SOURCE: The St. Petersburg Times
DATE: Issue #1386 (50), Tuesday, July 1, 2008
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TITLE: New Study Reveals Increased Pollution
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Acetone, mercury, chloroform and high concentrations of copper, iron, aluminum, and lead abound in the waters of the River Neva and other local waterways, according to a new study released by the local branch of the international environmental pressure group Greenpeace.
The levels of aluminium exceeded the norm by a staggering 775 times, and levels of iron by 320 times. Oil levels in the city waterways were 164 times above the norm, the research discovered. 
The samples were processed at the St. Petersburg Center for Water Research and Control, the city’s largest laboratory in the field.
“Every single sample showed abnormal results revealing huge amounts of contamination,” said Dmitry Artamonov, head of the St. Petersburg branch of Greenpeace. 
Environmental activists took water samples from six local rivers, including the Neva, the Okhta, the Okkervil, the Izhora, the Murzinka and the Slavyanka throughout May.
Every day in St. Petersburg, 3 million tons of used water is dumped into the Neva. Two thirds of that amount enters the river completely untreated, Greenpeace warns.
“This poisonous toxic concoction flowing straight into the rivers is a direct result of City Hall’s cynical policy,” Artamonov said. “Instead of encouraging and pushing industrial companies to install filtration systems, the city authorities — along with Vodokanal, St. Petersburg’s water treatment monopoly — are selling them indulgences at a comfortable price.”
Artamonov was referring to the much-criticized system of low fines for companies caught dumping industrial discharge into the Neva and other waterways. 
The activist said he finds it revealing that the authorities either ignore or question the results of independent environmental monitoring carried out by non-governmental organizations or pressure groups such as Greenpeace.
Governor Valentina Matviyenko frequently maintains in her speeches that St. Petersburg is very close to European standards in environmental safety issues.
Most of the waste flows into the Neva through its polluted tributaries. Many industrial enterprises are located on the banks of the Okhta, the Slavyanka and the Izhora and many of the companies dump waste into the water without treating it, ecologists say.
“The companies either dump the waste illegally straight into the water or pay Vodokanal for the right to throw the discharge into one of their collectors,” explains Alexei Kiselyov, head of Greenpeace’s toxic program. 
“Because Vodokanal does not have enough facilities to process all the waste, a large proportion of it flows into the city’s rivers untreated on a perfectly legal basis.”
It is cheaper for the companies to pay fines or strike a deal with Vodokanal than to filter and treat the waste.
“In industrially developed countries the authorities encourage the companies to buy their own water treatment facilities, while the state-run local water treatment plants — like the ones managed by Vodokanal — deal exclusively with sewage,” as opposed to industrial waste, Kiselyov said. 
“Unless St. Petersburg introduces high fines and tight controls over the illegal discharges, the city is going to be overflowing with toxins and totally swamped by pollution.”
Ecologists stress that since 2000, the volume of unauthorized industrial discharge has grown despite the fact that such practices are illegal. According to official statistics, 40 percent of untreated sewage and industrial waste in St. Petersburg is being pumped directly into the Neva and the Finnish Gulf owing to a shortage in waste treatment facilities. The figure does not include numerous illegal discharges, while ecologists say there are hundreds of drains channeling untreated industrial discharge within city limits.
Water pollution was listed among the major contributing factors to St. Petersburg’s 85th place out of the country’s 89 regions in a newly released rating by the Russian Independent Environmental Monitoring Agency. 
The ecologists accused Matviyenko of cynically twisting the issue for political purposes.
“Construction projects get the green light regardless of environmental hazards,” said Rashid Alimov of the international pressure group Bellona. “The interests of big business prevail over the ecology and people’s health.”
For several years, local environmentalists have asked Matviyenko to go with them on one of their water patrols, but they say she has yet to take up the invitation.  
Soon after Vladimir Putin became president in 2000, the Russian government closed the Environment Ministry and transferred its responsibilities to the new Natural Resources Ministry, which is also in charge of exploiting the country’s natural resources.

TITLE: European Union Takes ‘Leap of Faith’ in Medvedev
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: KHANTY-MANSIISK — Russia and the European Union on Friday kicked off long-delayed talks on a new partnership pact after the EU appeared to concede to a key demand by President Dmitry Medvedev.
The EU seems to be taking a “leap of faith” in Medvedev, who was hosting his first EU-Russia summit, a political analyst said. The visiting EU leaders refused to compare Medvedev with his often blunt-speaking predecessor, Vladimir Putin, but they clearly were impressed with Medvedev and spoke warmly of him.
“The first summit with Medvedev was indeed a very good and constructive one,” European Commission President Jose Manuel Barroso told reporters after three hours of talks Friday.
“I really enjoyed this first contact I had with you,” he told Medvedev later at the news conference.
EU foreign policy chief Javier Solana, who was notably absent from last year’s summit near Samara, said: “Today has been a good day.”
But tensions rose between Russia and Estonia at a post-summit conference, threatening to cast a shadow on the summit’s gains and possibly complicating the talks over the partnership agreement. 
The current partnership agreement, signed in 1997, has been described as outdated, and negotiations on developing a new agreement were delayed for 18 months due to opposition by Poland and Lithuania. The current agreement will be in force until a new one is adopted, and both Russian and EU officials say that could take months, if not years.
After Friday’s negotiations, Medvedev exuded confidence as he praised the start of the talks but cautioned that many hurdles lie ahead.
Medvedev began the news conference by stressing that the new partnership treaty will be a “rather short” framework agreement, followed by a series of “sector agreements.”
Going into the summit, Russia had said it wanted a framework agreement to be followed by a series of additional, more detailed agreements, while the EU had said it would prefer a detailed pact spelling out terms of cooperation in the energy sector, among other things. 
Medvedev’s announcement indicated that the EU had agreed to concede. A joint statement released to reporters said the sides agreed to “conclude a strategic agreement that will provide a comprehensive framework” for EU-Russia ties.
EU officials sought to put a positive spin on acquiescence, saying Moscow and Brussels were on the same page. Speaking on the sidelines of the summit, EU Trade Commissioner Peter Mandelson said he did not see a difference between the comprehensive agreement the EU had wanted and the “serious” framework agreement that Medvedev had proposed. Marc Franco, head of the European Commission’s delegation to Russia, said talks on the additional, more detailed agreements could begin simultaneously with those on the main pact. The first round of talks will start July 4.
The summit and the fact that the EU agreed to a framework pact, albeit with a series of additional agreements, is largely a victory for Moscow and also “a leap of faith in Medvedev,” said Alexei Malashenko, an analyst with the Carnegie Moscow Center. 
“Suddenly it turns out we can reach agreements,” he said.
The cordial mood at Friday’s talks stood in striking contrast with last year’s summit, which was hosted by then-President Putin and was suffused with acrimony and mutual accusations.
Medvedev’s more cooperative tone has helped the country’s efforts to reach out significantly, Malashenko said, brushing aside concern by some analysts that the substance of Russia’s policies will not change under Medvedev.
Still, taking a cue from Putin’s rhetoric, Medvedev on Friday criticized U.S. plans to place elements of a missile-defense shield in Central Europe and what he described as Western attempts to rewrite history and glorify fascism. But he lacked the prickly tone and sharp delivery typical of Putin, his mentor who now serves as prime minister.
Putin stayed away from Khanty-Mansiisk, leaving less fodder for speculation that he — and not his protege — is calling the shots in the country. Then-Prime Minister Mikhail Fradkov attended last year’s summit in Volzhsky Utyos, near Samara.
Medvedev said he and EU officials had discussed the possibility of a future summit that could produce a new European security pact — a proposal he first made in Berlin this month.
Existing security blocs — such as NATO, the Organization for Security and Cooperation in Europe and the Collective Security Treaty Organization — are imperfect because they do not account for the interests of all European countries, Medvedev said.
Calling Europe “our common home,” Medvedev said it was unacceptable that a single country was responsible for that home’s security — an apparent reference to the United States. 
Medvedev said countries like the United States and Canada would be welcome to participate in the proposed summit. “I have more optimism after today’s conversation than before it,” Medvedev said.
Foreign Minister Sergei Lavrov later explained that the proposed security summit should not be seen as a tool to weaken NATO but as an opportunity to mend security ties with the West.
“We want NATO to be part of the solution, not part of the problem,” Lavrov said in a conference call with foreign reporters.
Solana said both sides had agreed to abstain from the use of force in the “frozen conflicts” of Georgia’s breakaway regions of Abkhazia and South Ossetia and Moldova’s Transdnestr.
“We talked about Georgia, and we are going to cooperate on Georgia; we talked about Moldova and we’re going to cooperate on Moldova,” he said.
Medvedev also said Russia would press on with its energy projects in Europe, describing plans to build the North Stream natural gas pipeline under the Baltic Sea to Germany as “a unifying, apolitical, commercially feasible project.” 
Barroso said the EU and Russia would be even more interdependent in the future but added that Russia needed to complete its WTO accession to unlock greater potential for economic cooperation.
EU External Relations Commissioner Benita Ferrero-Waldner said the EU had also expressed its concern over the fate of BP’s 50 percent stake in TNK-BP, Reuters reported. 
Asked by a reporter to compare the atmosphere at this summit with last year’s, EU officials declined direct comparisons between Putin and Medvedev.
Medvedev said drawing any “divisive lines” was unnecessary. “I would depersonify this,” he said. “The most important thing is what we do.”
But EU officials spoke warmly of Medvedev at a separate news conference. “He seems to me to be a very open person who really wants to engage, he has a very open personality,” Barroso said, Reuters reported.
Ferrero-Waldner said her first impressions were also positive. “We are now in a phase of retuning our relationship because there are new personalities,” she said. “We do see this — I think sincere — wish to work together in a much closer way. We will have to see if this wish is translated into action.”
As a gift to the foreign guests, Medvedev left autographed books of his amateur photographs in their rooms, The New York Times reported.
Slovenian Prime Minister Janez Jansa, whose country holds the EU’s rotating presidency, chalked up the success of the gathering to the fact that both the EU and Russian presidents spoke Slavic languages.
But a new dispute broke out between Estonia and Russia during a three-day Finno-Ugric conference in Khanty-Mansiisk. Estonian President Toomas Ilves said Saturday that some Finno-Ugric people have yet to embrace democracy and freedom — remarks that prompted a sharp protest from a senior State Duma deputy, Konstantin Kosachyov. Ilves, speaking through a spokesman, expressed surprise at the reaction and said he had been misunderstood. Tensions escalated Sunday when an Estonian delegation led by Ilves walked out of the conference to protest criticism by Kosachyov of Estonia’s ethnic policies.
Barroso said at the summit Friday that all EU member states shared the same dignity toward all people. He also said that when the EU rejected Soviet totalitarianism, the criticism was not aimed against Russia.
Medvedev said at the summit that victory over fascism was Europe’s “common asset.”

Staff Writers Nikolaus von Twickel and Miriam Elder contributed to this report from Moscow.

TITLE: Farce Hits Tower Hearing
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: A legally required public hearing into the planned 396-meter tall Okhta Center building, otherwise known as the Gazprom Tower, held by the district administration and the company in charge of the project descended into farce on Friday as public ire over the new building reached new heights.
The hearing featured hundreds of supporters who were reportedly hired to voice approval for the project, as well as an hour-long protest, demands to cancel the hearing as “illegitimate,” and the arrival of OMON special forces police. A handful of arrests were made.
However, the organizers declared the hearing’s aims as having been “accomplished.”
At around 3 p.m. on Friday, as people filled the conference room at the Burevestnik Center near the site of the planned tower, it became evident that many who were there to express support for it were acting in teams on the command of several supervisors. 
But as Krasnogvardeisky District officials and representatives of Gazprom’s Okhta Public Business Center, the company behind the project, took their seats to open the hearing, the stage was taken by dozens of members of the democratic party Yabloko, the banned National Bolshevik Party (NBP) and preservationists from the pressure groups Living City and Okhtinskaya Duga, as well as activists from the Movement of Civil Initiatives (DGI) group.
Local Yabloko leader Maxim Reznik, speaking into a megaphone because he was denied the use of a microphone by the organizers, demanded that unless the room was cleared of “provocateurs” the hearing should be canceled as illegitimate. He said he had video evidence that many in the audience had been hired to support the tower and demanded that the video be played on a screen set up for the hearing. The organizers refused.
Protests continued for over an hour, with activists giving the megaphone to each other. Many chanted “Provocateurs — Get Out of the Room,” “This Hearing Is a Farce” and “Forty Eight” — a reference to the local law that forbids buildings taller than 48 meters high from being built in St. Petersburg’s historic central districts.
The skyscraper’s opponents, who include preservationist pressure groups, oppositional political parties and the United Nations cultural body UNESCO, say the Kremlin-backed tower will destroy the city’s historic skyline, while residents of the area are also cautious about a number of problems that the construction threatens to cause.
The proposed tower is one of the issues on the agenda of the UNESCO World Heritage Committee’s 32nd session next month.
Intended to house executive offices of the state energy giant Gazprom, the tower would be one of the top-ten tallest buildings in the world. The proposed Okhta Center also includes residential and commercial property and public facilities to be built in the rundown Okhta area to the east of the city center.
The tower’s supporters, whom activists said were mostly professional extras recruited from the Lenfilm movie studio — some faces were familiar from crowd scenes in Lenfilm productions — either overacted by booing and shouting at opponents or just sat looking bored. It is estimated this group made up at least half of the estimated 500 to 600 people present at the hearing.
Many young people among the tower supporters identified themselves as members of a previously unheard-of movement called Novy Peterburg (New Petersburg) by wearing large white buttons with the movement’s name and web address on them. 
The website was launched on Thursday, a day before the hearing, and is hosted by a Moscow company.
After an hour-long delay Okhta Center’s Pyotr Luchin read from a document without being heard, because Reznik was speaking into the megaphone. Then 16 OMON policemen entered the room and cleared the stage by pushing and kicking activists as tower supporters cheered and laughed. The opponents chanted “Shame.”
Eight activists were arrested and charged with petty hooliganism and swearing in public. They were released after appearing in court later that day.
“First they had a paid-for audience, a rent-a-crowd — and we had to attract attention to this,” said Reznik, whose party organized the March for the Preservation of St. Petersburg in September and which has taken part in many other protests against the tower. He spoke to The St. Petersburg Times by phone on Monday.
“We had the information and the video. We demanded that it be shown on screen before the hearing began. Apart from that, various documents had been changed and switched during the exhibition [held at the district administration offices before the hearing]. We said that the hearing itself had been organized with violations of the law, even without the presence of the rent-a-crowd. 
“Having a rent-a-crowd shows utter contempt for everything. Especially after Comrade [Governor Valentina] Matviyenko’s statement about how she will struggle, it turns out, to defend St. Petersburg’s historic center, its heritage. The hearing looked so cynical after all this that we couldn’t help but draw attention to it.”
Okhta Center’s Luchin, who was the main speaker at the hearing, repeatedly addressed the hired supporters, asking them “Support me,” and, after young supporters gave a pro-tower speech, he exclaimed at least twice, “Let’s support youth.”
Moi Rayon newspaper has posted a video testimony on its web site by Lydia Bezzubova, a local resident who was hired as a paid participant, but after finding out what the hearing was about, refused to take part and called journalists.
Lenfilm denied it had anything to do with the alleged hiring of the tower supporters for the hearing. 
“It stems from ignorance about the process,” press officer Olga Agrafenina said by phone on Monday.
“Lenfilm doesn’t have a department dealing with extras, therefore it must have been arranged by outside casting companies. There’s a great many of them in St. Petersburg now because filmmaking is on the rise and casting agents are needed by everybody, both films and TV series. They might go by the name ‘Lenfilm,’ but this is for outsiders because they know that there is such a film studio. If it were in Moscow, such a casting agency could easily  call itself Mosfilm.”
The hired supporters were paid 400 rubles ($17) each, according to tapes made by opponents who disguised themselves as volunteers to be hired for the hearing. 
Some of the paid-for supporters were seen and photographed queuing near the Burevestnik business center after the hearing to collect their money, but were reportedly told to go to the Lenfilm offices the following day when agents noticed the line was being filmed by a television crew.
“We will demand the cancellation of [the hearing’s results],” said Reznik.
On Monday, Nikolai Rybakov, a member of Yabloko’s Federal Bureau and the head of Grazhdanka municipality’s administration, wrote letters to Russian President Dmitry Medvedev and General Prosecutor Yury Chaika in which he said the hearing had been “deliberately fabricated” and asked for an investigation and a new public hearing, prepared and held in accordance with the law.
“It is seen from all the materials that [the hearing’s] organizers (Krasnogvardeisky District administration and the Okhta Public Business Center) knew about the falsification being prepared and actually guided it throughout the event,” he wrote.

TITLE: Abkhazia Blames Georgia For Series of Explosions
PUBLISHER: Reuters
TEXT: SUKHUMI, Georgia — Georgia’s breakaway Abkhazia region said on Monday it was sealing itself off from Georgian-controlled territory after a series of explosions that it blamed on Tbilisi.
An official in the Georgian government denied any involvement in the explosions — the latest of which injured a Russian holidaymaker on Monday — and said Abkhazia’s allegations were “politically motivated”.
Abkhazia, a region on the Black Sea coast, has been the scene of mounting tensions between Tbilisi’s Western-leaning government, which wants to restore its control, and the Moscow-backed separatists.
Russia’s Interfax news agency quoted separatist leader Sergei Bagapsh as saying the attacks were “terrorism pure and simple” and were the work of Georgian special forces.
“From Tuesday, the border with Georgia will be shut, and any movement across the Inguri river will be halted,” Interfax quoted him as saying. The river separates southern Abkhazia from Georgian-controlled territory.
Six people, including the Russian holiday-maker, were lightly wounded on Monday after two bombs went off at a minibus stop in the separatist capital Sukhumi.
A local reporter told Reuters she saw a mangled rubbish bin and piles of broken glass at the scene.
Another six people — all women — were wounded in two blasts at a market in the nearby resort of Gagra on Sunday. One woman suffered an eye injury. Last Friday, a bomb exploded near a local United Nations mission, causing no injuries or damage.
“Taking into account yesterday’s explosions, and as our President Sergei Bagapsh has said, these are acts of terror aimed at rocking stability and disrupting the tourist season,” Sukhumi Mayor Alias Labakhua told Reuters.
“It’s definitely Georgia which is behind all this — they see our republic developing, strengthening ties with Russia.”
Georgia rejected the charges. “We consider these accusations by the Abkhaz side to be purely politically motivated,” said Shota Utiashvili, a senior official in the Georgian Interior Ministry.
In the past, Georgian officials have blamed attacks and blasts inside Abkhazia on local organised crime groups.
A popular Soviet-era resort, Abkhazia threw off Tbilisi’s rule in a 1990s separatist war. It is not recognised by any state, but runs its own affairs.
Russia provides financial aid and has peacekeepers in the region, which it says are preventing further bloodshed. Georgia, an aspiring NATO member, accuses Moscow of trying to annexe Abkhazia.
Tensions escalated this year after Moscow established semi-official ties with Abkhazia and sent in extra troops. In one incident, the United Nations said a Russian jet shot down an unmanned Georgian spy plane, though Russia denied involvement.
Some observers say that if no solution is found, the conflict could jeopardise the 2014 Winter Olympics which Russia is hosting just a few kilometres from Abkhazia’s border.

TITLE: Estonian Leader’s Freedom Call Creates Controversy
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: KHANTY-MANSIISK — The Kremlin left the Estonian president off the guest list for a Finno-Ugric conference last year. It might wish that it had snubbed him again this weekend.
Estonian President Toomas Ilves rankled Russian officials on Saturday when he told a three-day conference in Khanty-Mansiisk that some Finno-Ugric people have embraced democracy but that others have yet to taste freedom.
At a hastily called briefing for Russian reporters, a State Duma deputy accused Ilves of trying to foment unrest and promote his own political agenda. When the deputy criticized Estonia at the conference Sunday, Ilves’ delegation walked out, smiling and waving.
Ilves also held rare talks with President Dmitry Medvedev.
Ties with Estonia, which have been strained since the Soviet collapse, sank to a new low last year when Estonia moved a World War II memorial to Soviet soldiers from central Tallinn to a military cemetery, sparking rioting there and harsh condemnations from Moscow.
The Kremlin did not invite Estonia’s leader to the last Finno-Ugric gathering, held shortly after the memorial dispute, but it did welcome the leaders of Finland and Hungary, the other two main Finno-Ugric countries.
Ilves was not invited because the event last year was not an official conference but a festival for Russia’s friends, Kremlin aide Sergei Prikhodko told reporters Friday. “We have nothing to be ashamed of,” he said. 
The conference is aimed at celebrating the culture and identity of the Finno-Ugric people. It opened Saturday in the same hall where Medvedev and EU leaders announced the start of the talks on a new partnership agreement a day earlier.
Medvedev, who spoke first at the conference, said the gathering represented “evidence of a sincere and deep desire to develop our cooperation.”
Ilves, who spoke last and wore a long black coat and is the only head of state to don traditional dress, spoke about how democracy would benefit the Finno-Ugric people.
“Many Finno-Ugric people have yet to make this choice,” Ilves said. “Once you have tasted freedom, you will realize how much of it is sacrificed in the name of surviving or just getting by.”
Ilves appeared to speak on behalf of not only Estonia but also Finland and Hungary, saying all three countries had chosen European values, and he called for the removal of “emotional or artificial barriers” between the nations.
Ilves finished by saying: “As a start, freedom and democracy, and by extension Europe, are not at all bad basic values. And, to be honest, there’s really no alternative.”
As soon as the conference’s opening session ended, the authorities called a briefing at which State Duma Deputy Konstantin Kosachyov denounced Ilves’ remarks as being laced with “geopolitics” and unworthy of a head of state. 
“Instead of speaking of the issues of the [Finno-Ugric] people, which are of interest to the common folk, he spoke about issues that are of interest to the Estonian state,” said Kosachyov, head of the Duma’s International Affairs Committee.
He accused Ilves of trying to foment unrest by calling Russia’s Finno-Ugric population to choose “the happy path” of Estonia. 
More than 2 million Finno-Ugric people, including the Khanty, Mansi and Setu, live in Russia.

TITLE: Fans’ Enthusiasm Remains Strong Despite Loss
AUTHOR: By Max Delany
PUBLISHER: Staff Writer
TEXT: MOSCOW — “Only Russia and only victory,” a drink-sodden football fan sang without irony as he rode the metro home alone at 1 a.m. Friday.
“Ole, ole, ole, ole! Russia is champion!” he chanted hoarsely, unintentionally echoing the jubilation that must have been spreading from Madrid to Mallorca at that very moment.
Instead of the 3 million revelers expected to flood onto city streets had Russia won, city police said 50,000 ardent fans stayed out to celebrate their team’s improbable run in the tournament, which ended with a 3-0 semifinal loss to Spain early Friday.
By reaching the semifinals and playing some spectacular football along the way, the national team far exceeded expectations and notched Russia’s best result ever at a major tournament. Along with the other losing semifinalist, Turkey, the team receives bronze medals for its effort.
After a stunning quarterfinal victory over the Netherlands, hope had turned to hype and expectation ahead of Thursday night’s game in Vienna. 
Thousands of fans packed into bars around the city to cheer on the team led by Dutch coach Guus Hiddink and playmaker Andrei Arshavin. 
Ahead of the game, old women sold flags for 200 rubles instead of the usual fruit and flowers along Tverskaya Ulitsa. In an underpass near Red Square, a line stretched out from a kiosk selling patriotic memorabilia. 
In a bid to avoid disturbances, the city center was turned into a dry zone as shops stopped selling alcohol between 8 p.m. and 6 a.m., forcing beer hunters to head out of the center and alcoholics to beg vendors in vain. Cars were towed away without warning from central streets.
More than 4,000 police officers were deployed to patrol the streets, but despite the beefed-up security measures, isolated scuffles broke out around the city. 
A law enforcement source told Interfax that a brawl involving 500 young people erupted in the South Butovo district on the city’s southern outskirts and that several kiosks were attacked and beer looted early Friday. City police spokesman Viktor Biryukov later denied that there was a brawl.
About 220 people were detained for offenses ranging from public drunkenness to being too loud, the source told Interfax.
Russia’s team was welcomed back to Moscow on Friday with a rock concert at Luzhniki stadium. Several hundred fans waved flags and danced to music as the team stood on a stage outside the stadium.
“At the start of the tournament we said if we got to the quarterfinal it would be a success, but we got to the semifinals,” Hiddink said earlier at the airport, Vesti television reported.
At the UN headquarters in New York, Russian officials had a Security Council meeting on the Middle East postponed because it clashed with the match, Reuters reported.
In the Belarussian capital, Minsk, special police units had to be called in to protect about 50 local youths wearing red and gold — the colors of the Spanish flag, Interfax reported.
In Yekaterinburg, the director of a local concert hall where Spanish crooner Julio Iglesias was to perform told Interfax that the concert organizers would ensure his safety with a large retinue of security guards.
President Dmitry Medvedev will meet with the Russian national team in the near future, a Kremlin spokeswoman told RIA-Novosti. 
While most Russian fans conceded that their team had simply been outplayed by a superior opponent, some saw sinister explanations for the loss.
Flamboyant politician Vladimir Zhirinovsky said Russia may have fallen victim to a conspiracy involving mind-control technology developed by the Germans during World War II and the influence of high-ranking Spaniards in Europe’s ruling organizations.
“The team has never played that badly,” Zhirinovsky said, Regnum.ru reported. “It played better against the Swedes and against the Dutch, and all of a sudden they couldn’t do anything.”
n Authorities in Tolyatti have arrested a man suspected of murdering his neighbor for cheering for the Netherlands in the team’s 3-1 loss to Russia in last week’s Euro 2008 quarterfinal, Interfax reported Friday.
The suspect went to his neighbor’s apartment and stabbed him with a knife on June 21, local Investigative Committee official Nikolai Chernyakov said.
He then got his brother to help him dump the body in the stairwell of their apartment building, Chernyakov said.
“Before the game they were drinking and discussing the team’s chances,” Chernyakov told Interfax. “The victim said that the Dutch would win. His neighbor did not like that.”

TITLE: Hotel Unveils Lobby
PUBLISHER: The St. Petersburg Times
TEXT: The first stage of one of the largest investment projects in St. Petersburg’s hotel industry was due for completion Tuesday with the reopening of the main entrance on Nevsky Prospekt of the Corinthia Nevskij Palace Hotel.  
The main entrance of the five-star hotel has been closed for reconstruction since December last year, during which time a temporary lobby off Stremyannaya Ulitsa was in use.
“We wanted to build a new and luxurious living room for the city,” said Gerold Held, general manager of the Nevskij Palace. 
As a result of the reconstruction work, the lobby has become bigger and lighter, and is now more than twice its original size in both floor area and height, according to the hotel manager.
“New technologies mean new possibilities to impress guests.  There is an overall trend for higher ceilings, light, space and luxury, in harmony with the city itself.  We wanted to build a lobby that was more grand, in keeping with the city.  Features reminiscent of St. Petersburg’s palaces can now be found in the Nevskij Palace, too,” he said.
The hotel, which first opened its doors in 1993, is owned by the Malta-based International Hotel Investments (IHI) company, whose hotels are operated by Corinthia Hotels International.  
The investment project also includes the extension of the hotel and development of three neighboring buildings, as well as the refurbishment of all public areas, and is expected to amount to a total of about $142 million.
The second stage of the project includes extending the hotel into the adjoining building, 59 Nevsky Prospekt, where an additional 105 rooms will be available, along with a conference center with a capacity of more than 1,000 people.
On the other side of the original hotel, at 55 Nevsky Prospekt, an elite commercial center, Nevskij Plaza, will be developed as part of the investment project.  The first two floors of the center will be devoted to upscale retail outlets, while the other six floors will house premium office space for rent.
The project is scheduled for completion at the beginning of 2009.
Five star hotels continue to be built in the city, with the recent opening of the Sokos Hotel Olympic Garden.  The total investment into the construction of the Finnish hotel group’s latest project amounted to $54 million.
The latest addition to the city’s hotel industry aims to attract business travelers as well as tourists. 
“The number of business trips and meetings taking place in St. Petersburg has grown significantly during the past five years,” said Jukka Raisanen, general manager of the Sokos Hotel Olympic Garden. “Our hotel is attractive to tourists, but we also have much to offer business travelers.”

TITLE: Yacht Tourism Connects Russian Capitals
AUTHOR: By Yevgeny Rozhkov
PUBLISHER: Special to The St. Petersburg Times
TEXT: The first river yacht route, Dvortsovy Kruiz (Palace Cruise), opened Saturday, connecting Moscow and St. Petersburg on a trial basis through July 12 as part of the Annual Yacht Festival. If there is enough demand, it will make the coast even clearer for the cruise business in Russia’s northwest, and river yachts will run regularly, says Sergei Akulenko, CEO of Marinacomplex, the local company responsible for berthing, fuel and food supply.   
About 10 yacht owners have taken an interest in the 1,350-kilometer Palace Cruise along the Volga-Baltic waterway, into which Marinacomplex has invested 50,000 euros. Alexander Kamelin, the Chief Officer of Sea and River Vessels Inspection in St. Petersburg, says not all vessels can qualify to operate the route. “There are 780 registered small vessels, and only 40 are sailing yachts.” 
Andrei Berezkin, the vice-president of the St. Petersburg passenger vessel owners association, thinks the route has a future if some transportation and legal issues are solved. “About 150,000 tourists travel by boat between Moscow and St. Petersburg every year. But the lack of fuelling quays may be a major problem for yachtsmen.” 
The construction of fuelling quays for river vessels is unprofitable, with summer being the main season for sailing, Berezkin said. There are also limitations on foreign cruise boats, which are currently prohibited by law from navigating Russian waters.
This may change soon, as according to the Partnership Agreement signed during the Russia-EU summit in Lisbon, Portugal in October 2006, Russia confirmed its intention to allow foreign ships to sail in domestic waters, making river yacht tourism another promising alternative to sea cruise tourism, which has been rapidly developing around the globe for a decade, doubling passenger numbers from six million in 1995 to 14 million in 2004, and a predicted 17 million in 2010.
The cruise business boom in St. Petersburg took off in 2000. According to the northwestern branch of the Russian Tourism Business Union, the city dominates in the Baltic area, welcoming 16 percent of all cruise ship tourists in the Baltic area, leaving behind internationally renowned sea ports such as Tallinn (15 percent), Copenhagen (13 percent), Stockholm and Helsinki (12 percent each). In this way, Russia could make up for losses incurred by the cancellation of regular ferry routes from Estonia and Finland in 2005 and still see an increasing number of visitors. 
The new Morskoi Fasad (Maritime Facade) sea terminal will also facilitate the process. Started in 2006, the terminal is due to open its two berths in September 2008 and when completed by 2012 it will receive about 12,000 passengers a day from a third of all ships —  both cruise liners and ferries up to 311 meters in size —  docking in St. Petersburg. 
Princess Cruises, one of the premier cruise lines in the world, has doubled its routes to St. Petersburg and, according to Susanne Ferral, the company’s PR manager, the company expects the number of tourists to leap by tens of thousands in the future. The Star Princess berthed in the city twelve times in 2007, carrying 2,600 passengers each time. This summer the Crown Princess with 3,070 passengers and the Royal Princess with 710 passengers will operate the route, bringing a total of 42,500 visitors to St. Petersburg.

TITLE: VTB, Sberbank Shareholders Disappointed With Dividends
AUTHOR: By Yevgeny Rozhkov
PUBLISHER: Special to The St. Petersburg Times
TEXT: Bitter disappointment about the amount of profit and concern about the future pricing of shares were expressed among minority shareholders of Russia’s largest state-owned banks, VTB and Sberbank, which held their annual meetings in late June and had to account for the distribution of funds raised through initial public offerings (IPOs), one of the most risky investments, according to analysts. 
Distributing profit from 2007 was the main issue on the agenda and the most discussed topic at the annual meeting of Russia’s Bank VTB shareholders that took place Thursday in St. Petersburg. Nine hundred people gathered to learn that the bank would distribute half of its net income —  nine billion rubles (about $383 million) —  as dividends.    
According to International Financial Reporting Standards, in late 2007 Bank VTB, formerly known as Vneshtorgbank, one of the leading universal banks of Russia and the largest in terms of authorized capital, reported a 77 percent increase in assets to $92.6 billion, up from $52 billion in April 2007. 
“In 2007 the bank saw an increase in its net income of 28 percent,” said VTB’s president, Andrei Kostin. The bank launched an IPO in the same year.
IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be used by large privately-owned companies looking to become publicly traded.
The United States and China lead the way in the amounts of capital raised through IPOs.  Industrial and Commercial Bank of China (ICBC) in the run-up to its planned IPO on April 28, 2006 received an injection of $3.7 billion from three “strategic investors” —  Goldman Sachs, Dresdner Bank and American Express —  to reach a total of about $22 billion from investors, which is regarded as the world’s record IPO. 
In 1997, the telecommunication service provider and joint-stock company Vimpelcom floated its shares on the New York Stock Exchange under its Beeline trademark, paving the way for Russian companies seeking investments through IPOs. 
The boom in public offerings has been underway in the country since 2004. National and international markets have obtained shares in numerous Russian companies, including Kalina perfume and makeup producer, Irkut airplane builder, Sedmoi Kontinent chainstore retailer and Lebedyansky food and juice maker, as well as the state-owned oil company Rosneft, which held one of the largest IPOs in financial history after placing nearly 15 percent of its shares on the Russian Trading System and London Stock Exchange (LSE). The offering raised $10.7 billion. Shares were priced at $7.55, near the upper end of the range forecast when the IPO was announced, resulting in Rosneft being valued at $79.8 billion. 
The company achieved its objective largely by arranging bilateral deals with strategic investors, such as BP, Petronas and CNPC, which bought almost $2.6 billion worth of shares during the IPO. In addition, three Russian oligarchs invested over $1 billion each on the LSE —  Roman Abramovich, Vladimir Lisin and Oleg Deripaska. Critics of the deal included the financier George Soros, who called on investors to boycott it on ethical grounds. 
The British Financial Services Authority authorized the flotation of Rosneft shares despite an appeal from Yukos, which claimed that allowing the Rosneft IPO would be tantamount to facilitating the sale of stolen goods. Rosneft bought Yukos’ key production assets after the latter was declared bankrupt following the arrest of owner Mikhail Khodorkovsky.
Bank VTB launched an IPO in April 2007. The bank issued $1.53 trillion of common shares and sold them to 131 thousand individual shareholders from abroad (65 percent) and from Russia (35 percent) to raise $8.8 billion in investments. In the meantime the initial cost of 13.6 kopeks (0.0055 U.S.cents) per share fell by 40 percent to 0.0034 U.S. cents per share, according to Moscow Interbank Currency Exchange rates.
This fall in pricing demonstrated the risks of IPOs as an investment and was something of a cold shower for the minority investors who expected to see hefty profits.  
According to VTB shareholder Zoya Pisaryova, the 500,000 rubles ($21,300) she invested will bring her 4,700 rubles ($200) profit, whereas independent members of VTB’s Supervisory Board are each granted an annual revenue of $150,000. “How about distributing their combined $300,000 among the shareholders?” she suggested at the meeting Thursday, and the audience exploded with loud cheers. 
Kostin blamed the turmoil in the financial markets and referred to other international banks such as Citi, Morgan Stanley and Deutsche Bank, which ended 2007 with a 50 percent to 60 percent decline in share pricing. Along with financial quotations, VTB’s president also quoted the head of the Russian Orthodox Church, Patriarch Alexiy II, saying, “A crisis is the time to make use of opportunities” to explain why the bank continued to float shares on the markets despite their decline in value. 
Aware that most of the shareholders arrived to find out what the quotations would look like in the future, VTB President Kostin warned that “those who came to look for a scapegoat came here in vain. We are investors and co-investors in this room and we are all supposed to take risks together.”
Another shareholder, Nikolai Georgievsky, demanded a payback of shares “The fall in price is explained by the incompetence of the bank’s key managers,” he said.
Responding to criticism, financial director Nikolai Tsekhomsky noted that VTB’s dividends are the largest compared to the amounts distributed by other Russian companies. “VTB will pay 50.12 percent of its net income to its shareholders. Compare this to 31 percent paid by Norilsk Nickel, 22 percent by Vimpelcom, 16.7 percent by Gazprom, 12.9 percent by LUKoil, 10.5 by Sberbank, and 4.1 percent by Rosneft,” said Tsekhomsky. 
In early June, Rosneft’s CEOs faced the same complaints and accusations from their 140,00 shareholders, following an impressive IPO in 2006. Igor Sechin, head of the Board of Directors, agreed that the minority shareholders should “take a more active part in the company’s life and have representatives on the board of consultants.” After some heated discussions, VTB arrived at a similar solution. Kostin told shareholders, “In a year there will be a representative on the board, but to do so we have to follow the rules and consolidate the necessary 2 percent of shares to put a candidate on the list.” 
At a Sberbank shareholders meeting Friday, the mood was similar.  The shareholders voted for a new charter significantly increasing CEO German Gref’s authority in running and representing the bank, including the ability to sign contracts in Russia and abroad without receiving power of attorney, authority that Sberbank said would “enable the bank to make operational decisions in times of world financial crisis.” 
Sberbank has blamed the 25 percent fall in its share value since last year, and the subsequent move by some minority shareholders to sell off part of their stakes, on the global financial crisis, but some shareholders still believe that mismanagement has been a key factor.

Staff writer Nadia Popova contributed to this report.

TITLE: Stocks Fall, Spark New Oil Record
PUBLISHER: Combined Reports
TEXT: MOSCOW — Oil hit another record of just under $143 as global stocks tumbled last week, with the Dow briefly dipping into bear market territory as investors sought safety in gold, government debt and the Swiss franc. 
With one trading session left in June, U.S. stocks were headed to their worst month since September 2001, which marked the end of the last bear market — typically defined as a 20 percent drop from a bull market’s peak. 
Crude surged to a new high of $142.99 per barrel Friday before paring some gains. Tumbling equity markets helped trigger a wider rally in commodities as investors took cash out of stocks and shifted to other assets that take advantage of inflation. 
Oil has gained 47 percent this year, headed for the biggest six-month gain since 1999, as recession concerns have pushed the MSCI World Index of global equity markets down 12 percent. 
“Certainly, there is a ferocious sort of bull market going on in energy and energy-related stocks,” Michael Hartnett, chief equity strategist for emerging markets at Merrill Lynch, said Friday in Moscow. “Across emerging markets, we’re still overweight in those sectors that are sensitive to commodity prices going up,” he said. “At some point there will be a big, big buying opportunity, but probably you need to see inflation abate somewhat first.” 
Hartnett said he was “bullish” on Russian stocks, even as inflation threatens to slow a decade of economic growth. 
“It’s practically the only threat,” he said. “I remain very positive, very bullish on the Russian stock market.” 
Inflation in Russia hit an annual 15.1 percent in May, the highest level in more than five years, amid record fuel prices. Russia and Brazil are commodity-driven economies and are likely to outperform the other so-called BRIC countries, India and China, “in the immediate future,” Hartnett said. The trend will reverse “at some stage in the second half,” he said. 
Despite the soaring oil prices, the country’s top crude producers ended the week down. Rosneft, the Russia’s largest oil producer, dropped 1.6 percent on the MICEX exchange, and top private producer LUKoil shed 4.6 percent. Gazprom Neft fell 2 percent. 
Gold rose to a one-month high, lifted by oil’s fresh spike and a drop in the dollar against the euro. The safe-haven Swiss franc rose to a three-week peak against the dollar after Central Bank first deputy chairman Alexei Ulyukayev said Friday that Russia planned to increase the currency’s share in its $558.7 billion gold and foreign exchange reserves. 
Rising gold prices also did little to help the country’s producers from the overall downturn. Polyus, the country’s top gold producer, fell 5.3 percent on the week, although it made back some of what it lost Thursday after electing a new board. Gold and silver producer Polymetal also made gains on the good news Thursday, rising 1 percent, although it ended the week down 4.1 percent. 
Russia’s markets both fell on the week, with the MICEX Index losing 3.5 percent to close at 1765.91 points and the dollar-denominated RTS Index dropping 2.8 percent to 2318.61 points. 

(Reuters, Bloomberg, SPT)

TITLE: Lavrov Firm On Demands
AUTHOR: By Nikolaus von Twickel
PUBLISHER: Staff Writer
TEXT: MOSCOW —  Foreign Minister Sergei Lavrov on Friday said Russia would make few compromises with the European Union in a wood tariffs dispute seen as the final hurdle in the country’s bid to join the World Trade Organization. 
Lavrov also accused Ukraine of bowing to Western tariff demands to win WTO membership earlier this year. 
Kiev accepted “practically all the demands of the European Union and the United States, lowering tariffs and in most cases making those tariffs of a zero character,” Lavrov said in a conference call with foreign reporters after the EU-Russia summit in Khanty-Mansiisk. 
This created new trade problems between Moscow and Kiev, he said, because goods that are subject to tariffs in Russia now enter the Ukrainian market for free. “But Ukraine wanted this —  I believe for political if not ideological purposes —  and this was their choice,” Lavrov said. 
He contrasted this with the “negotiated solution” sought by Moscow from the EU on wood tariffs.

TITLE: Finland Fails to Progress in Timber Feud
AUTHOR: By Oleg Shchedrov
PUBLISHER: Reuters
TEXT: KHANTY-MANSIISK — Finnish President Tarja Halonen failed to win concessions from Russia in a timber-tariffs dispute at her first meeting with President Dmitry Medvedev, a senior Kremlin official said. 
Halonen and Medvedev met Saturday on the fringes of a summit of Finno-Ugric nations, two days after Finland threatened action against Russia in a long-running dispute over timber tariffs. Hungary and Estonia are also at the summit. 
“The president of Finland actively raised the issue of raw timber supplies [from Russia to Finland],” said Sergei Prikhodko, Medvedev’s foreign policy adviser. 
“President Medvedev provided all necessary explanations in line with Russia’s policy aimed at developing timber processing in the territory of the Russian Federation,” Prikhodko said. 
Finland, which is as large a trading partner with Russia as the United States, said last week that it was considering countermeasures in a dispute over higher export tariffs imposed by Russia to kick-start its wood processing industry. 
Finland said it might impose a tariff on goods transported across Finland to Russia to raise cash to compensate its paper makers. Russia said such a measure could contradict international trade laws. 
Prikhodko said Finland’s countermeasures were not discussed at the meeting. 
Finland has said it will lose up to 16,000 jobs because of the duties. Finland’s economy suffered from both the collapse of the Soviet Union and Russia’s 1998 financial crisis. 
“Our countries cooperate broadly, and this cooperation is linked with certain challenges,” Halonen told Medvedev. “I do not want to describe them as problems.” 
A Kremlin source said “the atmosphere of the meeting was normal first of all because the Finnish side perfectly understands the importance of good relations with Russia and a need to maintain them.” 
Halonen greeted Medvedev in Russian to show goodwill. 
Medvedev said: “Our trade steadily grows, and the current figure of 15 billion euros [$23.61 billion] is an impressive figure. ... We will talk about tasks for the future and also about problems which sometimes emerge,” he said. 
The meeting followed a Russia-EU summit in Khanty-Mansiisk on Friday at which Medvedev criticized the desire of “some EU members to use the European Union as an instrument of solving their national problems.” 
EU Trade Commissioner Peter Mandelson threw the EU’s support behind Finland at the summit, telling reporters the “draconian hike” on timber export duties was having a “crippling effect on Finnish industry” and that taxing Russian goods transiting its territory would be a way of compensating the cost. 
Halonen invited Medvedev to visit Finland, which Medvedev accepted. 
“Finland now hosts a hard rock festival which could be of interest to you,” she told Medvedev, who is a fan of British rock band Deep Purple. “Shall we go right now?” Medvedev joked.

TITLE: Gazprom Outlines Globalization Plan
AUTHOR: By Lucian Kim and Greg Walters
PUBLISHER: Bloomberg
TEXT: MOSCOW —  Gazprom, the world’s biggest natural gas producer, is considering buying oil and power assets abroad as it seeks to become a global energy company.
Gazprom, which bought Sibneft from billionaire Roman Abramovich in 2005, may also expand its oil interests domestically, Chief Executive Officer Alexei Miller told shareholders at their annual meeting in Moscow on Friday.
Russia, the world’s second-biggest gas consumer after the U.S., is gradually raising domestic prices with a goal of making gas sales inside Russia as profitable as exports to Europe by 2011. Gazprom, which has a monopoly over Russian gas exports, plans to invest 70 billion rubles ($3 billion) a year exploring for gas at Russian deposits between 2008 and 2010.
“In three or four years a market will be formed in Russia that will be twice as large in terms of revenue as the traditional European market,” Miller said, adding Russia’s domestic natural gas market will grow to double the value of the company’s European gas sales over that period.
Gazprom received 356 billion rubles in revenue from domestic sales of 316 billion cubic meters of gas in 2006. The company earned 846 billion rubles in revenue from the sale of 161.5 billion cubic meters of gas to Europe in 2006, according to the company’s web site.
Gazprom supplies a quarter of Europe’s natural gas and currently relies on exports for most of its income. It ships all its exports to Europe by pipeline, and plans to enter the global gas market next year when it makes its first shipment of liquefied natural gas, which is chilled to a liquid for transport by tanker.
The state-run producer will spend 90 billion rubles a year searching for gas from 2010 through 2020 and expects production to reach 563 billion cubic meters this year, Miller said. 
The company is also planning to establish a chain of automobile filling stations in Europe that sell natural gas instead of gasoline or diesel.
“We’re proposing to our European partners that we establish a massive network of natural gas filling stations in Europe with Gazprom’s participation,” Miller said.
Gazprom on Monday posted a 36 percent jump in fourth-quarter profit on record prices for European customers. Net income climbed to 232 billion rubles ($9.9 billion).

TITLE: Jackson-Vanik Amendment Under Discussion With U.S.
PUBLISHER: Reuters
TEXT: MOSCOW — A move for the United States to lift a Cold War-era restriction on trade with Russia when it joins the World Trade Organization (WTO) will face opposition in Congress, U.S. Treasury Secretary Henry Paulson said on Monday.
Russia, which started its bid to join the global trade watchdog in 1995, aims to finish work on a multilateral agreement opening the way for membership later this year. It has already struck a bilateral membership deal with Washington.
Russia’s WTO membership would require Congress to establish permanent normal trade relations with Russia by removing it from the dwindling list of countries subject to trade restrictions under the so-called Jackson-Vanik amendment.
“It will not be easy. There will be opposition in the Congress (to removing the amendment) but I think it will be important to try,” Paulson told the Ekho Moskvy radio station during a visit to Russia.
The Jackson-Vanik amendment, approved in 1974, tied normal trade relations with the Soviet Union and other centrally planned economies to the rights of Jews and other religious minorities to emigrate freely.
Russia has been in compliance with the conditions set out in the Jackson-Vanik amendment since 1994.
But some lawmakers in the United States have tied lifting the Jackson-Vanik amendment to Russia improving its record on human rights.
U.S. lawmakers have insisted that Moscow finish negotiations on joining the WTO before they vote to lift the measure. Paulson said he did not know when the amendment would be lifted.
The United States is currently as large a trading partner for Russia as Finland, accounting for about six percent of Russian foreign trade in 2007. Both Moscow and Washington want to boost trade.
Paulson was in Moscow for talks with Russia’s top leaders that some observers say could help shift the focus of a sometimes frosty U.S.-Russia relationship towards the more productive areas of trade and investment.
Congressional refusal to lift the amendment would not block Russia from joining the WTO. But it would allow Moscow to legally deny U.S. companies from sharing in the concessions it has made to join the world trade body.

TITLE: Investors Hungry for Farmland in Russia
AUTHOR: By Nigel Hunt
PUBLISHER: Reuters
TEXT: LONDON —  Record prices for crops such as wheat and corn this year have sparked a surge of investment interest for farmland in Russia and Ukraine, a region with large untapped potential but also significant risk. 
“It is a bit of a frenzy now as many companies are trying to get into the market. I think a more orderly function of the land market is important,” Sevki Acuner, deputy director for agribusiness at the European Bank for Reconstruction and Development, said Friday. 
Acuner told a London conference organized by Troika Dialog that the bank has received an increasing number of project requests during the past six to nine months from investors trying to gather land in the former Soviet Union. 
“We hadn’t thought we were going to go down that route, but we are looking at three to four transactions, not just in Russia but Ukraine as well,” he said. “It is a one-time opportunity. You will have to grab whatever land is available to reach critical mass.” 
Troika Dialog, in a report issued earlier this month, estimated that the Commonwealth of Independent States has 13 percent of the world’s arable land, yet grows only 6 percent of its crops and farms just 3 percent of the world’s meat. 
“New entrepreneurs with fresh technology and ideas have tremendous scope to increase production dramatically,” the report said. 
Russia is now the world’s largest meat importer and is looking to revive its livestock sector. 
Kingsmill Bond, chief strategist for Troika Dialog UK, said many Russian political leaders welcomed foreign investment in land development. But analysts warn that foreign landowners could become targets should nationalist sentiment rise, while a more extreme climate than in Western Europe means yields could vary widely. 
“In the long term it is a risk and one reason to focus on processing rather than a pure land play,” Bond said.

TITLE: New Auto-Parts Venture Planned
PUBLISHER: Bloomberg
TEXT: Russian Technologies Corp., its AvtoVAZ carmaking division and Troika Dialog investment bank plan to create an auto-parts venture, Kommersant reported, citing Russian Technologies Chief Executive Officer Sergei Chemezov.
The holding company would initially be composed of AvtoVAZ’s components division and may expand to include components units of Troika’s KamAZ automotive unit and carmaker SOK Group, the Russian newspaper said.
The venture, financed by Troika, would have a target of controlling 40 percent of Russia’s market for car components, the newspaper said, citing AvtoVAZ CEO Boris Alyoshin.
Renault and Nissan Motor are considering a role in the partnership, Kommersant said, citing Chemezov. Vladimir Avetisyan, a former board member at Unified Energy System, will run the company, according to Kommersant.

TITLE: Putin Defends Decision
PUBLISHER: The St. Petersburg Times
TEXT: Prime Minister Vladimir Putin said Sunday that a recent decision to boost the minimum wage “shouldn’t have a serious effect” on inflation. 
Speaking before State Duma deputies from the ruling United Russia party, which he leads, Putin said the recent decision to nearly double the minimum monthly wage from Jan. 1 to 4,430 rubles ($193) was a difficult one. 
“It is, of course, connected to a certain extent with inflation, but we’ve decided to take that step,” he said, according a statement posted on the party’s web site. 
“Government experts have determined that [the increase] shouldn’t have a serious effect on inflation,” he said, calling on United Russia to do more to explain its work — including politically sensitive decisions — to the people. “It would be extremely counterproductive to stick our heads in the sand, since a different part ... will be sticking out all the same,” he said. 
He also praised comments by State Duma Speaker Boris Gryzlov against slowing down the economy to contain inflation. 
President Dmitry Medvedev said last week that prices were rising more than twice as fast as an original target of 5 to 6 percent per year.

TITLE: In Brief
TEXT: <b>Kopeikin for Aeroflot</b>
ST. PETERSBURG (Bloomberg) — Russian government deputy chief of staff Mikhail Kopeikin has been nominated to become chairman of Aeroflot, Vedomosti reported, citing unidentified people with knowledge of the matter.
Aeroflot’s board may vote on Kopeikin’s candidacy this week, the newspaper said, adding that the move needs approval from Prime Minister Vladimir Putin and his deputy Sergei Ivanov.
Kopeikin will replace Viktor Ivanov, a former senior member of Russia’s Federal Security Service and close Putin aide, who has held the post since 2004, according to Vedomosti.

<b>RTS Mulls New Hours</b>
ST. PETERSBURG (Bloomberg) — The RTS, Russia’s second-biggest stock exchange, is considering opening earlier to make trading more accessible across the country’s 11 time zones.
“The market is practically closed for the parts of Russia located east of Krasnoyarsk,” RTS Chairman Roman Goryunov said at an investment conference in St. Petersburg on Thursday, referring to a Siberian city four hours ahead of the Russian capital.
The RTS’s FORTS market for futures and derivatives began running evening trading session on May 26 from 6 p.m. to 11:50 p.m. The RTS will decide in the second half of this year on whether to start an earlier morning session, Goryunov said.

<b>More Yukos Charges</b>
ST. PETERSBURG (Bloomberg) — Lawyers for Mikhail Khodorkovsky said Russian prosecutors have filed a new charge against the jailed former owner of Yukos Oil, who was sentenced to eight years for fraud and tax evasion in 2005.
The new charge is related to alleged embezzlement during Khodorkovsky’s tenure as Yukos owner, and his lawyers said Monday that they failed to find anything new about it even after spending several hours reading through the 145-page indictment, according to a statement on his defense team’s web site.

<b>Megafon Profits Soar</b>
MOSCOW (Bloomberg) — MegaFon, Russia’s third-largest mobile-phone company, said profit advanced 51 percent in the first quarter as it lured subscribers and existing customers spent more money on services.
Net income rose to 9.26 billion rubles ($395 million) from 6.14 billion rubles a year earlier, St. Petersburg-based MegaFon said in an e-mailed statement Monday. Sales climbed 29 percent to 37.8 billion rubles.

<b>Nuclear Contract Inked</b>
MOSCOW (Bloomberg) — Power Machines, Russia’s biggest supplier of equipment for the electricity industry, signed a contract for more than 4 billion rubles ($171 million) to supply thermal equipment for a nuclear power plant.
The engineering company, controlled by Russian billionaire Alexei Mordashov, will send the equipment through 2010 to the Kalininskaya nuclear plant in the central Tver region, Moscow-based Power Machines said in an e-mailed statement Monday.
Power Machines is 25 percent owned by Germany’s Siemens AG.

<b>Sugar Duties Set to Soar</b>
MOSCOW (Bloomberg) — Russia, the world’s largest sugar importer, will raise duty on shipments of the raw product into the country by at least 57 percent for six months starting December as it seeks to support domestic beet farmers.
The tariff will rise to between $220 and $270 a metric ton, from $140, following a similar increase last year, Agriculture Minister Alexei Gordeyev said Friday, RIA Novosti reported. The comments were confirmed Monday by a ministry official who declined to be identified because of ministerial rules.

<b>Dairy Giant Plans Loan</b>
MOSCOW (Bloomberg) — Wimm-Bill-Dann, Russia’s biggest dairy company, plans to borrow $343 million in four loans this year, Interfax reported, citing company materials.
Wimm-Bill-Dann may borrow $100 million or the equivalent of that amount in rubles from each of Raiffeisenbank, Credit Agricole’s Calyon Rusbank and Nordea Bank’s Orgresbank, the news service said. The company also plans to borrow 1 billion rubles ($43 million) from Bank of Moscow, Interfax said. The loans will mature in as many as three years, the news service reported.

<b>Russia Seeking Venture</b>
MOSCOW (Bloomberg) — Russia wants to create a joint oil venture with the European Union, according to Sergei Bogdanchikov, chief executive officer of Rosneft.
Russia would contribute oil production assets and the EU should offer refining and marketing facilities, Bogdanchikov told reporters at the World Petroleum Congress in Madrid on Monday.
“It’s necessary to create full-scale projects to show to European customers” why oil prices are so high, Bogdanchikov said. Preliminary talks have already taken place with EU officials, he added.

<b>Monopolies Thriving</b>
MOSCOW (Bloomberg) — One-fifth of Russian firms have no serious competitors, Vedomosti said, citing a report by the Anti-Monopoly Service.
More than half the violations of anti-monopoly law were committed by state corporations, which are opaque, receive unfair state support in the form of budget funds and transfer property without tenders, the Moscow-based paper said, citing the report.
Five companies account for 80 percent of oil production and 75 percent of its refining, while the volume of oil extracted by small companies has halved in the past 10 years to 5 percent, the paper said.  The majority of air routes are monopolized and only two airports have alternative fuel companies, the newspaper said.

<b>36.6 Sees Slower Growth</b>
MOSCOW (Bloomberg) — Pharmacy Chain 36.6, Russia’s largest drugstore company, said first-quarter sales climbed at the slowest pace in nine quarters after expansion slowed and distribution was interrupted.
Sales rose 51 percent to $280 million from $185.1 million a year earlier, the Moscow-based company said Monday in a statement. In last year’s fourth quarter, sales advanced 59 percent, according to 36.6’s web site.
Slower growth “was expected because they opened fewer stores in the period and haven’t fully fixed problems with supplies” caused by last year’s introduction of a new logistics system, said Svetlana Sukhanova, an analyst at UBS AG in Moscow.

TITLE: Food Stamps Get Approval
AUTHOR: By Maria Levitov
PUBLISHER: Bloomberg
TEXT: MOSCOW — Most Russians want the government to issue food stamps to help low-income individuals cope with soaring prices, a survey showed.
Fifty-one percent of Russians say the government should hand out food stamps and 28 percent say they need them because they’re struggling to pay for food, according to a poll released Thursday by the state-run All-Russian Center for the Study of Public Opinion, or VTsIOM.
President Dmitry Medvedev called spiraling inflation Russia’s “most pressing problem at the moment” after it accelerated to an annual 15.1 percent in May, the fastest pace in more than five years. The government seeks to slow price growth to 10.5 percent by year-end.
The cost of a basket of staple foods that includes necessities such as bread and milk increased by 20 percent this year through May to cost 2,155 rubles ($91.89) per month, according to the Federal Statistics Service. The average monthly wage is 17,034 rubles, the statistics office said.
Twenty percent of Russians who believe the state shouldn’t create food stamps say instituting them would be an “embarrassment” for the country, according to the survey. Fourteen percent fear their adoption would spur misuse and corruption, said the poll of 1,600 individuals taken June 7-8. The margin of error is 3.4 percentage points, it said.

TITLE: Putin Applauds Ukraine’s Gas Payments
PUBLISHER: Combined Reports
TEXT: MOSCOW — Prime Minister Vladimir Putin on Saturday praised Ukraine for making timely payments for its gas supplies this year during new pricing talks and welcomed a pledge to host Russia’s Black Sea Fleet until 2017. 
“For the first time in many years, there is no debt on ongoing payments between Russian suppliers and Ukrainian energy consumers,” Putin told a news conference after talks with Ukrainian Prime Minister Yulia Tymoshenko. 
The comments came after Gazprom chief executive Alexei Miller said Friday that prices for Ukraine would most likely rise to more than $400 per 1,000 cubic meters, from $179.5 this year. 
Putin blamed Central Asian producers Turkmenistan and Uzbekistan, whose fuel Gazprom supplies to Ukraine, for possible price increases. He said the gas price had become “excessively politicized” and that it was an “economic issue” that should be decided by the companies involved, not governments. 
“We would like to move to the European price formation principles for Ukraine gradually, but you know the position of our partners in Central Asia, who want to raise prices from January 1 of next year,” Putin said. 
“We are in the process of negotiations. It is too early to talk about the outcome,” Putin added. 
Analysts are watching the Russian-Ukrainian gas talks because Gazprom supplies one-quarter of the European Union’s gas needs mainly through the territory of Ukraine. 
A pricing dispute in January 2006 led to major disruptions of Russian gas supplies to Europe for several days in the middle of winter. 
Tymoshenko said Ukraine would stick to an agreement to host Russia’s Black Sea Fleet until 2017, despite its bid to join NATO, and will not take any unilateral action to push Russia from the naval base earlier. 
Ukrainian President Viktor Yushchenko in May ordered his government to prepare a bill formally ending Russia’s presence in the naval base in Sevastopol, on the Crimean Peninsula, in 2017. 
“We have an agreement until 2017 and this agreement will be observed as Ukraine’s other international agreements, very accurately and without any deviations,” Tymoshenko told the news conference. 
Under the current lease deal, the deployment of the Black Sea Fleet in Ukraine could be prolonged by another five years if both sides agree. Russia pays Ukraine about $100 million in rent a year. 
“I would like to thank Ms. Tymoshenko for these words. Any unilateral action in this issue we consider destructive,” Putin said. He said Moscow might reduce its military cooperation with Ukraine if it joins NATO. 
Ukraine has a major arms and electronics industry inherited from the Soviet era, which relies on contracts with Russia’s military and space agencies. The industry remains state-owned and poorly adjusted to business-oriented relations with the West. 
“When it comes to security-sensitive technologies ... such production will be moved to the territory of the Russian Federation despite costs,” Putin said, referring mainly to Ukrainian-made engines in its cruise missiles. 
Putin said Ukraine would have to invest heavily into retrofitting its arms industry for production of weapons according to the Western alliance’s standards. (Reuters, AP, Bloomberg)

TITLE: Final Deal Made on UES’ Last Day
PUBLISHER: Reuters
TEXT: MOSCOW — Dubai will invest $100 million in electricity generator OGK-1, marking the last deal in the sell-off of former state power monopoly UES, the Russian company’s chief executive Anatoly Chubais said on Monday. 
With its assets sold or spun off, and a liberalized domestic power market in the works, state-owned Unified Energy System — formed in the early 1990s as a stopgap between the Soviet command system and privatization — ceases to exist on Tuesday. 
At a press conference marking the end of UES, Chubais said the Dubai government’s investment arm is guaranteeing investments in OGK-1, which is the subject of an offer of as much as $5.3 billion from a Russian company, Roskommunenergo. 
Chubais said the company had offered to buy OGK-1, which has big capital needs for stations in some of Russia’s most energy intensive oil and gas regions, at a price of $516 per kilowatt. 
Russian media have reported that Roskommunenergo was bidding on behalf of Dubai World. 
UES has already spun off 7 wholesale generating companies, known by the Russian acronym OGK, but an attempt to sell OGK-1 to a consortium of investors led by magnate Viktor Vekselberg failed as the group balked at its high investment needs. 
Roskommunenergo’s offer sent OGK-1 shares soaring 25 percent by 1000 GMT. They stood at 2.2 rubles (9 cents) per share, a discount of around 15 percent to Roskommunenergo’s offer price. Shares in UES were delisted earlier this month. 
In terms of price per one OGK-1 share, the Roskommunenergo offer works out at 2.6 rubles (10 cents) per share, a spokeswoman for UES told Reuters. 
Chubais said the total price would not exceed 125 billion rubles ($5.33 billion). 
Marking a new stage of Russian power reform, which will see the development of liberalized electricity trade, the government has approved the launch of a capacity market where independent generators can buy and sell each other’s excess capacity — a key step toward loosening state price controls. 
The decree was published on Monday in the government newspaper, Rossiiskaya Gazeta.

TITLE: Potanin Gets Majority Elected To Norilsk to Retain Control
AUTHOR: By Yuriy Humber and Maria Kolesnikova
PUBLISHER: Bloomberg
TEXT: MOSCOW — Billionaire Vladimir Potanin retained control of GMK Norilsk Nickel’s board after a vote Monday by investors in Russia’s biggest mining company.
Potanin, the largest shareholder, got four directors elected to the board, Norilsk Chairman Andrei Klishas, who is also chairman of Potanin’s investment company, Interros Holding, told reporters in Moscow on Monday. United Co. RusAl, the second-biggest shareholder, got three, Klishas said.
Investors met to elect Norilsk’s board as Potanin and RusAl, the world’s largest aluminum producer, wrangle over control of the company. Rusal, controlled by Russia’s richest man Oleg Deripaska, has said it intends to seek a merger with Norilsk, which would create a diversified mining company that could compete with Australia’s BHP Billiton.
Rusal bought 25 percent of Norilsk in April, and in May criticized the nickel producer’s management for lack of growth. Potanin, who owns just less than 30 percent of Norilsk, opposes RusAl’s plan and has proposed an alternative three-way merger with Metalloinvest, the iron-ore miner controlled by Alisher Usmanov.
In the run-up to Monday’s vote, both Potanin and Rusal lobbied Norilsk  minority investors for support.
Potanin, Klishas, Interros Managing Director Andrei Bougrov, and Michael Levitt, Chairman of Stone Tower Equity Partners LLC, will represent Interros. Rusal will be represented by its Chief Executive Officer Alexander Bulygin and shareholders Deripaska and Mikhail Prokhorov. Prokhorov sold his stake in Norilsk to RusAl in April.
Two independent directors, Guy de Selliers and Heinz Schimmelbusch, will join the new board, compared with four previously.
Interros said last week it would support Levitt as its own candidate after a report by RiskMetrics Group, a Washington-based consultant, questioned his prior status as an independent and said he was financially linked to Potanin.
Norilsk investors also supported increasing the board to 13 directors, from nine previously. Norilsk investors will meet again to elect a new board of 13.

TITLE: Putin: Russia Set for Sovereign Wealth Funds
PUBLISHER: Reuters
TEXT: MOSCOW — Russia does not yet have a sovereign wealth fund (SWF) but is working to create one, Prime Minister Vladimir Putin told U.S. Treasury Secretary Henry Paulson on Monday. 
Paulson, who was in Russia to discuss trade and investment, told Putin the United States welcomes Russian investment and both sides were working together to outline best practices for SWFs, owned by governments of cash-rich countries. 
“Since we do not have a sovereign wealth fund yet, you are confusing us with someone else,” Putin told Paulson during a meeting in the Kremlin, adding that Russia had indeed created “various funds.”
“But we are ready to do it (create a SWF), especially if you want us to,” Putin said, noting that all of Russia’s $8 billion investment in the U.S. economy was of private nature. 
Russia split its oil stabilisation fund this year into a $129 billion Reserve Fund, which will cushion the budget from a fall in oil prices, and a $33 billion National Wealth Fund (NWF) earmarked for riskier investments. 
Both funds invest now in top-rated bonds, on which returns are low. The Finance Ministry, which runs both funds, and the central bank, which acts as the government’s asset manager, have to draft proposals on the fund’s investment strategy by Oct. 1. 
Russia plans to set up a government agency which will manage its sovereign wealth fund and will resemble Abu Dhabi Investment Authority, which agreed last November to buy $7.5 billion of stock in Citigroup. 
“We can discuss what you have called the ‘various funds’ but we very much welcome your investment,” Paulson told Putin. 
The International Monetary Fund is drawing up principles for best practice in governance and transparency for SWFs, amid worries in the developed world about politically-motivated acquisitions. 
A Russian delegation took part in the process.

TITLE: Cyrillic Web Sites Approved
PUBLISHER: Agence France Presse
TEXT: MOSCOW — Russia will be able to create its first Internet addresses using the Cyrillic alphabet next year, communications ministry official Vladimir Vassiliev told Interfax news agency on Sunday. 
The move follows a decision by the organisation that regulates the Internet to deliver a radical shake-up to the domain-name system. 
Russia, which currently uses two top-level domain names .ru and .su, will be able to create a third in Cyrillic by the second quarter of next year, Vassiliev said. 
Some Russians have trouble using the Latin alphabet and being able to surf the web entirely in Russian would lead to an increase in the number of users, he said. 
At the beginning of June, Russian President Dmitry Medvedev, an internet enthusiast, said it was very important for Russia to have domain names in Cyrillic, mainly to reinforce the role of the Russian language in the world.

TITLE: Life After Death in the EU
AUTHOR: By Andrej Benedejcic
TEXT: According to a Brussels anecdote, the main revelation of every European Union presidency at the end of its six-month stint is that there is life after death after all. This is a telling comment on the pressures and challenges faced by any country at the helm of the EU, which has to invest a considerable amount of effort and energy in ensuring the smooth running of the union. 
In this sense, the Slovenian EU presidency, which ends Monday, was a success. It not only managed to tackle the strenuous task of coordination, but also achieved some tangible results. One of them is the long-awaited EU mandate for negotiations on the new framework agreement with Russia, which were officially started Friday at the EU-Russia summit in Khanty-Mansiisk. 
The success was due to a number of factors. One of them was the increasing conviction among the EU member states about the necessity for a new, updated basis of relations with Russia that would replace the outdated 1997 Partnership and Cooperation Agreement. Also important was that Slovenia, although a relatively young country, is an active player on the international stage, with concrete multilateral experience as a nonpermanent member of the United Nations Security Council from 1998 to 1999 and chairman of the Organization for Security and Cooperation in Europe in 2005. This has not only attuned the Slovenian diplomatic system to quick action and internal coordination, but also injected an understanding of the importance for constructive dialogue and consensus building. 
In this sense, it is not surprising that at the beginning of May, Slovenian Foreign Minister Dimitrij Rupel decided to go to Vilnius in the unorthodox format of an “open troika.” Rupel was accompanied by the foreign ministers of Poland and Sweden in a last-ditch effort to secure the negotiating mandate for the new framework agreement. This was followed by an ad hoc visit to Tbilisi to address concerns raised by Lithuania regarding Moscow’s attitude toward the “frozen conflicts,” especially in Georgia. The action undertaken and the resulting package of compromise proposals made it possible for the general affairs and external relations council of the EU to adopt the negotiating mandate for the new agreement in Brussels on May 26. 
This does not mean, however, that the negotiations will be easy. The very form, title and substance of the new agreement between the EU and Russia still needs to be defined during future talks, the first round of which will take place this week, under the new French EU presidency. 
The location of Friday’s EU-Russia summit also hints at one of the main possible points of disagreement. Khanty-Mansiisk, located 2,700 kilometers east of Moscow in Siberia, is where the lion’s share of the country’s oil and gas is produced. When it comes to energy issues, some EU members strongly believe that the new framework document should include certain points of the Energy Charter Treaty. Although Russia signed the treaty at the beginning of the 1990s, it refuses to ratify it in its current revision mainly because of the provision regarding third-party access to the pipelines and transit fees. Hopefully, an understanding will be reached that will ensure a transparent and reciprocal EU-Russia energy cooperation that is acceptable to everyone. 
Despite all the challenges, the EU and Russia have more in common than not. This was emphasized by Slovenian Prime Minister Janez Jansa in his capacity as the president of the European Council, the body that is comprised of the EU members’ heads of state or government. At the closing news conference of the EU-Russia summit on Friday, Jansa pointed out “the symbolism of the summit, the first one where Slavic speech was heard on both sides of the table.” 
The meeting in Khanty-Mansiisk was therefore the right opportunity to open a new chapter in mutual relations — especially since President Dmitry Medvedev marked his debut at a major international event with a positive style and tone, which created a very constructive atmosphere. 
Despite the fact that a number of delicate and controversial issues remain on the table, the road ahead looks more promising than ever. After all, for the first time since 2003, the EU and Russia were able to agree on summit declarations by adopting joint statements on the launch of negotiations and on cross-border cooperation. 
As for Slovenia, we have shown in the past six months that new member states are reliable partners, which can deal with the challenge of an EU presidency and are genuinely interested in deepening the EU-Russia relationship.

Andrej Benedejcic is the Slovenian ambassador to Moscow.

TITLE: Putting Meat In EU Summit Talks
AUTHOR: By Vladimir Frolov
TEXT: In Khanty-Mansiisk on Friday, Russia and the European Union finally kicked off negotiations on a new strategic agreement. 
At the EU-Russia summit, President Dmitry Medvedev described the new agreement as a “brief, legally binding framework document” that would not be “excessively detailed.” The principal document will deal with the “strategic aspects” of the EU-Russia relationship and will be supplemented by “sector agreements,” which would essentially put meat on the bones of the strategic framework.
The EU diplomats offered a different outlook. A senior foreign policy aide to German Chancellor Angela Merkel told an EU-Russia conference in Berlin on June 17 that if Russia adopted a “pick-and-choose approach” and sought to advance on areas of interest to Moscow — like visa-free travel and access to the EU market — while stonewalling on areas of greater importance to the EU — like equal access for EU companies to Russia’s energy sector — it would be impossible to ensure ratification of the new agreement by all EU member states.
The EU would be seeking a “comprehensive agreement,” in which “nothing is agreed until everything is agreed,” said the German official. It would be possible to negotiate narrower sector agreements with Russia, but only if they were negotiated signed and submitted for ratification as a “single package.”
It is likely that the two sides will have to meet each other halfway and agree on what would constitute a “single package” and what should be added to it later as interests converge and the need for agreements becomes clearer.
While agreement on issues like international terrorism or nuclear proliferation would appear easy to reach, dealing with topics that arouse real passions, like energy security and conflicts in the former Soviet Union, is challenging. Russia does not accept the EU’s vision for a “common neighborhood” that would include former Soviet states in the EU sphere of close engagement, while the EU insists that there would be no toleration for a Kremlin-designed “Monroe doctrine in Europe.” 
As someone who from 2002 to 2003 helped negotiate an EU-Russia deal on Kaliningrad, I can tell you that everything is possible in EU-Russia relations if there is a political will to do it. 
If you are doubtful about this, just buy a train ticket to Kaliningrad at a remote railroad station in Siberia. You will see the Shengen visa system process your application electronically in a matter of hours. No consulates required.

Vladimir Frolov is president of LEFF Group, a government relations and PR company.

TITLE: Hiddink No Corrupt Nincompoop
AUTHOR: By Alexei Bayer
TEXT: Economists and investors like talking about the BRIC countries, meaning Brazil, Russia, India and China. Besides making a clever acronym, it would seem that the four don’t have a lot in common as far as history, culture or economic structure is concerned. 
But the BRIC countries are all vast landmasses occupied by large populations with relatively low per-capita incomes that have enjoyed rapid economic growth over the past decade. In addition, they are drawing closer together. Look at the young players on the Russian football team who embarrassed established European powers and thrilled fans in Austria and Switzerland.
Despite its loss to Spain in the semifinal, Russia’s fantastic performance at the European football championship united the nation and brought overjoyed fans to the streets. But sports is never free of politics — especially not among former Cold War powers, who for four decades after World War II fought proxy battles at Olympic stadiums and ice rinks around the world. There has been a persistent drumbeat in the pro-government Russian media implying that the team’s success — combined with a win earlier this year at the World Hockey Championship in Quebec and Zenit victory in the UEFA Cup, as well as the first-place finish by singer Dima Bilan on Eurovision — are somehow the result of Vladimir Putin’s eight years as president. 
The myth being promulgated by the Kremlin describes Russia as downtrodden when democrats were in power in the 1990s. State assets were squandered and sinister elements abroad conspired to keep Russia weak. But now, under Putin’s firm and wise leadership, Russia has risen from its knees. It is rich, economically powerful, politically stable and once more respected by foreigners. Is it a surprise that sports victories have followed?
But in recent history, there is little connection between sporting success and economic prosperity or political stability. Argentina won its two football World Cups in 1978 and 1986, when the country was oppressed by a military junta and struggled with hyperinflation. Moreover, midway between its two football victories, the country experienced a disastrous military misadventure in the Falklands. 
Brazilians, meanwhile, have been playing football with a little less dazzle since they began their current spurt of economic growth around 2002. Universal favorites, they failed to make it to the final of the 2006 World Cup.
In Russia, the success of its football team makes a mockery of the Kremlin’s political doctrine. Its leaders never tire of talking of the country’s special historic path. They reject Western experience and denounce its model for democratic society and a market economy. Russia, they claim, is sui generis — it needs its own “sovereign democracy” as well as an economy that is dominated by the state and managed by bureaucrats. 
Yet, the football team won because Guus Hiddink, a world-class coach with a proven international track record, was brought in, not some corrupt nincompoop with Leningrad ties to Putin.
Another myth is that Russia is finally reclaiming the Soviet-era grandeur. This is nonsense. Watching Russian fans nowadays brings tears to my eyes when I compare them with what Soviet fans used to look like at international competitions. Only two decades ago, they were shabby, uptight and frightened members of tiny delegations — hand-picked by the Komsomol after a lengthy vetting process. They got puny amounts of hard currency, which they scrupulously saved, eating canned fish in their hotel rooms so that they could buy Western goods anywhere they could. They sat sheepishly in their seats and chanted half-heartedly when prompted by their brooding KGB chaperones.
Russia has indeed risen from its knees. But contrary to conventional wisdom, it didn’t happened under President Vladimir Putin, but in 1991, when it sent communism to the dust heap of history.

Alexei Bayer, a native Muscovite, is a New York-based economist.

TITLE: Park Thanks Pak For Inspired Win
PUBLISHER: The Associated Press
TEXT: EDINA, Minnesota — Inbee Park gazed at the names on the silver trophy that now belongs to her, amazed that someone who only learned how to play golf 10 years ago could join such a select group as U.S. Women’s Open champions.
One name in particular meant the world to her.
Se Ri Pak wasn’t at Interlachen Country Club on Sunday when the 19-year-old Park made three birdies on the back nine to pull away for a four-shot victory over Helen Alfredsson. It was the first time since Pak won the Women’s Open in 1998 that she missed the cut.
Even so, Park couldn’t have won without her.
“I really would like to thank Se Ri for what she’s done for golf, for Korean golf,” Park said. “Ten years ago, I was watching her winning this event on TV. I didn’t know anything about golf back then. But I was watching her. It was very impressive for a little girl. I just thought that I could do it, too.”
Pak was 20 when she captured the Women’s Open at Blackwolf Run, setting off a craze in South Korea. Not since Francis Ouimet won the 1913 U.S. Open has a single player inspired a nation of golfers.
Park became the fifth South Korean to win an LPGA Tour major, the second only to the list of American major champions. And she replaced Pak as the youngest winner of the U.S. Women’s Open, still two weeks away from her 20th birthday.
“I have no idea what’s happening right now,” Park said after closing with a 2-under 71, the only player to break par at Interlachen all four rounds. “I am very honored to win this championship as a first win for my career. And hopefully, there will be a lot more coming up. This is a special tournament for me, and I won’t forget this moment.”
Park finished at 9-under 283 and won $585,000, the richest prize in women’s golf. She became the third player in the past six years to make the Women’s Open their first LPGA Tour victory, joining Birdie Kim in 2005 at Hilary Lunke in 2003.
It was a day that Stacy Lewis and Paula Creamer won’t soon forget, either.
Lewis was poised to make history of her own as the first player to win a major in her professional debut. The former NCAA champion from Arkansas, an inspiring player who overcame back surgery after graduating high school, Lewis took a one-shot lead into the final round and already was two shots behind after just two holes.
She was 80 yards short of the green after two shots on the par-5 second hole and still made double bogey after two bad chips and three putts, one from 15 yards in the fairway. Still tied for the lead through seven holes, she bogeyed the next two and never recovered on her way to a 78 to tie for third.
“I finished third at the U.S. Open, my first pro event,” Lewis said. “It’s kind of hard to be upset.”
Creamer had far more reason to be shell-shocked.
She is 21 and a seasoned pro, winning six times in four years since joining the tour before her class graduated high school. Presented with her best chance of winning her first major, Creamer took two double bogeys on the front nine for a 41, and only a late birdie allowed her to get her first top 10 in a Women’s Open. She shot 78 and tied for sixth.
Three years ago when Creamer started the final round one shot out of the lead, she shot 79. Her scoring average in the final round of the U.S. Women’s Open is 75.2
“It’s probably the most disappointed I’ve been in a very long time,” she said.
Alfredsson finished second after a 75. She played with Park in the second-to-last group, two shots behind, but took 35 putts in the final round and was never closer than two shots after the third hole.

TITLE: Discredited Mugabe Meets AU Leaders
AUTHOR: By Paul Schemm
PUBLISHER: The Associated Press
TEXT: SHARM EL-SHEIKH, Egypt — Zimbabwe President Robert Mugabe sought a boost of political legitimacy at a summit of African leaders Monday after his re-election was condemned by much of the rest of the world as a sham.
Mugabe’s fellow leaders appeared unlikely to strongly criticize him, hoping instead to gently urge him to engage in some sort of power-sharing agreement.
The African Union summit got under way in this Egyptian Red Sea resort a day after Mugabe was sworn in as president for a sixth term following the widely discredited runoff Friday in which he was the only candidate. Opposition leader Morgan Tsvangirai withdrew after his supporters became targets of brutal state-sponsored violence.
Tsvangirai dismissed Mugabe’s inauguration as “an exercise in self-delusion.”
A draft resolution written by AU foreign ministers during two days of talks before the summit did not criticize the runoff election or Mugabe. The draft, a copy of which was obtained by The Associated Press, condemned violence in general terms and called for dialogue.
But harsher words were spoken by U.N. deputy secretary-general Asha-Rose Migiro, who called the situation an “extremely grave” crisis.
“This the single greatest challenge ... in southern Africa, not only because of its terrible humanitarian consequences but also because of the dangerous political precedent it sets,” she told delegates during an opening address.
In a report released Monday, African Union election observers cited the violence ahead of the Zimbabwe election as evidence the presidential runoff fell short of the body’s standards. The observers also said the opposition was denied equal access to the media during the campaign.
Mugabe has threatened to point fingers at African leaders if they speak out against him.
Zimbabwe’s government mouthpiece, The Herald, reported Monday that Mugabe “was prepared to face any of his AU counterparts disparaging Zimbabwe’s electoral conduct because some of their countries had worse” elections records.
African Union Commission chairman Jean Ping told delegates that Africans should “shoulder the responsibility” of helping Zimbabwe, but did not criticize Mugabe or speak harshly about the crisis.
Africa should “do everything in its power to help the Zimbabwe parties to work together in the supreme interests in their country so as to overcome its current challenges,” he said.
Most African governments — including regional powerhouse South Africa — have been reluctant to criticize Mugabe, whether because of long-standing ties to the Zimbabwean leader or because they do not want to be seen as backing the West against a fellow African.
Electoral officials said Sunday that Mugabe won 85 percent of the vote in Friday’s runoff, which observers said was marred by violence and intimidation. Just hours after he was declared the winner, Mugabe, who has been Zimbabwe’s leader since independence in 1980, sounded a conciliatory note.
“Sooner or later, as diverse political parties, we shall start serious talks,” he said in a speech following his swearing-in Sunday. He also had promised talks on the eve of the vote.

TITLE: Shock Departures Rock Wimbledon
AUTHOR: By Pritha Sarkar
PUBLISHER: Reuters
TEXT: LONDON — For three days running, a series of seismic shocks ripped through Wimbledon, causing destruction rarely witnessed so early at a grand slam tournament.
The exit of Australian Open champion Novak Djokovic rocked the All England Club on Wednesday and 24 hours later 2004 Wimbledon winner Maria Sharapova and twice runner-up Andy Roddick were also ejected.
On Friday, the biggest name in the women’s draw, top seed and newly-crowned French Open champion Ana Ivanovic, was toppled in round three.
The quartet were not the only players forced to catch early flights out of London: as the event goes into its second week, only six of the men’s top 16 seeds and eight of the women’s have made it through to the fourth round.
For the men, it was their worst performance at Wimbledon since 2002 when only two top-16 seeds survived the first week.
While Roger Federer and Rafael Nadal have ruthlessly cast aside their opponents to reach the last 16, more significantly for local fans 12th seed Andy Murray also survived the cull to keep alive Britain’s hopes of ending the 72-year wait for a home-grown men’s champion.
The seeds who were not so lucky included Djokovic (3), Nikolai Davydenko (4), David Ferrer (5), Roddick (6), David Nalbandian (7), James Blake (9), Tomas Berdych (11), Paul-Henri Mathieu (14), Fernando Gonzalez (15) and Radek Stepanek (16).
Before the tournament started, many pundits were predicting the end of Federer’s five-year Wimbledon reign after he was thrashed by Nadal in the French Open final three weeks ago.
Even Swedish great Bjorn Borg, whose modern-era record of five successive Wimbledon men’s titles Federer equaled in 2007, had picked the Swiss maestro as his third favorite for the championship, behind Nadal and Djokovic.
While Djokovic has already left the grass-court grand slam with his tail between his legs and Nadal dropped a set in the second round, Federer has silenced his detractors by gliding past his opponents.
“Last year out of 100 people, 90-95 would have picked Federer and the other five or 10 would have picked Nadal [for the title],” three-times men’s champion John McEnroe said.
“Now it’s at least 50-50 maybe picking Nadal, if not 60-40. I still pick Federer. All you have to do is see what has happened in the last [few days] and you realize and appreciate how great a run Roger has had, how consistent he’s been.”
Little-known Russian Alla Kudryavtseva and Chinese doubles specialist Zheng Jie had little in common when they walked through the All England Club gates last Monday.
By the end of the week, both had been elevated to superstar status as they wielded their rackets to send three-times grand slam champion Sharapova and world number one Ivanovic packing.
Fans were stunned when Kudryavtseva, the daughter of a Greco-Roman world champion wrestler, floored third seed Sharapova in the second round and then the 1.85-meter tall Ivanovic was blown off court by the diminutive Zheng.
“Everybody can present a challenge. Everybody is hungry. This girl that beat me…she might not win the tournament but she beat me and it probably made her tournament,” Sharapova said after winning only six games against her 154th-ranked opponent.
With both draws depleted, few would now bet against four-times champion Venus Williams contesting the women’s final with her sister Serena on Saturday, followed by Federer and Nadal playing out Act III of their intriguing Wimbledon rivalry in the men’s final the following day.

TITLE: Obama To Visit 
5 Nations
PUBLISHER: Reuters
TEXT: WASHINGTON — Democratic presidential candidate Barack Obama, looking to bolster his expertise in foreign policy, will travel to Europe and the Middle East to consult on issues like terrorism and nuclear proliferation, his campaign said on Saturday.
The trip to France, Germany, Great Britain, Jordan and Israel will take place before the Democratic convention in late August, when Obama will be nominated to face Republican John McCain in November’s presidential election.
Obama also plans to visit Iraq and Afghanistan this summer as part of a congressional delegation, but the campaign would not confirm those visits would be part of the same trip and would not give the exact dates of any foreign trips.
Obama, a first-term senator from Illinois, will meet with foreign leaders in an effort to build up his foreign policy credentials after attacks on the issue from rival McCain.
McCain, a former Vietnam prisoner of war and staunch advocate of the Iraq war, has questioned Obama’s readiness to be commander in chief of the armed forces and his willingness to talk to leaders of hostile foreign nations without preconditions.

TITLE: Phelps Sets World Record in U.S. Swimming Trials
PUBLISHER: The Associated Press
TEXT: OMAHA, Nebraska — Holding off one of his best friends, Michael Phelps started his second attempt to break Mark Spitz’s Olympic record with another epic swim.
Less than an hour later, the teenager he compares to a little sister joined Phelps in the record book.
Phelps set a world record in his first event of the U.S. Olympic swimming trials, touching just ahead of Ryan Lochte to win the 400-meter individual medley in 4 minutes, 5.25 seconds Sunday night.
Katie Hoff matched her former North Baltimore teammate in the 400 IM, taking down the women’s mark in 4:31.12.
Wearing the high-tech Speedo LZR Racer, Phelps beat his own mark of 4:06.22, set at last year’s world championships in Australia when he turned in one of the greatest performances in swimming history with seven gold medals.
After saying he had no fear of Phelps, Lochte proved it by also going under the previous record. But his time of 4:06.08 was only good enough for second with Phelps in the next lane over.
“That was probably one of the most painful races of my life,” the winner said. “Everything was left in the pool. I definitely would not have been able to do it without Lochte beside me. He’s a great friend and a great competitor. I love racing him.”
The 19-year-old Hoff — playfully described by Phelps as the little sister he never had — showed no signs of the nervousness that ruined her first trip to the Olympics four years ago. The youngest member of the U.S. team, she was overcome by the moment and threw up on deck after failing to advance from her first event.
All grown up, Hoff dipped under record pace on the breaststroke leg and held on with her freestyle to beat Stephanie Rice’s mark of 4:31.46, set in March at the Australian Olympic trials.
“Stephanie really raised the bar when she broke my old record,” Hoff said. “I’m just excited for Beijing, and I think it’s going to be a really tough challenging race with her.”
Like Phelps, Hoff also was wearing the revolutionary Speedo suit, which has been worn for 40 of the 44 world marks set since it was unveiled in mid-February.
“It definitely gave me a few tenths,” Phelps said. “At the end, when I was getting a little tired, the suit gave me a little extra edge.”
Larsen Jensen, also wearing the LZR, set an American mark in the 400 freestyle in a three-way race to the wall with previous recordholder Peter Vanderkaay and Erik Vendt.
Jensen’s time of 3:43.53 topped Vanderkaay’s mark of 3:43.82, which was set last month in California. Vanderkaay also went lower, touching second in 3:43.73.
Brendan Hansen just missed another world record in the 100 breaststroke semifinals, advancing to Monday’s final in 59.24. He holds the mark of 59.13, and nodded his head confidently when he looked toward the scoreboard.
Christine Magnuson was top qualifier in the semis of the 100 fly in 57.50— less than a second off Inge de Bruijn’s 8-year-old world record.
Phelps was slightly off world-record pace after the opening butterfly, but he had a body-length lead on Lochte as they switched to the backstroke.
The minus sign—indicative of a swimmer under record pace—flashed on the board when Phelps made his flip turn on the back, sending the crowd at the Qwest Center into a frenzy. 
But Lochte was starting to close the gap, and he nearly pulled even as they headed toward the far wall in the breaststroke.
Lochte, a world recordholder himself, was less than a second behind at the 300 mark and looked poised to pull off a monumental upset.

TITLE: Man Disappointed After Auctioning His Life
PUBLISHER: The Associated Press
TEXT: PERTH, Australia — A man who auctioned his life — his house, his car, his job, even his friends — on eBay said Monday he is disappointed with the selling price: almost $384,000.
Ian Usher, a British immigrant to Australia, put everything he owned as well as introductions to his friends on the online auction site after a painful breakup with his wife prompted him to want a fresh start.
Bidding closed Sunday and reached nearly $384,000 — an amount Usher said his house in the western city of Perth was worth on its own.
“I guess I’m a little bit disappointed at the final price, I’d hoped it to be a little higher than that,” Usher told Nine Network television on Monday. “But I am committed to selling and moving on and making a fresh start.”
He declined to reveal the buyer’s identity, or what his next step would be.

TITLE: Gay Runs Fastest 100m But Wind Denies World Record
AUTHOR: By Gene Cherry
PUBLISHER: Reuters
TEXT: EUGENE, Oregon — World champion Tyson Gay ran the fastest 100 meters of all-time to win the American Olympic trials on Sunday, a wind-assisted 9.68 seconds.
The victory put Gay into his first U.S. Olympic team but the wind speed of 4.1 meters per second deprived the 25-year-old of a world record.
Only marks set with assisting winds of 2.0 meters per second or less can be considered for record purposes.
“The time really meant a lot because that’s the time that (co-coach Jon) Drummond has been instilling in my head for a long time, that I could run 9.6,” Gay told reporters.
“I didn’t really care what the wind was.” Gay showed little emotion at the end of the race. “But inside I was happy,” he said.
Jamaican Usain Bolt holds the world record of 9.72 seconds. The previous best time under any conditions was a wind-assisted 9.69 seconds by Obadele Thompson of Barbados in 1996. Gay, who ran a national record 9.77 seconds on Saturday, made a solid start and by 40 meters was in complete control of the race. The double world champion will attempt to make the U.S. team in the 200 meters later this week with the first round on Friday.
Former collegiate champion Walter Dix finished second in 9.80 seconds with Darvis Patton third in 9.84 seconds. Both made the U.S. team.
Olympic long jump champion Dwight Phillips will not be in Beijing after finishing fourth with a wind-assisted leap of 8.20 meters.
Only the top three finishers make the team under the strict U.S. selection procedure. Trevell Quinley won the long jump with his last attempt, improving his personal best by 14 centimeters to 8.36 meters. Brian Johnson and Miguel Pate also finished ahead of Phillips.
World pole vault champion Brad Walker struggled but made the team with a third-place finish of 5.65 meters.
Two veterans led the way with 35-year-old Derek Miles winning at 5.80 and Jeff Hartwig, who will be 41 in September, second at 5.70.
Favorites prevailed in the men’s 400 meters hurdles but the women’s top choice, former world silver medalist Lashinda Demus, was outrun off the last hurdle and missed out on a place in the team.

TITLE: Sodomy Allegation Against Malay Leader Echoes Previous Scandal
PUBLISHER: Reuters
TEXT: KUALA LUMPUR — Anwar Ibrahim, leader of Malaysia’s revitalized opposition, left the Turkish embassy on Monday where he had taken refuge following sodomy accusations, the latest thunderbolt in Malaysia’s political tempest.
Anwar left the embassy around 6:45 a.m. via the ambassador’s residence. “Only after I received assurances of my safety, (did) I leave. I’m leaving on my own volition,” he told reporters.
The former deputy premier fled to the embassy early on Sunday fearing for his security after police began investigating a young aide’s allegation that Anwar had homosexually assaulted him. Foreign Minister Rais Yatim had summoned the Turkish ambassador on Monday to complain that Turkey had interfered in Malaysia’s internal affairs.
Anwar said he would cooperate with the police investigation, but feared a repeat of a similar drama a decade ago when he was accused of committing sodomy with the family driver and a political aide.
Anwar was sacked as deputy prime minister in 1998 and then jailed for corruption and sodomy after leading street protests against then premier Mahathir Mohamad’s government during the Asian financial crisis. The Supreme Court overturned the sodomy conviction six years later.
“I pray that enough will be done for my security,” Anwar, dressed in a black suit, said before climbing into his vehicle. “The new allegation is a repeat of the 1998 fiasco,” he said.
In a telephone interview with Reuters earlier, Anwar said the allegations pre-empted plans to announce this week he was running for a seat in parliament in a by-election, and that four ruling coalition lawmakers would defect to the opposition camp.

TITLE: Viva Espania as Spain Wins Soccer Fiesta
PUBLISHER: The Associated Press
TEXT: VIENNA, Austria — A big-game flop no more, Spain won the European Championship 1-0 over Germany on Sunday for its first major title in 44 years.
Fernando Torres scored in the 33rd minute and the Spaniards never backed down against such a formidable opponent. Their last significant title came in the 1964 Euros at home.
“It is a privilege to be in the national team and live through the most beautiful moment of getting the cup,” Torres said. “It will be good not only for Spain, but also for football because the team that played best won.”
In beating a team that makes a habit of appearing in championship finals, the Spaniards put to rest a reputation for underachieving. Always loaded with talented players, Spain has spent four decades falling short of expectations.
That all changed at these Euros, where the Spaniards swept their first-round games, eliminated World Cup champion Italy in a penalty-kicks shootout in the quarterfinals, then routed Russia 3-0 in the semifinals.
“We have won in a brilliant way,” coach Luis Aragones said. “We will be able to start saying we can win, a European championhip as well as any other thing.”
Against the highly accomplished Germans, they weren’t intimidated. They got the one goal they needed — from a slumping striker, no less — and set off chants of “ES-PANIA,” and “Ole, Ole Ole” at the final whistle.
The entire Spanish squad ran over to the huge rooting section of red and gold, exchanging hugs, while many of the spent Germans collapsed to the turf.
“It is to me the most important day in Spanish football in many, many years,” Torres said.
When Spain goalkeeper and captain Iker Casillas accepted the trophy on a stage, the Spanish fans began chanting the melody to their national anthem, which has no words. Thousands of camera flashes went off as the players jumped in place, then headed onto the field to show off their prize.
The Spaniards weren’t close to finished with their celebration that was so long in the making. They marched to their rooting section, hoisting the cup and saluting their flag-waving, firecracker-exploding fans.
Germany has won three Euros and three World Cups, but was no match in this final. Captain Michael Ballack, questionable before the game with a calf injury, started, but hardly was noticeable — except when he left for several minutes to have a bloody right eye treated.
“We had a great tournament, but made one mistake too many,” Ballack said. “We were lacking of power against a great Spanish team. We couldn’t keep up with them.”
Torres, who had 33 goals for Liverpool this season but has been invisible in Euros, came through off a brilliant feed from Xavi Hernandez.
Germany goalkeeper Jens Lehmann, at 38 the oldest player in the competition, charged from his net when he saw that defender Philipp Lahm was beaten on the right side. But Torres chipped the ball over the sliding Lehmann and into the gaping goal.
The crowd of 51,428 at Ernst Happel Stadium, split almost equally between Germany and Spain, might have expected the Spaniards to go into a protective shell. Instead, and even without leading scorer David Villa (leg injury), they continued to carry the attack and were far more dangerous than Germany the rest of the way.
Indeed, Lehmann, who helped the Germans to third place in the 2006 World Cup, kept it close with several tough saves.
This was the last game for 69-year-old Aragones, the oldest coach to win the Euros. Germany’s Joachim Loew has a contract through the 2010 World Cup, but will need to find the spark Germany showed only periodically in Austria and Switzerland.
“Spain played very well during the whole tournament. and they were technically excellent,” Loew said. “They fully deserve victory.”
A crowd of about 68,000 packed Vienna’s downtown fan zone to watch the final, police said. In Germany, flags fluttered from balconies and car antennas across the country. In Berlin, an estimated 400,000 fans watched the game on large outdoor screens.
Spain has never made a World Cup final and was in one other Euros final, aside from the 1964 triumph. That was a loss to France in 1984.
Otherwise, there had been nothing but disappointment and early exits from big tournaments. Two years ago, the Spaniards were dynamic in the opening round in Germany, then fizzled against France. With two of the world’s top clubs, Real Madrid and FC Barcelona, the nation has tons of talent. What it has lacked is fortitude.
No one can say that anymore.

TITLE: Kazakh Model ‘Killed Herself’
PUBLISHER: Reuters
TEXT: NEW YORK — A 20-year-old woman identified by local media as Kazakh supermodel Ruslana Korshunova plunged to her death from a Manhattan apartment on Saturday in an apparent suicide.
Police said only that the woman was discovered dead in front of an apartment building in downtown Manhattan, near the financial district and the South Street Seaport tourist area.
Korshunova had graced the covers of European editions of Elle and Vogue and walked the catwalks for designers including Betsey Johnson and Jill Stuart.
Witnesses described seeing her plunge from a ninth-floor balcony in the building on Saturday afternoon.
Local media, citing police sources, said there was no sign of a struggle inside her apartment and that Korshunova was believed to have leaped to her death. A friend told The New York Post, however, that Korshunova had just returned from a modeling job in Paris and seemed “on top of the world.”
“There were no signs,” the unidentified friend was quoted as saying. “I don’t see one reason why she would do that.”
Korshunova, a native of Kazakhstan, had been profiled in British Vogue in recent years.

TITLE: Torres Tops Goal-Heavy Tournament
AUTHOR: By Mike Collett
PUBLISHER: Reuters
TEXT: VIENNA — Fernando Torres’ goal that gave Spain a 1-0 victory over Germany on Sunday not only decided the Euro 2008 final but was also one of the best in the tournament.
His 33rd minute strike, clipped home from an acute angle after he muscled past Philipp Lahm, was the 77th and final goal to join those that were brilliantly volleyed, headed and fired home — or even tapped in after bouncing out of a puddle.
Spain went into the final having already scored 11 goals, more than any other team in the tournament, with forward David Villa, who missed the final because of injury, finishing as the competition’s top scorer with four.
The best of his strikes was the second of a hat trick against Russia in a 4-1 win in Spain’s opening match.
Villa began the move when he retrieved a loose ball deep in his own half and began a quick counter attack. Joan Capdevila and Andres Iniesta then combined before Iniesta found Villa who sprinted into the box and shot past keeper Igor Akinfeyev.
Germany scored some stunning goals on their way to the final but Bastian Schweinsteiger’s strike against Portugal in their quarterfinal was outstanding.
Lukas Podolski and Michael Ballack exchanged passes on the left to escape the Portuguese midfield and, after sprinting down the wing, Podolski’s low hard cross was rammed home first time by Schweinsteiger at the near post.
Ballack scored a blistering goal from a free kick against Austria while teammate Philipp Lahm’s winner against Turkey in the semi-final was another superb strike.
Just four minutes after being exposed for Turkey’s 86th minute equalizer, Lahm latched on to a Thomas Hitzlsperger pass that freed him on the left and he curled the ball past the advancing Rustu Recber to seal Germany’s place in the final.
Although Turkey lost to the Germans, they had a thrilling journey to the last four, sealing their place in the knockout stages with a remarkable 3-2 win over Czech Republic after trailing 2-0 with only 15 minutes remaining.
Nihat Kahveci’s second goal was remarkable. Released by an angled pass from Hamit Altintop, Nihat beat the offside trap, steadied himself, and then curled the ball over Petr Cech and into the net off the underside of the bar for the winner.
The Dutch, who lost in the quarterfinals, bagged 10 goals, with Wesley Sneijder scoring two of the best in the tournament.
His first came in a 3-0 win over world champions Italy after an unstoppable breakaway began with Giovanni van Bronckhorst clearing off his own goal line after an Italian corner.
He then galloped 60 metres upfield before hitting a wonderful cross-field pass to Dirk Kuyt and he found Sneijder, who poked the ball past keeper Gianluigi Buffon to score.
Sneijder’s late long-range strike against France was another stunner and came minutes after Arjen Robben’s angled third for the Dutch.