops from old wells. 
The law aims to increase exploration by setting a zero rate of mineral extraction tax on certain greenfield sites, giving oil companies an incentive to develop resources that have previously been too remote or complex to be economically viable. 
New oil developments in the East Siberian regions of Sakha, Irkutsk and Krasnoyarsk will pay nothing on the first 25 million tons of oil (about 185 million barrels) during the first 10 or 15 years, depending on whether the license covers exploration as well as production. 
Eastern Siberia’s huge resources have remained largely untapped because of the distance to export markets in Europe and Asia, but Russia hopes to encourage license holders such as Rosneft, TNK-BP and Surgutneftegaz to start pumping oil from the region. 
Russia hopes production will hit 15 million tons per year (300,000 barrels per day) by 2015, far less than its oil heartland of Western Siberia but more than current Russian exports to China, for example. 
Fields that are more than 80 percent depleted will also pay a lower rate. The zero rate will also apply to deposits of highly viscous oil, which is harder to extract. The bill sets a base rate of mineral extraction tax at 419 rubles ($15.57) per ton from Jan. 1, 2007, to the end of 2016, although it will fluctuate monthly.
Analysts say high taxes have helped put the brakes on rising oil output in the last few years, with badly targeted taxes giving firms no incentive to bring new fields on stream. 
As well as corporate taxes, oil firms have to pay pipeline fees, export duties and a windfall tax on high oil prices, meaning that the bulk of the sale price goes to tax. 
Deputies voted 362-125 to pass the bill at its second reading. They will consider it at a third reading on Saturday. In order to become law, the bill still needs the third reading in the State Duma, plus approval from the Federation Council and President Vladimir Putin.

TITLE: Ukraine Steel Imports Put Under Scrutiny
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russian-Ukrainian relations have soured in yet another field as legislators Friday called for all Ukrainian metals to be stopped from entering the Russian market.
The State Duma’s Environment Committee on Thursday urged a moratorium on all Ukrainian metal imports, asking the government to stop what it called scrap metal from Chernobyl being sold in Russia.
The head of the committee, Vladimir Grachev, cited customs data for 2005 and 2006 as evidence that Ukrainian steel was contaminated by radiation, alleging that much of it was smelted from scrap gathered in the Chernobyl area.
The announcement comes as political tensions continue to mar relations between the two countries and Russia and Ukraine squabble over gas prices. 
In the spring, Russia banned all imports and sales of Georgian and Moldovan wines, saying they were a danger to public health, in a decision that was widely seen as political. 
On Friday, the Federal Customs Service refused however to support legislators’ calls for metals imports to be barred, leading experts to suggest that the proposed ban is yet another move by Russian lawmakers inspired by political rather than economic considerations.
“Neither pipes nor metal roll from Ukraine have ever been stopped by Russian customs because of radiation,” Vladimir Zubkov, a spokesman for the customs service, said Friday by telephone. “This is some kind of nonsense.” 
Meanwhile, a Ukrainian government press secretary told Kommersant that Kiev could reply in kind and review the procedure for importing Russian steel.
The allegations came just two days after the Economic Development and Trade Ministry launched an anti-dumping investigation into Ukrainian imports of cold-rolled steel. 
The ministry acted on a complaint by three of Russia’s top steelmakers, Magnitorgorsk Iron & Steel, Severstal and Novolipetsk Steel, or NLMK. 
However, Anton Bazulev, deputy CEO of NLMK, stressed Friday that the investigations into price dumping and radioactivity were completely separate.
Ukrainian metals producers hold under 6 percent of the 65 million ton Russian steel market, and mostly sell pipes, cold-rolled steel and rods. The rivalry between Ukrainian and Russian steelmakers is “psychological,” with the neighboring producers both cash-rich and still in the process of carving up the market since the breakup of the Soviet Union, said Olga Okuneva, a Deutsche UFG analyst.
“These trade wars are frequent,” Okuneva said, noting that the Economic Development and Trade Ministry initiated four anti-dumping investigations into various Ukrainian metal products last year. 
“Our producers are fighting for their place under the sun,” she said.
Adriy Gostik, a metals analyst with Concorde brokerage in Kiev, disagreed. Both the radiation and the anti-dumping claims were politically motivated, he said.
Sanctions against Ukrainian cold roll producers would affect only two steelmakers, Zaporozhstal and the Ilyich Mariupol Iron and Steel Works, Gostik said. “They can just as easily divert sales to Asia and the Middle East,” he said.
The Russian market is worth about $650 million for the Ukrainians, Kommersant said, citing official figures. Russian steelmakers, with 17.5 percent of the Ukrainian market, stand to lose nearly $1 billion should Kiev bar them in turn, the paper said.

TITLE: Financial Times: Abramovich Bidding for Rosneft
PUBLISHER: Combined Reports
TEXT: MOSCOW — Billionaire Roman Abramovich has placed a bid for a stake in Rosneft, giving a boost to the Russian oil group’s planned initial public offering, the Financial Times newspaper said Saturday.
The newspaper, citing unidentified people familiar with the details, said Abramovich made the bid earlier last week. It was likely to have been for several hundreds of millions of dollars worth of shares, it said.
Rosneft is planning to raise $11 billion from an initial public offering of between 13 and 19 percent of its stock in London and Moscow on July 14.
The Financial Times said a spokesman for Abramovich declined to comment.
Rosneft has received offers from investors valuing it at about $65 billion, The Business said Sunday.
The newspaper cited an unidentified person involved in the initial public offering, who said the valuation may be $2.5 billion higher or lower than the $65 billion figure.
Investors may have already subscribed for as many as one and a half times as many shares as are being offered, the person was cited as saying. Rosneft management had hoped for a valuation of about $80 billion, but $65 billion is in line with what the company’s banks had expected, The Business said.
Companies including BP, Chinese groups China National Petroleum Corp. and Sinopec and India’s ONGC have all made nonbinding expressions of interest, Vedomosti reported Friday, citing unidentified banking sources. Vedomosti also said Russian tycoons, including Abramovich, had been approached to throw their weight behind the offering. 
M.S. Srinivasan, India’s petroleum minister, said ONGC was considering an investment of $3 billion, Dow Jones Newswires reported. BP declined to comment, while representatives of the Chinese companies were not immediately available on Friday. Malaysia’s state-owned oil company Petronas has also said it was considering participating in the IPO. 
“The market cap of Rosneft will be around $60 billion. Our investment will be roughly for a 5 percent stake,” India’s Srinivasan said. 
(Reuters, AP, Bloomberg)

TITLE: Poland Warns Europe on Gas
PUBLISHER: Bloomberg
TEXT: MOSCOW — Europe urgently needs to reduce its dependence on Russian energy because the country has proved itself an unreliable partner, Polish Economy Minister Piotr Wozniak said Friday.
The diversification is very important, and not only for Poland, Wozniak said in an interview at a conference in Warsaw.
“Regardless of all declarations, manifestations and cooperation agreements, we experienced three weeks of gas shortages in the middle of a hard winter.”
Gazprom stopped deliveries to Ukraine in January in a dispute over prices. Gazprom wanted to raise prices fivefold for gas supplied to its neighbor, a former Soviet state. Cutting off gas to Ukraine forced the Polish government to cut deliveries to the chemical industry by 80 percent for three weeks, Wozniak said.

TITLE: Legislators Pass Amendments Making Way for Sale of Svyazinvest
AUTHOR: By Lyubov Pronina
PUBLISHER: Bloomberg
TEXT: MOSCOW — The State Duma on Friday approved amendments to the communications law that will speed up the sale of the government’s controlling stake in national fixed-line operator Svyazinvest.
The Duma cleared the amendments to the law in the second and third readings, Marina Novikova, an aide to Vladimir Gorbachev, deputy chairman of the Duma’s Energy, Transportation and Communications committee, said in a telephone interview. 
The changes will guarantee that law enforcement agencies are granted unlimited access to the networks of Svyazinvest’s seven regional fixed-line subsidiaries and long-distance operator Rostelecom, no matter who the new owner of the stake is, Dow Jones reported.
The government is gradually divesting its stakes in domestic companies that are not considered strategic to national security — strategic areas include oil and gas and machine-building — to ensure they are efficiently managed.
The government, however, has so far failed to sell its remaining 75 percent holding in Svyazinvest, which it has promised to do almost every year since 1997, when it auctioned 25 percent to a group of investors including U.S. billionaire George Soros for $1.88 billion. Soros later called the investment the worst he ever made.
IT and Communications Minister Leonid Reiman said earlier Friday that it would take between eight and 10 months to prepare for the sale of the government’s stake.
The sale of state assets may be further delayed after the presidential elections in 2008, as many federal agencies have to come to an agreement on what appears to be a sensitive issue, Reiman said. 
President Vladimir Putin still has to strike Svyazinvest from the list of strategic companies that cannot be sold.
“It considerably increases the chance of Svyazinvest privatization,’’ Stanislav Yudin, a telecommunications analyst at UralSib in Moscow, said about the amendments. 
“The window of opportunity is limited to the first half of 2007,” he said, referring to parliamentary elections due in 2007 and the presidential elections to follow.
n JPMorgan Chase recommended buying Russian telecommunications companies because they offered better returns and less risk than peers in Central and Eastern Europe, the Middle East, Africa and Latin America.
“The Russian wireline sector outshines most of its peers in our universe,’’ JPMorgan said in a report published Friday that initiated coverage of the Russian companies alongside 39 companies it tracks in those regions. 
“We expect solid growth for all stocks except Rostelecom, as the long-distance market appears less promising and market-share dynamics look challenging,’’ the bank said.

TITLE: Celeb CEO Strives to Bring Color to Russian Faces
AUTHOR: By Rebecca Hewitt
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW — For hundreds of thousands of people across Russia and the former Soviet Union, the person they credit with giving them the power to take control of their lives is not Vladimir Vladimirovich Putin but a tall Swede with an uncanny resemblance to Arnold Schwarzenegger.
As the chief executive of cosmetics firm Oriflame, Magnus Brannstrom is at the helm of one of the fastest-growing cosmetics companies in the Commonwealth of Independent States.
Under Brannstrom’s stewardship over the last 10 years, Oriflame has signed on 700,000 freelance salespeople. His job has taken him to every corner of the former Soviet Union, with pop-star treatment wherever he goes.
“It’s the nature of our business,” he said. “I became the symbol of Oriflame in Russia, even though it’s not my company. This is a people business and people are looking for someone to connect things to. In Russia, this seems even stronger than in many other places.”
Working with interesting people is what gets Brannstrom out of bed in the morning.
“We grew up during the Cold War thinking of Russians as being very disciplined and boring and having no heart, and then when you come here you find it is completely different,” he said. “They are exceptionally welcoming, friendly and really want to have a good time.”
Brannstrom sought out Russia. An interest in history, a desire for adventure and a military background all helped draw him eastward and as a student he combined a business and law degree with studying Russian. 
“The Soviet Union was intriguing, an adventure. Russia was different, and as an officer in the reserves, enemy red was always on the table, so in that sense it was natural to start learning Russian.”
Brannstrom grew up in the far north of Sweden, where his family has lived for the last nine or 10 generations. He was the first in his family to get a university degree.
“My parents played an enormous role in helping me see that the world is bigger,” he said. 
Brannstrom, himself now a father of three, recalled that when he first went abroad as an exchange student to the United States, his father sent him on his way with a Swedish expression, the gist of which was “you won’t get lost, the earth is round, you’ll stay afloat, there’s nothing to worry about.” 
After graduating in 1992, Brannstrom had a summer job in St. Petersburg before returning to Sweden to start an internship with Procter & Gamble. 
“I did three months but then I realized it was so boring! Sweden is a mature country where nothing happens,” he said. 
“In Russia everything was booming, there were opportunities to make money. It was the place to be.”
Brannstrom’s summer job had been with the Swedish companies building the Grand Hotel Europe in St. Petersburg, and after his departure from Procter & Gamble, he worked with others buying and refurbishing St. Petersburg real estate in order to rent it out to foreigners. At the same time, he helped Swedish companies that wanted to have subsidiaries in Russia start up their operations. His work with a Swedish beer company was particularly successful until new import duties ended the party early, and Brannstrom decided to return to Sweden with the company to shore up his credentials in the developed corporate world. 
But his business achievements in St. Petersburg had not gone unnoticed: he started to get offers to come back to Russia, and in the summer of 1996, having become acquainted with the company’s founders, he became the managing director of Oriflame’s Russian operations, based in Moscow. To this was added the firms’ CIS operations, then its Asian markets, before Brannstrom reached the top of the corporate ladder in 2005, when he was made chief executive. 
Brannstrom attributes much of his business success to his military training, first during Sweden’s compulsory military service then as a reserve officer during his student years. 
“It taught me self-discipline, getting a hold of yourself as an individual. I learned a lot about myself and my potential, my strengths and weaknesses,” he said.
The officer program teaches about the basics of leadership, he said, and offers practical leadership experience through working with soldiers.
“The military is also results-oriented; it’s not just leadership for the sake of popularity. It helps you learn to achieve with people. Some people know what they want to achieve but don’t understand how to get people alongside them to help them ... They don’t understand what fun it is to have people alongside you.”

TITLE: A Third Force in Broadband
AUTHOR: By Alexander Yankevich
PUBLISHER: Special to The St. Petersburg Times
TEXT: Competition on St. Petersburg’s broadband market is heating up — a third company with citywide coverage has announced its arrival on the market, which is only good news for consumers. 
Only two local ADSL-providers offer coverage over the whole city — one of them is Web Plus, which has been developing its service since 2000, and  Northwest Telecom, a local telephone monopoly. They are to be joined by the  cable television firm Television Company Saint-Petersburg (TCT), which has recently started active development of such services. 
Broadband is used as a general term to describe internet access where data transmission is no less than 128 Kbits per second, which allows, for example, the broadcasting of audio and video in real time. 
Today there are a number of broadband technologies. One of them, Ethernet (or Local Area Network (LAN)) uses fiber-optic cables to transmit data. Local office networks are built according to this technology. District (home) networks are built in a similar manner. ADSL technology has become one of the most popular means of access mainly because of its simplicity and convenience of installation — it allows high-speed access through an ordinary telephone line — due to a frequency separation of a signal, the telephone line remains free. The main condition made by the provider is to have the relevant equipment installed in city telephone stations. 
Dedicated broadband access is also offered by providers of cable TV which have invested into the modernization of existing networks and set up a reverse channel. There are also providers who offer access for private individuals through radio channels, for example, Weil-Com. 
The market for broadband access to the internet is currently at an active stage of development in St. Petersburg. According to some estimates, subscribers already number more than 100,000 (from more than a million St. Petersburg global net users in total). There are more than 100 firms on the market (if we include small home networks). From a technological point of view the picture seems quite varied. Home networks have the upper hand both in the number of companies and number of serviced subscribers — the latter numbering more than 50,000 in total. The distinctive feature of these companies is that they cover only one or two (a maximum of six) city districts (from a total of 17). 
Although there are currently only two ADSL-providers, by using the existing telephone network they can reach the majority of subscribers. 
Web Plus covers 85 percent of the city, with 35,000 subscribers connected to its ADSL service. Northwest Telecom covers 103 out of 170 automatic telephone stations and its subscribers number 14,000. Accordingly, they account for 30 to 35 percent of the market. 
The new candidate for citywide access, TCT, was established on the base of the State Unitary Enterprise “Saint-Petersburg Cable Television” which used to belong to City Hall. 
A controlling share in TCT was acquired by the holding company National Cable Networks (NCN) in December 2003, this latter having a number of cable assets in Moscow and in the Russian regions. It increased its share in TCT to 98 percent in 2005. 
NCN has also acquired two other companies in St. Petersburg — TelePlus and Svyaz-Capital — whose infrastructure is included in the TCT network. NCN is planning $50 million worth of investments this year.  
TCT is the largest provider of cable television on the territory of St. Petersburg — its coverage includes 1.4 million flats. 
Having acquired state assets, one of the basic tasks became the modernization of the network, including the launch of interactive services and access to the internet. 
However, this service had a long trial period, available only in a limited area in the Moskovsky district (near Zvyozdnaya metro station). At the same time, ever since the new joint-stock company came into existence, they have been renovating the network, so that now 70 percent of the network has been modernized.
At the end of last year the situation began to change. In particular, at the beginning of 2005 a specially developed brand called “Your Internet” was brought out and in the summer, when modernization of the network was completed and new head stations installed,  it was put into commercial operation in the Admiralteisky, Petrogradsky and Petrodvostsovy districts.
By the end of last year the service “Your Internet” covered 80,000 flats and 2,000 subscribers. The company has made huge advances over the last year — this service is now available in the Kirovsky, Krasnoselsky, Moskovsky, and Primorsky districts, while the number of connected households is around 200,000 and the number of active subscribers is 5,000 (an index of the well-developed home network in operation in several districts). 
“These activities show the providers’ intention to move beyond the city. Its network coverage and a high profile investor allows it to do this,” noted Oleg Lebedev, technical director of one of St. Petersburg’s largest home providers Matrix Network Solutions.
 “In current conditions the success of a future player depends on its behavior on the market and on its price policy, which, in conditions of existing competition, needs to be aggressive,” he said. 
On the other hand, an analyst at iKS-Consulting, Tatiana Tolmacheva, notes that citywide coverage is already a competitive advantage. 
“It guarantees a wider coverage of the target audience, which means higher potential for growth, not to mention such things as unified brand advertising, which is highly effective,” she said.
The company itself is making no secret of its plans. In the near future it plans to launch an internet service in the Frunzensky, Kalininsky, Kronshtadsky and Kolpinsky districts, to increase its presence in Petrogradsky, Primorsky and Moskovsky districts and in southwest St. Petersburg. It will have a presence in 10 districts and serve 15,000 subscribers by the end of the year, according to TCT Director general Victor Pinchuk (see interview, right).
By contrast, the development of broadband access via cable has faced difficulties. Local companies first announced the modernization of the cable network as far back as 1999, though the actual process of renewal started much later. 
Now all the city’s large players offer internet services — Telix, PAKT, Aurora, Rico-TV, Dominanta and Katrina. They mainly operate in particular districts and accordingly compete with their closest neighbors — local home networks.
More actively marketing its products is TCT. Over the last six months the company has brought out a new offer of unlimited access — one of the few companies offering 512 kbps — increasing the speed of its packages and decreasing by the half the cost of connection and equipment. 
At the beginning of June TCT announced a marketing campaign directed at strengthening subscriber loyalty. It once again reduced the cost of connection to the service “Your Internet” on condition of a minimum prepayment for the chosen tariff. 
“In fact, in terms of marketing, TCT is on the same level as ADSL-providers and large home networks which, from the beginning of this year have started to carry out different campaigns, playing around with various offers,” said the commercial director of the company “United Networks,” Dmitry Petrov. 
The city’s existing providers, Web Plus and Northwest telecom, are keeping a close watch on their new rival. 
According to the deputy director general and commercial director of National Cable Networks, Oleg Popov, “Like other providers which offer internet access through cable TV, TCT is a direct competitor to ADSL-providers, including us. However, the speed of access through the old analog cable TV network is limited and won’t allow the provision of additional services (content, video etc.).”
“At the same time we think that an aggressive marketing policy and the introduction of new technologies can help TCT become a serious competitor to ADSL-providers across the city. Time will show how that will be happen,” he said. 
“During the next three years, according to our estimations, there will be a broadband boom in St. Petersburg. Over this period the number of users should rise to 500,000. And by 2010 private individuals alone will number 500,000,” said Andrei Shirenko, general director of Web Plus.
“TCT has a good chance of competing across the whole city but its success will depend not on network coverage but on its direct work on the market and on technological innovation. Nevertheless, market growth will allow the involvement of another large company — that’s why we don’t feel our position is under threat just yet,” he said.

TITLE: Head of Cable Company Aims to Broaden Coverage
TEXT: We interviewed the director general of Television Company Saint-Petersburg (TCT), Viktor Pinchuk, to find out more about the third pretender on the citywide broadband market. 

TCT’s network coverage means it has the potential to become the third provider of citywide broadband, alongside Web Plus and Northwest Telecom. When this will happen? How fast are you developing?
Our development is, without doubt, strategically directed towards increasing network coverage. In 2006 we plan to attain our maximum possible coverage and to connect about 15,000 subscribers.

Is it true to say that until the middle of last year you had not been actively developing the project “Your Internet,” including its tariff policy? Why was there such a delay when the brand had already been created?
Last year the service was offered only on a local scale, in one or two districts — that is why it was pointless promoting it citywide. The expansion of coverage first of all involves the modernization of the cable network — as this process progresses so the coverage of the service increases.
At the moment we are actively promoting our service with the help of direct mail where we explain to our potential subscribers in detail all the advantages of the service, and our various price offers. We also have a call center to promote our services. 
“Your Internet” is only present locally — we are planning more advertising when the network coverage increases. 
As for our tariffs, the first six months of this year saw a lot of activity on that front. We have made a series of offers and don’t exclude the launch of others. We are keeping a close watch on the market, and the wishes of potential subscribers. In view of the considerable growth in demand for this segment of the market we do not exclude developing our policy on tariffs and offering more additional services. 

What do you think are your competitive advantages as a cable provider in conditions where ADSL-providers and providers of home networks are in active competition?
Our main competitive advantage is the opportunity to provide TV and internet through the same carrier. With high demand for internet access in so called “sleeping” (residential) districts and the presence there of a high number of often illegal home providers, the company intends to offer these districts high-speed internet access at a competitive price. We hope that other competitive advantages, such as convergence, broad coverage, investment opportunities and 24-hour technical support, will allow the company to take up a serious niche in the broadband market.

TITLE: Capital Inflow Into Russia Hits $16.1 Billion
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia lured $16.1 billion of capital inflows in the second quarter, a record high, the Central Bank said Friday.
The net inflow in the three months ended June 30 compares with a revised $4.7 billion outflow in the first quarter and $5.3 billion of outflows in the year-earlier period, the Central Bank said. The figures are an initial estimate.
The inflow of funds has helped push the ruble up 7 percent against the dollar since the end of December, touching a 6 1/2-year high last month.
The flow of funds into the country may increase further after the government on July 1 ended restrictions on foreign purchases of the ruble and domestic bonds, the legacy of Russia’s 1998 default on $40 billion of domestic debt. It means foreigners can now open deposits in rubles and trade the currency overseas.
The influx of money has allowed the government to set aside cash to repay debt. Russia on June 30 signed an agreement with the Paris Club of creditor nations for an early repayment of its entire debt, worth about $22 billion.
Russia’s $770 billion economy could expand 6.4 percent this year, its eighth consecutive year of growth and faster than government forecasts, Economic Development and Trade Minister German Gref said on June 21. 
That may lead the government to revise its growth forecast from 6.1 percent, Gref said.
The Organization for Economic Cooperation and Development said in a report published Wednesday that Russia must step up efforts to attract foreign direct investment after dropping the curbs on overseas investment in its bond and currency markets.

TITLE: What ‘Energy Security’ Really Means
AUTHOR: By Sebastian Mallaby
TEXT: At their annual gathering each summer, the leaders of the rich world promise to fix some pressing global problem — and usually fail to deliver. This month’s Group of Eight summit in Russia takes statecraft to a whole new level. Global leaders have “energy security” on the agenda. But judging by what they say and do, they don’t always understand the subject.
For many American leaders, energy security means producing energy at home and relying less on foreigners. But the United States imports three-fifths of its oil, and the share is heading up. For the foreseeable future, alternative fuel is unlikely to change that.
For China, which isn’t part of the G8 but participates in some of its meetings, energy security means buying stakes in foreign oil fields — in Sudan, Nigeria, Angola and so on. But this doesn’t make China any more secure. If a geopolitical crisis broke out, China’s tankers might be blocked on the high seas; owning chunks of Africa’s oil wouldn’t make much difference. In the absence of a crisis, African investments make little more sense: China can buy oil on the world market.
For Russia, which pushed energy onto the G8 agenda, energy security has yet a third meaning: restrictions on foreign investment in domestic oil and gas fields. But this is the mirror image of the Chinese mistake. Just as China’s security isn’t boosted by owning African resources, Russia’s security isn’t reduced by allowing foreigners to own Russian ones. In a crisis, Russia would control its oil fields by military force. Short of a crisis it can extract taxes and royalties from foreign energy firms just as it can from Russian ones.
So there’s no sense in these nationalistic conceptions of energy security. As Daniel Yergin has written recently in Foreign Affairs, real energy security requires setting aside the pipe dream of energy independence and embracing interdependence.
Energy interdependence can actually be good for energy security: Just look at natural gas markets. Right now, nearly all the natural gas that Americans consume comes from U.S. and Canadian fields; only 3 percent comes into the country by tanker in the form of liquefied natural gas. This renders the United States highly vulnerable to disruptions on its home continent. If terrorists or a hurricane took out a key pipeline it would be hard to bring in alternative supplies from outside North America and prices would spike upward. By buying more liquefied natural gas from a diverse range of foreigners the United States would reduce its energy independence but enhance its energy security.
For different reasons, the oil market also shows why leaders should embrace interdependence. Because oil is traded globally, a supply disruption anywhere will affect gas prices in the United States. There is no use in thinking nationalistically. If there’s an explosion in a Chinese oil field that serves Chinese consumers, it will force the Chinese to buy more oil on the world market and so drive up the global price: American motorists will suffer. So China’s energy security is not in competition with U.S. energy security, as the resource-scramble model would suggest. China’s energy security is part of U.S. energy security.
Equally, there’s a lot of breast-beating in the United States about the country’s strategic oil reserve. The idea of vast bunkers full of crude conjures pleasing feelings of national self-sufficiency: The heck with those foreigners, we can take care of ourselves! But this is mostly a delusion. If the United States releases oil from its reserve, the benefit is dissipated around the world since the global oil price is affected. To have a serious impact on that price, the United States needs Europe and the advanced Asian countries to release oil from their stockpiles in a concerted way: Far from being a tool of national self-sufficiency, strategic oil reserves are a classic multilateral instrument. There’s an urgent need to bring the big emerging economies into the International Energy Agency, which coordinates the reserves held by the rich countries.
What about U.S. relations with energy suppliers; surely here the model of nationalistic competition is relevant? The Arab oil embargo of 1973 demonstrated the danger of a conflict between suppliers and consumers, and Russia’s withholding of natural gas from Ukraine last winter shows that embargoes remain possible. But suppliers know that strong-arm tactics are the surest way to accelerate the search for alternative fuels, which is why Russia plays politics with energy more by giving out subsidized supplies than by refusing to sell any. The threat of an embargo by oil states is therefore smaller than the threat of violence by non-states — rebel attacks in Nigeria’s oil delta, an al-Qaida strike in Saudi Arabia. In this sense the energy security of producers is not in competition with that of consumers. They are interdependent.
If the G8 summit can spread the word about this interdependence, it will do some good. But the nationalistic conception of energy security is worse than useless. By encouraging a competitive scramble for resources that could spiral into conflict, this sort of security talk only creates insecurity.

Sebastien Mallaby is a columnist for the Washington Post, where this comment was published.

TITLE: Ukraine’s Rich Start Banking On Their Wealth
PUBLISHER: Vedomosti
TEXT: The Ukrainian magazine Korrespondent and investment company Dragon Capital recently compiled a list of that country’s richest people. The list includes only 30 names, and the total worth of the Ukrainian top 30 is a bit more than $38 billion. The total capital for the top 100 Russians in the Forbes list is more than six times higher, at $248 billion. The combined worth of the three richest men on the Russian list (Roman Abramovich with $18.3 billion, Vagit Alekperov with $12.7 billion and Vladimir Lisin with $11.3 billion) alone outstrips that of the whole Ukrainian list of 30.
It is no surprise that the Ukrainian list loses to its Russian counterpart in absolute terms because Ukraine has a GDP of only $84 billion to Russia’s $802 billion. What is more interesting is a comparison of the types of people who are on the two lists. 
The overwhelming majority of those on the Russian list are connected in some way with natural-resource exports. Those associated with the energy sector account for 40 percent of the total, while steel and metallurgy are also heavily represented.
The top sector on the Ukrainian list is metals, accounting for more than half.
The biggest difference between the two lists is the greater presence of bankers in the Ukrainian top 30. Among the Russian top 100, only 16 own significant banking assets, while the Ukrainian list includes 18 bankers. 
As a percentage, banking accounts for 60 percent of the names on the Ukrainian list. Furthermore, most of the Russian banking names are also involved with industrial majors, with PromStroibank’s Vladimir Kogan ($530 million) the only one who earned his fortune exclusively in the financial sector. Five of the members of the Ukrainian list earned their wealth strictly in banking, with their combined assets accounting for 5 percent of the whole list.
The 30 wealthiest Ukrainians fully reflect reality: The Ukrainian banking sector is developing at a much faster pace than Russia’s. According to Standard & Poor’s, loan activity in Russia grew by 10 percent over the first half of 2005, while the figure for Ukraine was more than 20 percent. 
Over the last five years, total credit from Russian banks relative to gross domestic product has grown by 10 percent, while the figure for Ukraine was 26 percent. 
It’s no surprise, then, that total loans in Ukraine in 2005 equaled 35 percent of GDP and that in Russia the figure was just 20 percent.
The development of the financial sector is the guarantor of a diversified economy. When more of Russia’s top 100 are bankers, there will be fewer depending on oil and metals.

This comment was published as an editorial in Vedomosti.

TITLE: More Complex Production
AUTHOR: By Alexander Golts
TEXT: Thanks to unprecedented oil prices, the Kremlin has tons of money. It is now trying to use this windfall to modernize the country and has given tasks to both of the likely presidential successors. First Deputy Prime Minister Dmitry Medvedev has been assigned the four national projects, but it is becoming clearer there that the money is simply going to go to the bureaucrats.
Now Defense Minister Sergei Ivanov is also at work. In speech after speech, Ivanov has been insisting the military-industrial complex can drive the Russian economy. As proof, he has noted that defense industries account for more than 70 percent of all high-tech products and employ more than 50 percent of the country’s scientists. Ivanov also maintains that by 2115 Russian defense industries will devote more than 70 percent of their production capacity to the manufacture of civilian goods.
The country’s leaders suddenly are beginning to see the military-industrial complex as a source of technological innovation. Recent Security Council discussions testify to this. President Vladimir Putin, Prime Minister Mikhail Fradkov and Ivanov have agreed that Russia desperately needs a technological breakthrough to give it an appropriate place among world economic leaders. This breakthrough could come, they maintain, in military technology.
This is true — in theory. Defense spending is the softest form of state economic incentive: It is allocated over time, tightly controlled and not likely to lead to inflation. As a result, the country also gets the modern tanks, submarines, aircraft and missiles it needs. Defense spending may also lead to an innovation that could serve as the basis for stable growth. This is what happened with former U.S. President Ronald Reagan’s “Star Wars” program. It ultimately failed to produce a viable weapon, but it did produce hundreds of advanced technological innovations.
But can Ivanov provide this kind of economic growth? I don’t think so. To turn defense industries into a driving force for the economy would require a major revamping of the entire system. During the Soviet and post-Soviet periods, there were attempts to use military technology in civilian industries. All we got were shovels and titanium pots.
Even today, attempts to produce domestic goods are continuing at defense factories. This is the re-creation of the Stalinist industrial model, in which the civilian and military sectors are inextricably linked.
Paradoxically, in order to introduce advanced technologies successfully, the civilian and military sectors must be strictly separated. Only this removes the temptation to create universal parts that can be used to make both weapons and consumer goods — there’s an old joke about the worker who tried to assemble a sewing machine and kept getting a machine gun. In order to use advanced technology in the civilian sector a product has to be inexpensive, widely used and mass-produced. In the early 1980s, the Americans put defense production in private hands, which facilitated the rapid use of advanced technologies in the civilian sector.
But Russia is going in the opposite direction. It is trying to fit relatively efficient defense companies in the aviation and shipbuilding industries into holding companies with strict top-to-bottom command structures. But the use of advanced technologies is impossible within structures managed by bureaucrats. 
By creating specialized holding companies for particular kinds of military equipment the state is producing monopolies. With stable state funding (300 billion rubles, or $11 billion, next year), these monopolies have no incentive to use advanced technologies for the production of civilian goods, let alone to develop the new technologyies in the first place. By copying the organizational principles of the Soviet military-industrial complex, Ivanov is ensuring the samer Soviet-era stagnation — where the results will never justify the spending.
For months now, Ivanov has been sounding the alarm about constant price hikes for military supplies, but he doesn’t seem to understand that the ministry is the hostage of the monopolies it created. Even now, instead of new weapons, they are foisting off warheads that were developed 20 years ago and a fighter plane that was test flown a decade ago.
There’s no point even mentioning competitive civilian products. Monopolies that are milking the government dry don’t need to produce consumer goods. Talk about innovation will remain just that: talk. Meanwhile, billions of rubles spent on the defense industry will disappear without providing so much as a nudge to the economy.

Alexander Golts is deputy editor of the online newspaper Yezhednevny Zhurnal.

TITLE: A Rough Selection Campaign
AUTHOR: By Samuel Charap
TEXT: A recent game of musical chairs in Russia’s law enforcement agencies saw Vladimir Ustinov, the long-serving prosecutor general who managed the case against Mikhail Khodorkovsky and the dismantlement of his company, Yukos, exchange posts with Justice Minister Yury Chaika. The swap has fueled speculation about an intensification of turf wars between competing factions within the Kremlin. Pundits have speculated that the reshuffle was a slap on the wrist from President Vladimir Putin to Ustinov, who had recently increased his public profile in a purported attempt to put himself forward as a presidential contender representing the hard-line siloviki grouping in the Kremlin. Although the talk was highly speculative, the reshuffle was still a clear sign of tension in the executive branch. In this sense, the job swap between Ustinov and Chaika is indicative of the general instability that is likely to characterize politics in the run-up to the 2008 presidential elections.
The question of who will become Putin’s handpicked candidate to run in and, almost certainly, win that vote dominates much of the discussion in contemporary politics. The conventional wisdom is that Putin will anoint a successor from among his coterie, who will then have the Kremlin’s administrative, financial and media resources at his disposal. Since the chronically weak and divided Russian opposition is unlikely to put forward a viable candidate, the story goes, the election will be a banal formality with little in the way of real competition or controversy. The focus is thus on reading the tea leaves to determine whom Putin will choose as his successor. According to this logic, the pre-election period will be a political beauty contest between various top officials.
However, the simmering personnel conflicts within the Kremlin demonstrate that this narrative misses the point. While it is true that the election is likely to be little more than a formality, the selection process — whereby one member of the ruling elite is chosen to be the Kremlin candidate — is likely to be conflictual and possibly destabilizing, both politically and economically.
Ironically, Putin himself was propelled into power during a similar search for a successor when Boris Yeltsin decided that he would step down before the end of his term in office. But Putin’s own policies over the past six years have transformed the politics of the selection process — and politics in general — into a zero-sum game with disastrous consequences for the losers.
While Khodorkovsky’s arrest is the most celebrated example of this sort of politics, a more relevant case is that of Boris Berezovsky, the tycoon chased out of Russia in 2001. Berezovsky was instrumental in Putin’s selection and spent large sums in support of his campaign. Yet soon after his election, Putin turned on Berezovsky, eventually forcing him out of the country and into exile.
The lesson of this episode is that even pre-election support for a candidate does not guarantee post-election security. Any official or businessman, no matter how loyal, can lose his assets, freedom or worse at the whim of the president. The Kremlin factions must be keenly aware of this. They cannot be sure that anyone but one of their own can ensure their safety once Putin is gone. For them, there is no such thing as a compromise candidate. They will thus do all they can between now and 2008 to make sure the selection process is decided in their favor.
The prospect of this selection process — which unlike an election is not governed by any laws or norms of conduct — becoming conflictual is all the more disconcerting because of the resources available to the competing factions. The unprecedented concentration of political and economic power in the executive branch presided over by Putin has armed these groups with huge resources — including, for example, entire ministries, armed services, public utilities, billions of dollars in the bank and major media outlets — that they can deploy to undermine one another during the selection process. The siloviki will gain a new war chest this month from the IPO of Rosneft (chaired by the man many identify as the head of their faction, presidential deputy chief of staff Igor Sechin), which is expected to bring in over $10 billion.
During the selection process, the conflict between the factions is likely to break into the open. How this struggle will manifest itself is a good question, but the factions now have a veritable arsenal of instruments that can be expended in the battle to choose the Kremlin candidate. Given the stakes, there is every reason to believe that there will be no holds barred in this campaign.

Samuel Charap is a doctoral candidate in political science at St. Anthony’s College, Oxford University.

TITLE: Little Sign of Top Web Questions
AUTHOR: Vedomosti
TEXT: President Vladimir Putin’s contact with the Russian public via the Internet last week was illuminating. The questions submitted for Putin were as interesting as the answers the president gave. The 160,000 different questions asked by a total of 1.2 million people provide a portrait of a very promising segment of society — the country’s 22 million Internet users, of which, according to a study conducted by Romir Monitoring in April, 63 percent are between the ages of 18 and 34.
The popularity of questions about robots and giant squids says less about people’s willingness to take the exercise seriously than about the ability of certain groups to mobilize their resources. But a general breakdown of themes allows us to make some generalizations about the interests of the Internet audience. The most popular questions concerned housing, living standards, Putin’s personal life, education, economics and business, the army, pensions and benefits, corruption and bureaucracy. Nearly all of these are related to the message being pushed by the government and national television and are in some way related to support for the national projects. First Deputy Prime Minister Dmitry Medvedev’s responsibilities appear to be more fashionable than those of Defense Minister Sergei Ivanov. Questions about the army, hazing and the country’s defense capabilities ranked a mere sixth in overall popularity.
Even more interesting were the questions within the more general themes. For example, the top two spots within the economic bloc were related to the alcohol market. There was, conversely, only one question about inflation. There was, however, a great deal of concern over the situation with small business, accounting for five of the top 20 questions. The most popular housing questions, as might be expected, consisted mostly of appeals for help. Concerns over living standards, if six of the top 20 questions are a fair indicator, would best be addressed by raising salaries and pensions. The redistribution of profits from natural resources was touched upon in only one question. Not long ago, populist slogans of the same sort would have been a surefire way to election success.
That, as it turned out, Putin did not provide answers to the most popular questions is not surprising. In contrast to the questions, the answers were filtered. Popular and responsible themes like poverty, housing and small business remained largely uncovered. The televised answers covered a number of international themes and questions that generated little interest among Russian Internet users. And the G8 seemed to be of no interest to anyone at all.

This editorial was published in Vedomosti.

TITLE: Reading the Russians
AUTHOR: By Richard Lourie
TEXT: “Read Dostoevsky.” That was the advice presidential deputy chief of staff Vladislav Surkov, reportedly President Vladimir Putin’s top ideological aide, offered Westerners seeking to better understand Russia. What exactly did he mean? And why Dostoevsky instead of, say, Gogol, whose characters, grotesque in their greed, would be right at home in post-Soviet Russia?
That Russians elude understanding — because they are too different, too deep or too irrational — is an image promoted by both Russians themselves and foreigners. Winston Churchill called Russia “a riddle wrapped in a mystery, inside an enigma.” Fyodor Tyutchev, the 19th-century Slavophile poet and diplomat, wrote that Russia’s essence was invisible to the “foreigner’s haughty eye.” And 20th-century philosopher Nikolai Berdayev went as far as to say that the Russian psyche was structured differently from the European; the Russians had their unconscious where the Europeans had their consciousness and vice versa. But it is Dostoevsky’s characters who best embody the Russian people’s unique and irrational elements. The rationalistic, moralistic self-interest of the bourgeoisie was alien to the Russian, whose soul was as broad and open as his native land. The Russian needs to be swept up by something greater — a cause, a faith, an idea.
 There’s something to all this epic mystic booziness, of course — Russia did come up with Stalin and Rasputin in the same century. But the real purpose behind Surkov’s statement was to deflect criticism from Russia’s obvious return to centralized authoritarian government. You can’t criticize us because you can’t understand us. Read Dostoevsky to understand Russian contradictions. (When the opposition political parties recently complained they weren’t being given proportionate media coverage, Putin spoke out on their behalf and they were soon being lambasted at length in prime time.)
Surkov wants it both ways. Not only should Russia not be judged too quickly or harshly because of its Dostoevskian exceptionalism, it still is just another member of the European family. “Russia’s version of European culture is of course a specific one, but no more specific than Germany’s, France’s or Britain’s,” Surkov said.
Surkov can have it both ways because contradiction is the essence of the Russian psyche. His own career proves it. Surkov used to be an aide to Mikhail Khodorkovsky, former head of Yukos, before he was destroyed by the same Kremlin Surkov now serves.
It’s true that Russia has a specific history that shapes its present and that amnesiac Americans should take that history into account. But it is also true that statements by presidential advisers, no matter how intelligent or true, have but a single purpose — to serve the people and the party in power. Putin is the one in power, and questions abound whether he will relinquish that power in 2008. A friend in the U.S. State Department who met Putin early on said of him: “He’s the second most unreadable person I’ve ever met.” (Former FBI director Louis Freeh was No. 1). Putin’s administration displays some of that unreadable quality because things are becoming better and worse at the same time. But its overall goal is clear — the return of Russia as a power to be reckoned with.
Russians have always been great readers and writers, and perhaps the key to today’s Russia is indeed to be found in literature, though not in Dostoevsky, nor in the post-communist renaissance that failed to materialize. According to its web site, the Federal Security Service is currently sponsoring a contest for the best works of literature and art about the “activities of the organs of the Federal Security Service.” Manuscripts should be sent to Lubyanka.
It wasn’t so long ago that it was authors themselves who were being sent to Lubyanka. So what do those inscrutable, contradictory foreigners have to complain about?

Richard Lourie is the author of “The Autobiography of Joseph Stalin” and “Sakharov: A Biography.”

TITLE: American Dream
AUTHOR: By Chris Floyd
TEXT: In the mystic haze of midsummer, a most unlikely Oberon stepped forth last week to fling a spray of fairy light across the murk, rousing the ill-enchanted sleepers with the hope that dawn had finally come again. But as the magic glow fades, the spell-struck victims will likely find they are still caught in a curse of perpetual night.
We speak of course of the U.S. Supreme Court decision that struck down the ludicrous and lawless “military tribunals” concocted by President George W. Bush to serve as meat grinders for the captives in his War on Terror. Led by the sprightly 86-year-old Justice John Paul Stevens, a narrow court majority delivered a stinging rebuke to Bush’s assumption of imperial powers over the past five years, clearly rejecting the fundamental principle underlying the Crawford Caligula’s foul misrule: that the president’s unbridled will is the law.
The ruling has been hailed as a “victory for democracy,” the “light at the end of the tunnel,” a “turning point” in the long struggle to reclaim the republic from the usurping junta of the Bush regime. But we have seen these lights before, and watched them fade. All the previous “turning points” — scandals, atrocities, judicial rebuffs, investigations, convictions — have only led to more depredations; every seeming defeat of unlawful power becomes instead a springboard for its further advancement. There is no reason to think it will be any different this time. 
 To be sure, Stevens and his allies fought a valiant rear-guard action on behalf of liberty. They could have restricted their response to the narrow technical points at issue in the case, but instead they took a broad scythe to the rank undergrowth of legal perversion spawned by the White House and its chief constitutional corrupter, David Addington, the ruthless vizier to Vice President Dick Cheney. 
As The New Yorker reports, all laws now pass through the hands of this unelected factotum, who feverishly screens them for any possible encroachments on presidential power — then writes the “signing statements” that Bush appends to every major piece of legislation, declaring that he will follow the new law, or not, as it suits him. 
“I’m the decider,” as Bush likes to say in his cretinous playground patois. But it is Addington and Cheney who have sown the noxious weeds of tyranny that Bush so happily grazes upon.
So there was rich irony in seeing their malevolent system chastised by Stevens, a conservative Republican whose 1975 appointment by President Gerald Ford was certainly handled by Ford’s powerful chief of staff: an ambitious apparatchik named Dick Cheney. And the Stevens decision would indeed be a landmark ruling, a return to sanity — if we were still in an era where the institutions of American government and society were actually functional, and officeholders felt bound by law. But if there is no political will in the American establishment to enforce the ruling, it will be nothing more than a pretty ornament for the republic’s coffin.
And where does that will exist? Not in Congress, not in the media, not in the streets — and certainly not in the confused, craven Democratic opposition. Yet the true nature of the regime’s wide-ranging war on liberty has been glaringly obvious for years. We’ve been writing here about Bush’s power grab since November 2001, when we noted that he had given himself the right to order the killing or incarceration of anyone on earth whom he arbitrarily deemed a terrorist — or even a terrorist suspect. This was reported openly at the time, with approval from the gung-ho corporate media and the U.S. political establishment, with record-breaking poll numbers for Bush and with nary a peep from the Democrats. The first press reports of tortured captives quickly followed, again without controversy. 
Indeed, for all its reputed obsession with secrecy, the Bush regime has been remarkably open about its usurpations. “Extrajudicial killing,” torture, indefinite detention, mass surveillance, defiance of court rulings and Congress, employment of death squads, an unprovoked war of aggression — all have been carried out openly, readily apparent to anyone with access to mainstream media sources. That the Supreme Court has only now challenged the essence of Bush’s claim to authoritarian power is poignant testimony to how deep the rot of tyranny has spread.
Bush’s reaction to the ruling is more evidence of the decay. After a vague, haughty promise to “look at the findings” — rather than simply obey them, as the law requires — Bush declared: “One thing I’m not going to do, though, is I’m not going to jeopardize the safety of the American people. People have got to understand that.” Thus, in his mind, the circular reasoning that forms the core of his authoritarian philosophy remains intact: Any action that he arbitrarily declares necessary to ensure “the safety of the American people” cannot be restrained by laws or courts.
Already, the lickspittle, lock-step Congress is preparing to belch forth laws to retroactively legalize past Bush crimes and countenance future offenses. 
As legal scholar Mark Garber notes, this will likely satisfy at least one of the court’s wavering moderates when the next test of Bush’s tyranny comes around, sinking the razor-thin majority for liberty — which will soon disappear in any case when the ancient Stevens shuffles off this mortal coil. His bold stroke for freedom was magic indeed, but it may prove, in the corrupted currents of this world, to be such stuff as dreams are made on.

TITLE: Pirate Sequel Finds U.S. Box Office Gold
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — Johnny Depp’s boozy, woozy buccaneer Jack Sparrow has plundered the box office, with “Pirates of the Caribbean: Dead Man’s Chest” taking in a record $132 million in its first three days, according to studio estimates Sunday. 
Disney’s swashbuckling sequel sailed past the previous all-time best debut, 2002’s “Spider-Man,” which took in $114.8 million in its first weekend.
“Dead Man’s Chest” also did nearly three times the business of its predecessor, “Pirates of the Caribbean: The Curse of the Black Pearl,” which took in $46.6 million over opening weekend in 2003.
The sequel surpassed that total in its first day alone, taking in $55.5 million Friday to beat the previous single-day record of $50 million, set last year by “Star Wars: Episode III — Revenge of the Sith.” With $44.7 million on Saturday, “Dead Man’s Chest” also became the first movie to top $100 million in just two days.
Despite sky-high projections for the “Pirates” sequel from industry analysts, producer Jerry Bruckheimer said he had expected “Dead Man’s Chest” to open closer to the $77 million debut weekend of last spring’s “The Da Vinci Code.”
“When people in the industry predicted these high numbers, I thought they were just trying to be mean. So no matter how good we did, if we did $100 million, we’d be failures,” Bruckheimer told The Associated Press on Sunday. “I didn’t think we’d get near these numbers.”
The movie sent Hollywood’s overall business soaring. The top 12 films grossed $206.5 million, up 48 percent from the same weekend last year, when “Fantastic Four” opened with $56.1 million.
“Dead Man’s Chest” raked in nearly double the total of the rest of the top 12 combined. The previous weekend’s top film, “Superman Returns,” fell to No. 2 with $21.85 million, down 58 percent from opening weekend.
“Superman Returns” has grossed $141.7 million in 12 days and should fly past the $200 million mark, said Dan Fellman, head of distribution for Warner Bros., which released the film.
The sci-fi tale of drug addiction “A Scanner Darkly” debuted strongly in limited release with $406,000 in 17 theaters. Shot in live action then painted over with digital animation, the movie stars Keanu Reeves,Winona Ryder and Robert Downey Jr. in a hallucinatory tale adapted from Philip K. Dick’s novel. 
In a single weekend, “Dead Man’s Chest” reeled in 43 percent of the $305 million total domestic gross the original “Pirates” rang up in its entire six-month theatrical run.
The movie’s audience was equally divided between males and females, and it drew strongly from all age groups, according to Disney.
“It is straight across the board,” said Chuck Viane, head of distribution for Disney, which based the movies on its “Pirates of the Caribbean” theme park ride. “Everybody’s coming. Whoever it is, they’re there.”
Even factoring in higher admission prices since 2002, “Dead Man’s Chest” still set a record of just under 20 million tickets sold, about 200,000 more than “Spider-Man.”
“Maybe the only movie that has a chance to beat this record might be the next ‘Pirates’ movie,” said Paul Dergarabedian, president of box office tracker Exhibitor Relations.
Audiences won’t have to wait long. Disney shot much of the third installment at the same time as “Dead Man’s Chest,” which ends in a cliffhanger leading into part three, due in theaters over Memorial Day weekend next year.

TITLE: IN BRIEF
TEXT: Nielsen Hitched Again
NEW YORK (AP) — Brigitte Nielsen, the model and actress, married her fifth husband, Mattia Dessi, on Saturday — 17 months after a ceremony that wasn’t legal because she hadn’t finished divorcing hubby No. 4, People magazine reported on its web site. 
The ceremony last year between Nielsen, 42, and Dessi, a 28-year-old Italian former model, was “more like an official engagement,” said Nielsen’s manager, Luigi Balduini.
They officially tied the knot in Malta, People reported. Their earlier ceremony took place in the Dominican Republic, while Nielsen was still married to former racecar driver Raoul Meyer. She was previously married to Sylvester Stallone and has a son with former NFL star Mark Gastineau.

Pavarotti Stops Farewell
LONDON (AFP) — Famed Italian tenor Luciano Pavarotti has canceled all his remaining farewell concerts scheduled for this year after undergoing cancer surgery, his manager said in London. 
Pavarotti, 70, who has already called off several concerts on his world tour this year, needs time to recover and will undergo treatment over the next few months instead.
He was preparing to leave New York last week to restart his performances in Britain when doctors, worried about results from a routine medical check-up, sent him back to hospital for an assessment.

Venice Honors Lynch
ROME (AFP) — U.S. filmmaker David Lynch is to be awarded a Golden Lion at the Venice Film festival for his contribution to modern cinema.
The Oscar-nominated director known for his dark and disturbing films including “Blue Velvet,” “Eraserhead” and “Twin Peaks” will be awarded the prize on Sept. 6, as part of the festival which opens in the Italian city on August 30.
Lynch “is a director who has had a major influence on contemporary imagination thanks to his visionary and troubling style,” the festival organizers said in a statement on Friday.
He was behind “the new independent American cinema and opened the way for others such as the Coen brothers, Jim Jarmush, Spike Lee, Quentin Tarantino,” they added. Lynch won the Palme d’Or at the Cannes Film Festival in 1990 for “Wild At Heart.”

TITLE: Gehry Goes Guggenhiem Again in Small Gulf State
PUBLISHER: The Associated Press
TEXT: ABU DHABI, United Arab Emirates — The Guggenheim announced plans Saturday for a Frank Gehry-designed art museum in Abu Dhabi, a coup for the small Persian Gulf nation and the latest international franchise for the ambitious foundation. 
With its flagship museum in New York and branches in Las Vegas; Berlin; Venice, Italy; and Bilbao, Spain, the Guggenheim said its new outpost in Abu Dhabi would be its biggest venture yet.
“This is hugely ambitious, the scale of it is amazing, and they have the resources to do it,” foundation director Thomas Krens said after signing the deal with the government and royal family of Abu Dhabi, one of the seven city states of the United Arab Emirates.
“It will have an enormously beneficial impact on how creativity is viewed in this part of the world,” Krens said.
The museum will sit on a manmade spit jutting into the Gulf from the currently uninhabited Saadiyat Island, which lies adjacent to Abu Dhabi. With a price tag of just over $200 million, the building will be completed in about five years.
The renowned Gehry designed Guggenheim Bilbao — with its distinctive titanium-sheathed curves — considered by many to be his masterpiece and one of the world’s great modern buildings. His other projects include a Seattle museum dedicated to rock icon Jimi Hendrix and the Walt Disney Concert Hall in Los Angeles.
The Canadian-born architect said the Arabian desert has a “much different feel” than the desert near his California home and would require him to “invent a different kind of architecture that belongs here.”
“I want to play off the blue water and the color of the sand and sky and sun,” Gehry said Saturday. “It’s got to be something that will make sense here. If you import something and plop it down, it’s not going to work.”
He said his design would be unveiled in November, when the Guggenheim Foundation plans to bring a collection of Russian modernist paintings to a temporary exhibition space in Abu Dhabi’s Emirates Palace hotel.
Announcing the new museum, Crown Prince Sheik Mohammed bin Zayed Al Nahyan said the nation plans to acquire a top collection for the museum by the time it opens in 2012.
The project poses some striking cultural juxtapositions, bringing a museum named for a powerful Jewish-American family and designed by a Jewish architect to the capital of an Arab country that refuses diplomatic ties with Israel. The foundation — established by millionaire philanthropist Solomon R. Guggenheim in 1937 — is a pillar of U.S.-European culture yet will have its largest presence in a Muslim country with no world-class art museums.

TITLE: Polanski Relates to ‘Oliver’
PUBLISHER: Reuters
TEXT: JERUSALEM — When Roman Polanski adapted the story of orphan Oliver Twist to the big screen, he drew inspiration from his own childhood during World War II, the director told a news conference on Sunday. 
“I can relate to the situation. You know [Oliver’s] long walk to London? I went through it exactly at the same age that the boy did,” Polanski said in Jerusalem, where his 2005 movie “Oliver Twist” is being shown at a film festival this week.
The film had poor commercial success worldwide but has won attention in Israel, a country where many survivors of the Nazi Holocaust live and where Polanski is to receive a lifetime achievement award. 
The story of an orphan living on the streets of London in the 19th century, Oliver Twist is one of the most popular novels written by Charles Dickens.

TITLE: U.S. Troops Face Rape Accusation
PUBLISHER: The Associated Press
TEXT: TIKRIT, Iraq — Four more U.S. soldiers have been charged with rape and murder and a fifth with dereliction of duty in the alleged rape-slaying of a young Iraqi woman and the killings of her relatives in Mahmoudiya, the military said Sunday. 
The five were accused Saturday following an investigation into allegations that American soldiers from the 101st Airborne Division raped the teenager and killed her and three relatives at her home south of Baghdad.
Ex-soldier Steven D. Green was arrested last week in North Carolina and has pleaded not guilty to one count of rape and four counts of murder. He was ordered held without bond on the charges, which carry a possible death penalty.
The U.S. statement said the five soldiers still on active duty will face an Article 32 investigation, similar to a grand jury hearing in civilian law. The Article 32 proceeding will determine whether there is enough evidence to place them on trial.
One of the soldiers was charged with failing to report the attack but is not believed to have participated in it directly, the statement said. The four facing murder charges could face the death penalty if convicted.
The names of the five were not released, but a U.S. military official, speaking on condition of anonymity because of the ongoing investigation, said Sunday that the soldiers recently charged are two sergeants, two privates first-class and one specialist.
The March 12 attack on the family was among the worst in a series of cases of U.S. troops accused of killing and abusing Iraqi civilians.
U.S. officials are concerned the alleged rape-slaying will strain relations with the new U.S.-backed government and increase calls for changes in an agreement that exempts American soldiers from prosecution in Iraqi courts.
Prime Minister Nouri al-Maliki has demanded an independent investigation into the case, which followed a series of claims that U.S. troops killed and mistreated Iraqi civilians.
According to an FBI affidavit filed in Green’s case, he and at least two others targeted the teenager and her family for a week before the attack, which was not revealed until witnesses came forward in late June. 
The affidavit estimated the rape victim was about 25. But a doctor at the Mahmoudiya hospital gave her age as 14. He refused to be identified for fear of reprisals.
Green is accused of raping the woman and killing her and three relatives - an adult male and female and a girl estimated to be five years old. An official familiar with the investigation said he set fire to the rape victim’s body in an apparent cover-up attempt.
Iraqi authorities identified the rape victim as Abeer Qassim Hamza.
 Masked Shiite gunmen roamed through west Baghdad’s Jihad neighborhood Sunday, dragging Sunnis from their cars, picking them out on the street and killing them in a rampage that police said killed 41 people in a dramatic escalation of sectarian violence. 
Hours later, two car bombs exploded near a Shiite mosque in the city’s north, killing 17 people and wounding 38 in what appeared to be a reprisal attack, police said.
On Monday, two car bombs exploded nearly simultaneously in a Shiite area of Baghdad, killing at least eight and wounding dozens, police and hospital officials said.

TITLE: No End in Sight for Gaza Offensive
PUBLISHER: The Associated Press
TEXT: JERUSALEM — Dispelling reports of a deal with Hamas, Prime Minister Ehud Olmert on Monday said freeing Palestinian prisoners in exchange for a captured Israeli soldier would be a “major mistake” and said there can be no negotiations with the “bloody organization.” 
Shortly after Olmert spoke in Jerusalem, Hamas’ exiled political leader, Khaled Mashaal, said in Damascus that the Israeli soldier Gilad Shalit, would not be freed without a prisoner swap.
The comments by Olmert and Mashaal signaled a deadlock in the crisis over Shalit’s June 25 capture, with no end in sight to the Israeli incursion in Gaza that has killed more than 54 Palestinians since it was launched June 28. There have been reports that Egyptian and Turkish mediators were close to brokering a deal, but the two sides appeared to still be far apart.
Three militants were killed Monday in two Israeli airstrikes, and five people, including an eight-year-old girl, were wounded when an Israeli missile targeted a car the army said was filled with explosives.
Despite the Israeli offensive, militants launched three rockets Sunday into Israel, wounding one person in the Israeli town of Sderot and damaging a house. 
Olmert told reporters that the violence in Gaza would not deter him from his plan to leave the West Bank — despite indications that Israelis’ support for such a withdrawal has been hurt by the violence that followed the Gaza pullout last year, including the current standoff over Shalit.
“I am absolutely determined to carry out the separation from the Palestinians and establish secure borders,” he said. Olmert wants to withdraw from most of the West Bank by 2010 to allow the Palestinians to gain independence and to secure a long-term Jewish majority for Israel.
Olmert defended his army’s offensive, saying Israel had “no choice” but to launch it in order to win Shalit’s freedom and halt a barrage of militant fire into Israel. 
He rebuked European Union accusations that Israel was using disproportionate force, saying Palestinian rockets were terrorizing tens of thousands of residents in southern Israel. 
Continued rocket fire out of Gaza, along with Israel’s recent invasion, has raised questions about whether Olmert can carry out the West Bank pullout. The withdrawal could put major Israeli population centers well within the range of Palestinian rockets.
Olmert said the violence cannot halt a process of separating the Israelis and Palestinians that began with the Gaza withdrawal.

TITLE: East Timor’s New Premier Takes Office
PUBLISHER: Reuters
TEXT: DILI, East Timor — Nobel Peace Prize laureate Jose Ramos-Horta took office as East Timor’s new prime minister on Monday, a move aimed at ending weeks of political crisis in Asia’s newest nation. 	
President Xanana Gusmao swore in Ramos-Horta under the watchful gaze of rifle-carrying Australian commandos heading a 2,500-strong international peacekeeping force in East Timor.
The two men, architects of independence from Indonesian rule, then put their signatures to paper to cement the appointment.
Ramos-Horta, dressed in a dark suit and no tie, took his oath in the president’s office flanked by two new deputy premiers.
During his inauguration speech, made in a hall with unpainted concrete ceilings and bare plywood walls, he promised to channel more funds to the poor and to maintain security.
“The focus has to be on security so that our people, our fathers and mothers and the poor can return to their homes,” said Ramos-Horta, 56, who spent years abroad as a spokesman for East Timor’s struggle for independence from Indonesia.
He told a news conference later on Monday that his cabinet would be sworn in and start work this week.
“We will work very hard,” he said, pledging to cooperate with the World Bank to accelerate development in rural areas. 
East Timor descended into chaos nearly three months ago when then-premier Mari Alkatiri sacked about 600 members of the 1,400-strong army when they protested about discrimination.
Gusmao named Ramos-Horta premier on Saturday, around two weeks after Alkatiri stepped down after being broadly blamed for recent mayhem in the tiny Pacific nation.

TITLE: Conjoined Twin Dies After Separation Surgery
PUBLISHER: The Associated Press
TEXT: SHANGHAI, China — One of the 10-month-old conjoined twins who were separated in an unusually complex surgery last week died Monday, a Shanghai hospital official said. 
Hu Jingxuan’s condition deteriorated over the weekend, and she died Monday afternoon, said an official at Fudan University Children’s Hospital. The official, who works in the hospital’s administration office, refused to give her name, saying she was not officially authorized to speak to media.
Chen Jingni, the stronger of the twins, was in stable condition, the official Xinhua News Agency reported.
Doctors at the hospital had branded Thursday’s separation surgery a “miracle” but had cautioned that the girls, who also suffered from congenital heart disease and other problems, were in precarious conditions.
Doctors said they were forced to operate because the girls had stopped gaining weight.
The babies, who were born to a farm family, shared a liver, spleen, gall bladder and digestive tract before the 13-hour-long surgery.
The twins were born weighing a total of 10 pounds. Before surgery, they weighed 16 pounds, the hospital said. They looked thin and frail in photos provided by the hospital.
The hospital, which has conducted numerous separation operations, began planning the girls’ surgery right after their birth. A business group in Taizhou, the twins’ hometown, raised more than $25,000 to help pay for their treatment, reports said.

TITLE: IN BRIEF
TEXT: Kosovo War Crimes
THE HAGUE (Reuters) — Former Serbian President Milan Milutinovic, a close ally of late Yugoslav president Slobodan Milosevic, went on trial in The Hague on Monday with five others also accused of war crimes in Kosovo in 1999. 
Milutinovic, 63, and his co-accused are charged with the persecution of ethnic Albanians in Kosovo, the forcible deportation of about 800,000 civilians and the murder of hundreds of civilians by Serb forces.

Pakistan Plane Crash
MULTAN, Pakistan (Reuters) — A Pakistan International Airlines (PIA) passenger plane crashed on the outskirts of the central city of Multan on Monday, killing all 45 people on board, the local police chief said. 
“Everyone is dead. I am standing at the site,” police chief Iftikhar Babar told Reuters.
Flight PK 688, en route for Lahore before flying on to Islamabad, crashed three minutes after take-off from Multan airport, said Hasan Jaffery, a PIA spokesman. The Fokker plane was carrying 41 passengers and four crew.

Polish Twin Leaders
WARSAW, Poland (AP) — President Lech Kaczynski appointed his identical twin brother Jaroslaw as the new prime minister, the presidential Web site said. 
Prime Minister Kazimierz Marcinkiewicz and his government formally resigned earlier in the day, paving the way for Jaroslaw Kaczynski to form a new government.

TITLE: Mauresmo Wins Wimbledon
AUTHOR: By Martyn Herman
PUBLISHER: Reuters
TEXT: LONDON — Amelie Mauresmo won an emotional first Wimbledon singles title on Saturday, recovering from a torrid start to beat Justine Henin-Hardenne 2-6 6-3 6-4. 
The world No. 1, who also took this year’s Australian Open when a sick Henin-Hardenne retired, is the first Frenchwoman to win here since Suzanne Lenglen in 1925. 
Mauresmo, three-times a losing semi-finalist here, proved wrong those who said her nerve would fail her, playing some dazzling tennis to win two hours two minutes. 
At the conclusion she sunk to her knees, overcome with joy. 
“It feels great. I had a great two weeks,” Mauresmo said courtside after being presented with the Venus Rosewater Dish. 
“I definitely wanted this win today. I don’t want anyone to talk about my nerves anymore. 
“It’s a great moment for me, this trophy is so special in the world of tennis. I’m very very proud.” 
Defeat denied French Open champion Henin-Hardenne the only grand slam title missing from her collection. 
“She played better than me, she was just too good today,” said the Belgian. “I’m pretty tired but it’s been a couple of good weeks for me.” 
Henin-Hardenne came out firing on all cylinders on a sunlit Center Court to blaze through the first set in just 31 minutes.  The third seed, runner-up here five years ago, seized control when she broke an ill-at-ease Mauresmo in the first game of the match with a flowing volley. 
Triple French Open champion Henin-Hardenne dominated the early rallies from the forecourt, striking the ball cleanly and punching away volleys as Mauresmo was given a baptism of fire in her first Wimbledon singles final. 
The top seed settled her nerves with a delicate drop volley to get off the mark and the 27-year-old had a chance to break back when trailing 3-2 but Henin-Hardenne snuffed out the opportunity with a simple volley. 
Mauresmo continued to look second best and was broken again to fall behind 5-2 and Henin-Hardenne served out a one-sided first set to love with a flashing ace. 
The crowd were willing Mauresmo to shake off the tension that was strangling her natural flair. 
They got their wish when the Frenchwoman earned two break points at 1-0 in the second set with a grass-cutting sliced return and angled volley. 
Henin-Hardenne saved the first with a cute drop shot, but she then hit a forehand long to give Mauresmo a foothold which she strengthened by holding for 3-0. Mauresmo had points for 4-0 and 5-1 leads as Henin-Hardenne’s game went off the boil but the Belgian dug herself out of trouble on both occasions and recovered the break when Mauresmo framed a backhand over the baseline. 
Unruffled, Mauresmo hit straight back with fierce passing shots and moved 5-3 ahead with a dipping forehand after Henin-Hardenne failed to put away a volley. 
A teasing wind caused problems for both players as a nervy Mauresmo saved three break points before serving her fourth ace down the middle to take the second set. 
Mauresmo, often labeled a choker, appeared to be the mentally tougher at the beginning of the decider. 
Henin-Hardenne produced a rash of unforced baseline errors to drop serve at 1-1 and Mauresmo confidently held to love to move 3-1 ahead. 
That could have been 4-1 in the next game, but Henin-Hardenne survived a break point after a superb rally that had both players at full stretch. 
The final was still balanced on a knife edge but Mauresmo maintained her advantage, keeping Henin-Hardenne at arms’s length with some well-placed serving. 
A wild forehand from Henin-Hardenne put Mauresmo just one game away from the title and although she held serve at 3-5 Mauresmo would not buckle. 
She found the corner with a sweet backhand volley at 30-30 to take her to match point. 
The tension was unbearable as Mauresmo looped in a second delivery but on the fifth stroke of the rally Henin-Hardenne thrashed a forehand into the net.

TITLE: Federer Takes Fourth Title, Builds Rivalry With Nadal
PUBLISHER: Reuters
TEXT: LONDON — Roger Federer wrapped up his fourth consecutive Wimbledon title on Sunday, finally subduing Spain’s Rafael Nadal 6-0 7-6 6-7 6-3. 
It looked as though the world No. 1 would run away with an eighth grand slam title after rampaging through the first set in 24 minutes before double French Open champion Nadal recovered to make the Swiss maestro sweat on a breezy Center Court. 
Federer dropped a set for the first time at this year’s tournament as the 20-year-old Nadal refused to surrender, but in the end he had enough grasscourt craft to become only the third man to win four straight titles here in the professional era. 
“It’s fantastic, I never thought it was possible but I made it,” Federer, clad in his cream blazer, said in his acceptance speech after an enthralling two hour 50 minute contest. “It was awfully tight and I was getting awfully nervous in the end.” 
Federer had been on the receiving end against Nadal four times already this year, and he came out mean, moody and looking for revenge after his French Open final defeat last month. 
His opening set demolition was the first 6-0 first set in a Wimbledon men’s final since Boris Becker achieved the feat against Stefan Edberg in 1989. 
Nadal had won 80 consecutive service games at Wimbledon en route to the final, but that sequence ended when Federer crunched a forehand to break serve at the first time of asking. 
For once Nadal, the first Spanish finalist for 40 years, looked overawed as he struggled for rhythm and Federer broke again to lead 4-0. 
Nadal saved a set point with a brilliant lob volley at 0-5 and another with his first ace, but Federer made sure at the third attempt with an exquisite backhand pass. 
Thoughts of a Center Court humiliation for Nadal, the youngest men’s finalist since Becker in 1986, soon disappeared though as he finally exploded into life. 
A pummeled backhand winner gave him a break point at the start of the second set and Federer then miss-hit a forehand wide, prompting a trademark bicep-bulging fist pump and roar of “Vamos!” from Nadal. 
Federer responded by carving out a break point in the fourth game, only to send a backhand over the baseline. Nadal consolidated his two-game lead with an ace. 
Nadal, who lost the first set of the French Open final 6-1, began to dominate the rallies from the baseline and it was Federer’s turn to look anxious as Nadal moved 5-3 ahead. 
Serving for the set at 5-4, however, Nadal served a double fault at 15-30 and then looped a forehand out to gift Federer a way back into the set. 
An angry Nadal regained his composure to take the set into a tiebreak, in which he got the first mini-break. 
Three forehand errors from Nadal gave the momentum back to Federer as the Swiss won five points in a row to move 6-3 ahead. 
The second seed clawed it back to 6-5 but Federer roared with relief when a Nadal forehand nestled in the net. 
Federer served his first double-fault of the match to give Nadal a sniff of a service break at 2-3 in the third set, but salvaged the situation with a well-placed delivery. 
Games went with serve as the match drifted into its second tiebreak which Nadal dominated. 
From 2-2 he cranked up the pressure with some fierce hitting, winning five points in a row and sealing the set when Federer made a hash of a forehand. 
Federer immediately went off court for a toilet break, and no doubt to gather his thoughts. 
The decisive moment came with Nadal facing a break point at 1-2 as the Spaniard leapt to hit a smash but sent it sailing over the baseline. 
Finally Federer had some daylight and it became clear blue sky as he broke again for 5-1. 
Even then, Nadal hit back to break the Swiss when he first served for the match. Federer made no mistake at 5-3, closing out the match to love when he forced Nadal into an error.

TITLE: Russian, Israeli Make History in Mixed Doubles
PUBLISHER: The Associated Press
TEXT: WIMBLEDON, England — Andy Ram of Israel and Russia’s Vera Zvonareva won the Wimbledon mixed doubles title Saturday, beating Venus Williams and Bob Bryan of the United States, 6-3 6-2. 
It was Ram’s first Grand Slam title. Zvonareva won the U.S. Open mixed doubles title with Bob Bryan in 2004. 
The ninth-seeded pair won their semifinal match earlier Saturday, beating No. 3 Wayne and Cara Black of Zimbabwe 6-3 7-6. 
Williams’ loss came a week after she was beaten in the third round of the women’s singles. She was the defending champion. 
Bob Bryan teamed with twin brother Mike to win the men’s doubles title earlier Saturday, completing a career Grand Slam. 
Bob Bryan and Williams nearly didn’t become partners. 
Mike Bryan said Williams sent a text message to his brother before Wimbledon, and that Bob Bryan was originally planning to play with Martina Navratilova “but they weren’t communicating too well.” 
“Martina thought she was playing with Bob,” Mike Bryan said. “Bob thought she [Navratilova] was playing with Leander [Paes]. It kind of all got messed up. ... I don’t think Martina was too happy for a few days.” 
Navratilova and her partner, Mark Knowles of the Bahamas, were beaten in the third round by Ram and Zvonareva.

TITLE: Russian, Israeli Make History in Mixed Doubles
PUBLISHER: The Associated Press
TEXT: WIMBLEDON, England — Andy Ram of Israel and Russia’s Vera Zvonareva won the Wimbledon mixed doubles title Saturday, beating Venus Williams and Bob Bryan of the United States, 6-3 6-2. 
It was Ram’s first Grand Slam title. Zvonareva won the U.S. Open mixed doubles title with Bob Bryan in 2004. 
The ninth-seeded pair won their semifinal match earlier Saturday, beating No. 3 Wayne and Cara Black of Zimbabwe 6-3 7-6. 
Williams’ loss came a week after she was beaten in the third round of the women’s singles. She was the defending champion. 
Bob Bryan teamed with twin brother Mike to win the men’s doubles title earlier Saturday, completing a career Grand Slam. 
Bob Bryan and Williams nearly didn’t become partners. 
Mike Bryan said Williams sent a text message to his brother before Wimbledon, and that Bob Bryan was originally planning to play with Martina Navratilova “but they weren’t communicating too well.” 
“Martina thought she was playing with Bob,” Mike Bryan said. “Bob thought she [Navratilova] was playing with Leander [Paes]. It kind of all got messed up. ... I don’t think Martina was too happy for a few days.” 
Navratilova and her partner, Mark Knowles of the Bahamas, were beaten in the third round by Ram and Zvonareva.

TITLE: Italy Wins World Cup, Beats France on Penalties
AUTHOR: By Mitch Phillips
PUBLISHER: Reuters
TEXT: BERLIN — Italy won the World Cup for the fourth time on Sunday when they beat France 5-3 on penalties after the teams finished level at 1-1 in a dramatic final that saw French captain Zinedine Zidane sent off in extra time. 
After David Trezeguet hit the bar with his spot kick the Italians kept their nerve to end their penalties curse with fullback Fabio Grosso converting the fifth and decisive kick. 
Zidane, who opened the scoring with a penalty after seven minutes, was sent off nine minutes from the end of extra time for a head butt into the chest of Marco Materazzi, who had equalized for Italy with a 19th-minute header. 
It was certainly not the way Zidane would have wanted to end his glorious career as he became only the fourth player to be sent off in a World Cup final. But the Italians did not care. 
Instead, it was Italy captain Fabio Cannavaro, exemplary again in his 100th international, who lifted the trophy to add to the Azzurri’s successes of 1934, 1938 and 1982. 
They have become the second most successful team in World Cup history after Brazil, who have won it five times. 
“I have to say thanks to the players,” said Italy coach Marcello Lippi. “This is the most satisfying moment of my life. 
“The players have unlimited heart, character and personality,” he added. “We are very happy.” 
It had looked good for France early on and for long periods of the game when they looked the more creative side. 
Their penalty came after Florent Malouda drove into the box and was felled by a clumsy challenge from Materazzi. 
Zidane opted to nonchalantly chip his spot kick above the diving Gianluigi Buffon and the ball struck the bar before bouncing down behind the line to put France ahead. 
The linesman signalled a goal and Zidane celebrated the first and only time an opponent had scored against Italy in the tournament. Previously they had conceded just one own goal. 
Zidane, who headed two goals in the 1998 showpiece match, became only the fourth player to score three times in World Cup finals after Brazilian duo Vava and Pele and England’s Geoff Hurst, who got a hat-trick in the 1966 final. 
Italy equalized 12 minutes later when Materazzi atoned for his earlier misdemeanour by rising magnificently above Patrick Vieira to head home an Andrea Pirlo corner from the right. It was the first time both teams had scored in the final in 20 years and Italy went close again in the 36th minute when striker Luca Toni headed against the bar from Pirlo’s cross. 
France started the second half full of running with their lone striker Thierry Henry, who was a frustrated, unused substitute in the 1998 final against Brazil, looking dangerous. 
Fabien Barthez was beaten again in the 62nd minute by a Toni header which was ruled out for offside but France remained the more adventurous amid the tiredness as the error count rose. 
They could not force a way through, though, and the final went into an extra 30 minutes for the fifth time. 
Zidane could have finished the night as a two-goal hero, just as he was eight years ago, when he forced a spectacular save from Buffon after 105 minutes as he met Willy Sagnol’s cross with a stunning header. 
Instead, he ended the match in disgrace when, after an exchange of words with Materazzi, he felled the center back with an angry butt. 
The officials seemed to miss the incident but the Italian players remonstrated loudly and Argentine referee Horacio Elizondo ended Zidane’s career nine minutes prematurely with a straight red card. 
Italy had beaten Germany with two goals at the end of extra time in their semi-final but, despite their man advantage, they were out on their feet and unable to muster any further attacks. 
“We can say that Zidane being sent off was the killing moment of the game,” said France coach Raymond Domenech. 
“Especially in extra time the Italian team were obviously waiting for the penalty shootout.” 
Having lost all three of their previous shootouts, including against France in the 1998 quarterfinals and Brazil in the 1994 final, Italy must have feared the worst. 
This time though they were nerveless with five confidently struck kicks. France, however, were shorn of four probable first-choice penalty-takers through substitutions and the red card. 
Six years ago Trezeguet scored a golden goal winner in the European Championship final that Italy had led until injury time but this time fate was against him. 
Unlike Zidane’s penalty in normal time, Trezeguet’s struck the bar and bounced on the wrong side of the line. 
Grosso, who was the late hero of Italy’s second round win over Australia and the semi-final victory over Germany, applied the final touch to spark wild celebrations. 
Zidane did not reappear to collect his loser’s medal.

TITLE: After Zidane’s Shameful Exit, France Asks ‘Why?’
PUBLISHER: Reuters
TEXT: PARIS — France woke up with the bitter taste of defeat on Monday after its 5-3 loss on penalties to Italy in the World Cup final, but the question on everyone’s lips was: “Why did Zinedine Zidane do it?” 
In his last game for his country, the French captain and midfield genius was sent off for head butting an opponent, an ignominious end to a glorious career and that ensured he missed the penalty shoot-out that decided the game. 
Italy held its nerve to run out 5-3 winners. 
“The blue angel turned into a devil,” the daily newspaper Le Parisien said of France’s favourite footballing icon, making a play on words on the national side’s nickname — “Les Bleus.” 
The paper nevertheless ran a “Thank You” headline on its front page in tribute to the achievement of the unfancied national side that reached its second final in eight years despite being largely written off as too old. 
Liberation’s frontpage saw the result as “Cruel” while the Le Figaro daily lamented the “Broken Dream of Les Bleus.”  But the country’s top sports paper, L’Equipe, roasted Zidane in an editorial by Claude Droussent, who said Zidane’s “stupid” assault on Italy defender Marco Materazzi was hard to forgive. 
“Zinedine, you know, the hardest thing this morning is not to try and understand why Les Bleus, your Bleus, lost the World Cup final last night. But to explain to tens of millions around the world how you could have let yourself go and head butt Marco Materazzi, 10 minutes from the end of extra-time? 
“What should we tell our children and all those for whom you have become an example for ever?” he asked, concluding: “How could that happen to a man like you?” 
The newspaper criticised Zidane for failing to take to the pitch after the game to collect his medal for France’s second place finish and console the team mates he had let down. 
But the players themselves, who have refused to divulge what was said to Zidane by Materazzi, praised the contribution of a player widely regarded as the best of his generation. 
“All I want to say to ‘Zizou’, and I think France should say it and the world of football...is ‘thank you’,” France striker Thierry Henry said using the nickname by which Zidane is known.  
Despite being only only the fourth player to sent off in a World Cup final, Zidane won the FIFA Golden Ball award as the outstanding player of the tournament. The prize was decided by media votes, cast before Zidane was shown the red card.

TITLE: Zenit Flops At Kirov Stadium
AUTHOR: By Martin Burlund
PUBLISHER: Special to The St. Petersburg Times
TEXT: There was more than a hint of anticlimax at Kirov Stadium on Thursday.
FC Zenit St. Petersburg failed to give its historic home a winning sendoff and Dick Advocaat missed the chance to kickstart the club’s season in his first game in charge. 
The 56-year-old stadium, a monument to the Soviet era, is to be demolished to make way for a new one that will conform to standards set by UEFA, European football’s governing body.
Zenit played out a 0-0 draw with fellow Russian Premier League underachiever Dynamo Moscow, a score that didn’t help either club out of its disappointing league position: Zenit remained ninth and Dynamo stayed third from bottom after 10 games.
Dutchman Advocaat joined Zenit last week after guiding South Korea to the World Cup finals, where it finished third in Group G.