SOURCE: The St. Petersburg Times
DATE: Issue #1439 (1), Tuesday, January 13, 2009
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TITLE: Ruble Hits Six-Year Low Against The Dollar
AUTHOR: By Emma O’Brien
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s ruble slid to the weakest level in almost six years on Monday against the dollar after the central bank devalued the currency for a second day as declining oil prices threaten to deepen the country’s economic crisis.
The ruble fell 1.7 percent to 31.0533 per dollar by 2:03 p.m. in Moscow, from 30.5312 Sunday, extending its decline to 24 percent since August. The range the ruble is allowed to trade against a basket of dollars and euros was widened, a central bank official who declined to be identified on bank policy said by telephone Monday. Official ruble trading began Sunday for the first time this year.
“After the long holiday the central bank’s come back intent on showing they’re still on a devaluation path,” said Ulrich Leuchtmann, head of currency strategy at Commerzbank AG in Frankfurt, which rates itself one of the top 10 traders of the ruble in the world. “With the oil price shock there is an increased burden on Russia’s current account and that necessitates a rebalancing of the currency.”
Bank Rossii devalued the currency for the 14th time since Nov. 11 as Urals crude, Russia’s main export blend, slid to $42.99 a barrel, below the $70 average required to balance this year’s budget, and the halt in gas supplies to Europe damped the outlook for export earnings. The ruble may retreat 10 percent against the basket this month as companies buy foreign currency to repay more than $80 billion of debt this year, according to Societe Generale SA, France’s second-largest bank.
The currency weakened 1.5 percent to 35.8185 versus the central bank’s target basket, which is made up of about 55 percent dollars and the rest euros. Policy makers devalued the ruble against the basket by 1.5 percent Sunday.
Russia, the world’s largest energy exporter, has drained $160 billion, or 27 percent, of its foreign-currency reserves since the start of August as the central bank sought to mitigate the currency’s slide. Investors have withdrawn more than $200 billion from Russia since then, according to BNP Paribas SA, amid the global credit-market crisis and Russia’s war with neighboring Georgia. Urals slumped 54 percent last year, a record drop.
The dispute between Russia and Ukraine over natural gas, which resulted in at least 20 European countries experiencing supply disruptions, is further deterring investors, said Kieran Curtis, a fund manager in London at Aviva Investors Ltd., which holds Russian 30-year government bonds among its $787 million in emerging market holdings.
Russia halted transit shipments through Ukraine on Jan. 7 after accusing Ukraine of siphoning gas amid a dispute over pricing. Ukraine signed a deal Monday on monitoring gas flows from Russia, an agreement which will pave the way for the resumption of gas shipments, Gazprom, Russia’s gas exporter, said.
“The long-term story for investors is negative on Russia,” he said. “Stopping the flow is going to make all of their customers look elsewhere for at least part of their gas.”
Ukraine’s hryvnia declined against the dollar, according to UniCredit SpA currency traders in Vienna.
Russia is experiencing its worst economic crisis since defaulting on $40 billion of debt in 1998, after credit markets froze and the U.S. and Europe slide into recession. Standard & Poor’s cut the country’s credit rating last month amid concern about the depletion of reserves and the government has pledged a more than $200 billion rescue package.
Industrial output sank the most in 10 years in November and unemployment rose to 6.6 percent. An index of Russian service industries plummeted to a record low last month as consumers curbed spending, VTB Bank Europe said last Tuesday.
The government’s 30-year 7.5 percent dollar bonds declined, pushing the yield 10 basis points higher to 9.19 percent.
The cost of protecting Russian government debt from default rose 10 basis points to 660 points on Monday, according to CMA Datavision in London. Credit-default swaps protect bondholders against default by paying the buyer face value in exchange for the underlying securities or cash equivalent should the borrower fail to adhere to debt agreements. The contracts traded at a record 1,233 on Oct. 24.
A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year. An increase indicates deterioration in the perception of credit quality; a decline signals the opposite.
The ruble traded at 41.6245 per euro, according to Bloomberg data, down 1.2 percent from 41.1317 Sunday, based on figures from the Micex stock exchange. The currency fell to as low as 31.1385 per dollar on Monday, the weakest since April 2003, according to Bloomberg data.
Russia’s currency may lose 11 percent against the basket in the first quarter, according to Citigroup Inc. Danske Bank in Copenhagen sees a 15 percent drop in the ruble by the end of the year, and Commerzbank forecasts a 6 percent decline, Leuchtmann said.
Non-deliverable forwards put the ruble 7.4 percent lower against the dollar at 33.55 in three months time. NDFs are contracts used to fix a currency at a particular level at a future date and companies use them to protect against foreign-exchange fluctuations.
“I’d be surprised if another 20 percent didn’t bring the ruble to where it needs to be,” said Curtis at Aviva Investors.
The declining oil price looks set to continue the current pace of devaluation, Arkady Dvorkovich, economic adviser to President Dmitry Medvedev, said in a Dec. 19 interview. Prime Minister Vladimir Putin has pledged to support the ruble to avoid sudden swings.
“One percent steps are not ideal because the central bank still needs to spend a lot of money to keep the ruble where it is now,” said Beat Siegenthaler, head of emerging markets strategy in London at TD Securities Ltd., which predicts the ruble will be allowed to fall as much as 15 percent in the first quarter. “A lot of people in the market would hope for a sharper devaluation but it seems the central bank is not willing to do that.”
Bank Rossii sold $3.4 billion Sunday to prevent the ruble weakening further, according to estimates by Moscow’s MDM Bank.
TITLE: Stalled Gas Agreement Given Second Wind
AUTHOR: By Dmitry Zhdannikov and Pete Harrison
PUBLISHER: Reuters
TEXT: MOSCOW/BRUSSELS — Russia and Ukraine signed a deal Monday for a second time to help secure the resumption of Russian gas supplies to Europe, cut off for nearly a week in freezing temperatures.
Earlier Monday Ukraine removed additions it had made to the deal struck over the weekend to resolve the latest row holding up the deployment of monitors to check Russian gas flowing across Ukraine to Europe.
Russia has accused Ukraine of siphoning off gas to make up for losses it has suffered since Moscow turned off the tap on January 1 in a dispute over gas prices. Ukraine denies the charge.
“The document has been finally signed,” Alexander Medvedev, the deputy chief executive of Russia’s state gas export monopoly Gazprom, said.
He told a news conference in Brussels that supplies should be restarted at 7 a.m. British time Tuesday “if there are no obstacles.”
Gazprom and Ukraine have said it will take at least 36 hours before gas reaches the borders of the European Union after flows resume.
The dispute has highlighted the 27-nation bloc’s dependence on Russian gas.
“The crisis must encourage member states to make energy security a bigger priority than it has been so far,” Czech Industry and Trade Minister Martin Riman said in a telephone interview.
He said the EU must accelerate talks on finding alternative energy sources, building gas pipelines and cementing cooperation to avoid being caught up in such supply disruptions.
“This crisis should be an encouragement, a kick for us all to start working faster and seriously on the projects,” he said.
The gas row is yet another power-play between the neighbors, whose relations have been strained since Ukraine elected pro-Western leaders after the “Orange revolution” in 2004 and tried to shrug off Russia’s influence.
Ukraine, which wants to join the NATO military alliance and the EU, has yet to resolve a dispute with Russia over its gas supplies and was defiant that it would not be bullied.
“I think the 12 days (that Ukraine has been without gas) shows that Ukraine has prepared itself for all eventualities seriously. Ukraine held out and can hold out much more,” Andriy Goncharuk, the president’s foreign policy adviser, told a news briefing.
The EU, which backed Ukraine in a similar dispute in 2006, has tried to steer a neutral course between the two, and helped broker the deal over the weekend to allow monitors on Ukrainian territory.
But some EU diplomats have criticized both for holding the Union, which gets a fifth of all its gas supplies from pipelines that run from Russia across Ukraine, to ransom.
“It is unbearable that Russia and Ukraine carry out their conflict in the middle of a grim cold winter on Europe’s back,” German economics secretary, Peter Hintze, said in Brussels.
“We need a mechanism so we can act faster in future crises.”
Eastern Europe has been badly hit by the gas shutdown, with several countries forced to look to alternative means of power or to use their reserves.
Bulgaria said it would ask the European Union to provide some 400 million euros in aid to help ease its dependence on Russia, its sole gas supplier, by expanding storage and building pipeline links to Greece and Romania.
Bulgaria, like Slovakia, said it might be forced to restart a nuclear power reactor to produce enough electricity.
Slovakia, which declared a state of emergency last week after the cut-off, said it was on the brink of a power blackout after a fire forced the partial shutdown of a coal power plant, news agency SITA reported.
TITLE: Protests by Car Owners Over Tariffs Given a Political Twist
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Two local political activists were detained on Thursday as car-tariff protests continued into 2009. The latest demonstrations featured opposition groups and an increased amount of political criticism compared to similar protests held late last year.
Thursday’s event was organized by TIGR, a newly formed movement whose name is the Russian acronym for the Association of Active Citizens of Russia but also refers to the Amur tiger, a symbol of Russia’s Far East where a mass car-tariff protest was brutally thwarted in December.
The rally, held in protest at newly imposed tariffs on imported cars, also addressed police brutality, corruption, recent amendments to the Constitution that have prolonged presidential and the State Duma terms, and censorship.
“We were not heard [by the authorities],” said Alexander Rastorguyev, a TIGR activist and the rally’s organizer, by phone on Monday.
“We grew out of the protest movement of car-owners, but gradually moved on from car-tariffs to more global things; we’re discussing more general questions that deal with the building of civil society on our Internet forum.”
Local car owners had previously held protests on Nov. 22, Dec. 14 and Dec. 21.
Although slogans were primarily directed at a government decree raising import tariffs on second-hand foreign cars, many speakers, including local Yabloko leader Maxim Reznik and Olga Kurnosova of Garry Kasparov’s United Civil Front (OGF) and the recently formed democratic movement Solidarity, demanded the restoration of democratic freedoms in Russia which have shrunk under Vladimir Putin’s rule as president and now prime minister.
“I invited the OGF, Yabloko and Solidarity,” Rastorguyev said. “I even invited [the Kremlin-backed party] United Russia. They even added themselves to the list of speakers, but after hearing popular indignation, they declined to speak.”
Issued on Dec. 10, the decree, which was introduced to support Russian car manufactures, comes into effect on Tuesday.
But protesters say the measure both undermines the economy of Russia’s Far East, which is largely based on Japanese car exports, and targets consumers who wish to buy foreign used cars — generally considered to be less expensive and more reliable than Russian cars.
Rallies also planned for Moscow and Vladivostok on Thursday were banned outright, while authorities in St. Petersburg banned an automobile procession on Nevsky Prospekt in the city center and posted a massive police presence in front of the Peterburgsky Sports and Concert Complex (SKK) where the rally was held.
An estimated 60 protesters were outnumbered by the police, who had five heavy OMON special-task police force trucks parked on the site, as well as two city buses that the police use to hold detained activists. Police also encircled the site with tape, preventing protesters’ cars from getting close to the location of the rally.
Rastorguyev said he had appealed the ban on the procession of cars to the General Prosecutor’s Office and was preparing a lawsuit against City Hall.
“They banned it for some unclear reasons, claiming that Nevsky Prospekt would be packed with cars on Jan. 8. I tried to persuade them that people would be on holiday and there would not be any traffic at all on Jan. 8,” he said.
At the start of the rally, activist Vladislav Ivakhnik was detained for unfolding a black hammer-and-sickle flag of Eduard Limonov’s banned National Bolshevik Party — even though a local court ruled twice last year that the flag does not contain Nazi symbolism as police had claimed.
OGF’s Olga Kurnosova, who protested Ivakhnik’s detention by reportedly chanting “Down with the Police State!” was detained after the rally had finished.
“We stupidly decided to have a cup of tea, and when we turned around the corner of the Sports Complex, the patrol cars rushed after us, and that’s where it happened,” she said by phone on Monday.
The police claimed Kurnosova violated the rules of holding a mass event by starting to speak before the meeting’s official beginning, she said, adding that in reality no speeches were made until at least 1.20 p.m., twenty minutes after the rally’s official start time at 1 p.m. She has also been charged with refusing to follow a policeman’s orders. Kurnosova’s case will be heard in court on Jan. 26.
TITLE: Bulgaria Seeks EU Aid To Ease Gas Dependence
PUBLISHER: Reuters
TEXT: SOFIA — Bulgaria was due to ask the European Union on Monday to provide some 400 million euros ($535.7 million) in aid to help the Balkan country ease its dependence on its sole gas supplier, Russia, the economy ministry said.
Bulgaria wants to expand its sole gas storage facility and build pipeline links to neighboring Greece and Romania quickly after a cut-off in Russian gas supplies left tens of thousands of homes without heating and forced some factories to shut down.
Economy and Energy Minister Petar Dimitrov was due to raise the Balkan country’s request for financial help at Monday’s meeting of the EU energy ministers in Brussels, the ministry said in a statement.
Former communist eastern Europe has so far done little to reduce reliance on its former Soviet master, Russia, and on single supply routes. Some, like Serbia and Bosnia, not only depend fully on Russia, but have no gas reserves either.
As a result, countries in the region are the worst hit in the Moscow-Kiev gas price dispute which has cut flows to Europe.
The disruption is exacerbated by a lack of pipeline links between countries in eastern Europe, outdated Soviet-era grid infrastructure, transmission losses and high energy intensity.
Prime Minister Sergei Stanishev told parliament Bulgaria needed 125 million euros in EU aid to quickly build a 115-kilometer stretch to an existing Turkey-Greece pipeline that would allow it to eventually import an agreed 1 billion cubic meters of Azeri gas a year.
Bulgaria also wants to build four separate stretches in the north to link its network with that of Romania, he said.
The projects are part of a plan by eight central and southeast European countries to link their pipeline networks, first announced last year and still on the drawing board.
Bulgaria also seeks 250 million euros to complete the expansion of its sole gas storage facility of Chiren and be able to draw over 10 million cubic meters a day from a maximum of 4.3 million now, Stanishev said.
The country is currently meeting about a third of its daily needs of about 12 mcm with gas from Chiren. The storage flow will start declining at the end of this week, the state gas transmission company Bulgartransgaz has said.
The state gas monopoly has put total reserves at Chiren at about 570 million cubic meters of gas.
TITLE: In Brief
TEXT: Politkovskaya Trial
MOSCOW (SPT) — The Moscow District Military Court on Sunday postponed the Anna Politkovskaya murder trial after one of the defendant’s lawyers failed to appear, RIA-Novosti reported.
The court was planning to hear testimony Sunday from defendant Ibragim Makhmudov, one of three men charged with participating in Politkovskaya’s murder in October 2006.
Makhmudov’s lawyer, Saidakhmet Arsamirzayev, was working on another case in Petrozavodsk and was unable to attend the hearing. The trial is to resume Jan. 19, RIA-Novosti reported.
Makhmudov’s brother, Dzhabrail Makhmudov, is also charged in Politkovskaya’s murder, along with former Moscow police officer Sergei Khadzhikurbanov.
TITLE: New Year's Celebrations Cause Spike in Casualties
PUBLISHER: The St. Petersburg Times
TEXT: The New Year’s holiday in St. Petersburg was blighted by injuries and illness, news media have reported.
About 200 people made emergency calls for ambulances to deal with injuries resulting from slipping on ice while 155 people were hospitalized with cold-weather related problems. Nineteen of these cases involved frostbite, Interfax reported.
On New Year’s Eve, 22 St. Petersburgers were injured by fireworks, with 11 adults and two children being hospitalized. On Jan. 8 a 41-year-old woman was hospitalized with burns to the head, neck and face caused by a firework. On Saturday an 11-year-old boy was burnt on his face, ears, neck and fingers by fireworks.
In Moscow, 26 people died in fires during the same period, the Emergency Situations Ministry said Sunday.
The holidays saw an increase in fires in the capital, many of them caused by drunken residents smoking in bed. On New Year’s Eve, firemen were called to 697 fires in Moscow, 442 of them in apartments, the ministry said, RIA-Novosti reported.
There was however a drop in the number of Muscovites who sought medical assistance for injuries linked to fireworks. From Dec. 31 to Jan. 10, 34 Muscovites, including six children, were taken to hospitals with burns from fireworks, the ministry said.
That figure is down from 65 during the same period last year, RIA-Novosti reported.
On Sunday a drunk electrician started a fire at Moscow’s Tretyakov Gallery after he fell asleep while smoking a cigarette, a police source told RIA-Novosti.
The blaze started in an engineering building next to the main gallery Saturday and damaged technical equipment but not any of the museum’s valuable art works.
A police source told RIA-Novosti that a 49-year-old workman had caused the fire, but a spokeswoman for the Moscow museum said it was too early to say what started the blaze.
“According to preliminary reports, the man fell asleep with a lit cigarette when he was drunk,” RIA-Novosti quoted the source as saying.
“He is now in a hospital intensive care unit and it is not yet possible to take a testimony on the accident.”
TITLE: McDonald's Bomber Convicted
PUBLISHER: The St. Petersburg Times
TEXT: A city court on Monday convicted a man on terrorism charges for bombing a McDonald’s restaurant on Nevksy Prospekt in central St. Petersburg in February 2007, and also found him guilty of detonating a similar device in a flower kiosk earlier in the same month.
Fyodor Kovalchuk was sentenced to 15 years in a high security prison.
A second man, Yevgeny Skvortsov, was found guilty in the flower kiosk attack and of storing explosives. Skvortsov was given a seven-year suspended sentence, Interfax reported.
Another person involved in the case, who is a teenager and who was earlier found guilty in the flower kiosk case and for storing explosives, was sentenced to six years' imprisonment.
The Feb. 18, 2007 bombing at the McDonald’s restaurant injured 10 people when a homemade device containing 100 grams of explosives was detonated under a table. The Feb. 4, 2007 attack on the flower kiosk injured the saleswoman working there.
Prosecutors tried the flower kiosk attack on charges of hooliganism and the McDonald’s attack on terrorism charges.
Lawyers for the convicted men said they would appeal.
Sergei Kapitonov, a representative of the St. Petersburg Investigation Board, said the crimes were solved after an agent infiltrated the criminal group.
“The investigation helped to prevent two other terrorist acts planned by the group: an explosion at Dom Kino and in a minibus with military students on board,” Kapitonov said.
TITLE: President's Envoy Kosopkin Killed in Helicopter Crash
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — The Kremlin’s envoy to the State Duma, Alexander Kosopkin, and six other people died when their helicopter crashed during a hunting trip in the Altai region, officials said Sunday.
Rescuers located the Mi-171 helicopter on Sunday afternoon, two days after it crashed. Four injured survivors were rushed to the hospital.
One of the survivors, senior Altai official Anatoly Bannykh, said the helicopter’s engine had failed.
“After that, the pilots lost control and the craft fell to the ground,” Bannykh said, RIA-Novosti reported. He escaped with minor injuries.
The helicopter took off with eight passengers and three crew members from the Altai regional town of Biisk at 8:30 a.m. Friday and failed to contact dispatchers as planned at 2 p.m. when it was scheduled to land in the village of Kosh-Agach, 500 kilometers away, Altai government spokeswoman Yelena Kobzoyeva said.
Half an hour later, the first search plane was sent to look for the helicopter, she said.
The wreckage of the white-and-blue helicopter was located at 3:35 p.m. Sunday in snowy mountainous terrain, RIA-Novosti reported.
Twelve planes and 227 people combed Altai during the two-day search for the helicopter, Emergency Situations Ministry spokeswoman Veronika Smolskaya said.
Investigators have opened a criminal case to check whether safety violations had caused the crash, the Investigative Committee said on its web site.
Kosopkin, 51, had served as the presidential envoy to the Duma since 2004 and in the presidential administration since 1994, the Kremlin said on its web site.
Duma Speaker Boris Gryzlov expressed his condolences to Kosopkin’s widow and two children. “For many of us, he was a personal friend,” Gryzlov said, Interfax reported.
Also killed were Sergei Livishin, a senior member of the presidential staff; Viktor Kaymin, a senior Altai environmental official; Gorno-Altaisk aircraft division head Vladimir Podoprigora; Vasily Vyalkov, the frontman of the regional band Armanka; and helicopter pilots Alexei Bayandin and Alexander Vertei, officials said.
Two passengers were seriously injured — Nikolai Kopranov, an adviser to the Duma’s Economic Policy Committee, and Boris Belinsky, a Moscow entrepreneur, Smolskaya said.
Bannyh and the third pilot, Maxim Kolbin, were “in satisfactory condition,” she said. The survivors were hospitalized in the regional capital Barnaul, Smolskaya said.
The purpose for the flight was a hunting trip, Kobzoyeva said.
Helicopter crashes have claimed the lives of several notable people in recent years. In 2002, a Mi-8 crash killed Krasnoyarsk Governor Alexander Lebed and seven other people. In 2000, world-famous eye surgeon Svyatoslav Fyodorov died in a Mi-8 crash.
TITLE: Billionaire's Bid for Brit Paper Rejected
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Billionaire businessman Alexander Lebedev made an unsuccessful bid to buy the London newspaper Evening Standard, media reported.
Lebedev, a former intelligence officer who dabbles in liberal politics, offered to purchase the newspaper from Daily Mail & General Trust for an undisclosed sum, the Financial Times reported Friday, citing an unidentified banker who has worked with the company.
The company rejected the bid as it is “very sensitive when it comes to newspapers, and there is no way they are going to get into bed with a Russian oligarch,” the FT cited the banker as saying.
Lebedev, a former State Duma deputy who owns a blocking stake in Aeroflot, is no stranger to the newspaper business. He currently owns 39 percent of the liberal Novaya Gazeta, a publication highly critical of the country’s ruling elite that employed slain investigative journalist Anna Politkovskaya.
Last year, Forbes magazine estimated Lebedev’s wealth at $3.1 billion.
TITLE: Saakashvili Puts Hopes in New U.S. Deal
PUBLISHER: The Associated Press
TEXT: MOSCOW — Georgian President Mikheil Saakashvili hopes a new cooperation agreement with the United States will help the former Soviet nation integrate more quickly with the West.
Speaking in Tbilisi on Saturday, Saakashvili said the “charter on strategic partnership” reflects strong U.S. support for Georgia, which waged an August war with Russia.
Saakashvili told a briefing that the agreement would help strengthen Georgia’s ties with the West. The new U.S. blueprint for cooperation with Georgia was signed in Washington on Friday.
The document, which U.S. Secretary of State Condoleezza Rice signed Friday, is bound to antagonize Moscow but provides no guarantees that President-elect Barack Obama will continue to support Georgia with the same enthusiasm as the Bush administration when he takes office on Jan. 20.
The broad outline of U.S. cooperation is also unlikely to move the European countries that have blocked Georgia’s path to NATO membership, in part over concerns of alienating Moscow.
Last year, Russia’s military pushed within artillery range of Georgia’s capital Tbilisi after Georgia sought to reclaim a Russian backed breakaway region. Peter Van Praagh, an analyst with the German Marshall Fund in Washington, said the war demonstrated that the West would not come to Georgia’s aid militarily.
“That is as true today as before they signed this, and it is important for Georgian leadership to remember as they convey this,” he said.
The document outlines broad areas of economic, security and cultural cooperation as well as political reforms that Georgia should undertake with U.S. help. It emphasizes long-held U.S. support for Georgian territorial integrity — which means opposition to Russia’s recognition of two breakaway Georgian territories: Abkhazia and South Ossetia.
Obama has expressed support for Georgian territorial integrity and its NATO aspirations. But he is already facing calls from Europe and elsewhere to improve relations with Moscow.
In an interview, Georgian Foreign Minister Grigol Vashadze said he believed that the current administration consulted the incoming Obama administration on the document, but he was not certain.
“The previous administration is not going to do anything without consulting the new one,” he said.
U.S. Deputy Assistant Secretary of State Matthew Bryza would not specify who had been consulted on Obama’s team. “We are consulting with everybody,” he said when asked about conversations with the incoming administration.
Ahead of the signing, U.S. and Georgian officials said the document points to a new path toward NATO membership through a NATO-Georgia commission. The document also outlines U.S. help in strengthening Georgia’s military and bringing it up to NATO standards.
TITLE: NATO Sees Thaw In Dealings With Russia
PUBLISHER: Reuters
TEXT: WASHINGTON — NATO’s top operational commander said he is optimistic that military relations with Moscow will soon begin to thaw after being frozen for months over Russia’s brief war with Georgia.
NATO Supreme Allied Commander in Europe John Craddock said Friday that he wants to resume exercises, exchanges and other cooperation that ceased in the international rift between Russia and the West that followed Moscow’s war with Georgia in August.
“It’s essential we continue to engage,” said Craddock, a U.S. Army general who also commands U.S. forces in Europe.
NATO Secretary-General Jaap de Hoop Scheffer met recently with Russia’s ambassador to NATO, Dmitry Rogozin, in the first high-level contacts between NATO and Moscow since August.
“We may see some thaw in that relationship,” Craddock told reporters. “And then we can then revisit these opportunities that we had,” Craddock said.
Craddock said he has proposed low-level exercises between the U.S. and Russian navies in the Mediterranean Sea but has had no response from the Russians so far.
TITLE: Human Rights Chief Seeks Probe Into Gaza
PUBLISHER: Combined Reports
TEXT: MOSCOW — The top UN human rights official called for independent investigations into possible war crimes committed by Israeli forces in the Gaza Strip during a special session held Friday at the request of Russia and several other countries.
But Israeli forces stepped up its offensive Sunday, edging into the Gaza Strip’s most populous area and killing at least 27 Palestinians.
Israeli troops and tanks pushed into the Gaza Strip on Dec. 27 in an offensive against Hamas that has killed 869 Palestinians, many of them civilians, Gaza medical officials said.
UN High Commissioner for Human Rights Navi Pillay on Friday called for Israel to be held accountable for any violations of international law.
Scores of people, including children, had been killed or wounded in “Israel’s totally unacceptable strikes” against clearly marked UN facilities sheltering Gaza civilians, Pillay said in a speech to the special session of the UN Human Rights Council. Harm to civilians caused by rockets fired from the Gaza Strip into southern Israel was also “unacceptable.”
Aharon Leshno-Yaar, Israel’s ambassador in Geneva, said the Jewish state’s offensive was directed at Hamas targets engaged in launching rockets into southern Israel and not at Palestinian civilians.
The United Nations session, called by Islamic and developing countries backed by Russia, China and Cuba, which enjoy a majority in the 47-member forum, was expected to adopt a resolution censuring Israel when the talks end Monday.
The session came days after President Dmitry Medvedev told Israeli Prime Minister Ehud Olmert that Russia was seriously concerned about civilian casualties from the operation in Gaza.
“The Russian side expressed its serious concern over the numerous victims among the civilian population and the grave humanitarian situation,” the Kremlin said in a statement describing a telephone conversation between the two men earlier in the week.
Medvedev also discussed the Gaza situation with Palestinian President Mahmoud Abbas last week, and both leaders stressed the need for an immediate cease-fire, RIA-Novosti reported.
Abbas thanked Medvedev for humanitarian aid sent by Russia, and the Russian president promised to send more. Earlier in the week, Russia sent 60 tons of humanitarian aid, including food, medicine, bedding and tents.
Alexander Saltanov, a deputy foreign minister and Medvedev’s special envoy for the Middle East, flew to the region last week and has met several times with Israeli Foreign Minister Tzipi Livni to press for a cease-fire.
Olmert told his Cabinet in Jerusalem on Sunday that Israel was “getting close to achieving the goals it set for itself.”
Russian diplomats, meanwhile, evacuated the last 21 Russian nationals from the Gaza Strip on Thursday.
“The evacuation is over,” said Anastasia Fyodorova, a spokeswoman for the Russian Embassy in Israel, news agencies reported. Fyodorova said 47 Ukrainians were also evacuated.
(SPT, Reuters)
TITLE: In Brief
TEXT: Suspected Militants Hit
MOSCOW (AP) — Four suspected militants were killed in a clash with security forces in Ingushetia, Interior Ministry officials said Sunday.
The fighters were hiding in a house in the village of Ordzhonikidzevskaya, the officials said. One civilian and three policemen were wounded in the fighting Sunday.
The ethnic Chechen gunmen were wanted on criminal charges in Ingushetia and Chechnya, the ministry said.
Ex-Mayor Dead
MOSCOW (SPT) — Kazbek Pagiyev, formerly the mayor of North Ossetia’s capital, Vladikavkaz, was shot dead near his home in the southern republic, Kommersant newspaper reported Sunday.
Pagiyev, who resigned as deputy prime minister of the breakaway Georgian republic of South Ossetia in December, was killed on Dec. 31 by two unidentified gunmen while he was sitting in his car. Pagiyev’s driver was also killed in the attack.
Investigators believe that Pagiyev’s murder is linked to the assassination of Vladikavkaz Mayor Vitaly Karayev a month earlier.
Five people have been arrested in connection with Karayev’s Nov. 26 slaying, though the suspected killer remains at large.
General Killed
MOSCOW (SPT, Bloomberg) — A senior Interior Ministry official was shot dead in Dagestan in an attack for which a radical Islamic group in the southern republic claimed responsibility.
Valery Lipinsky, first deputy head of the Interior Ministry troops in the North Caucasus, was shot dead in the Dagestani capital, Makhachkala, on Dec. 29, the ministry said on its web site. He was 52.
A radical Islamic group in Dagestan, Jamaat Sharia, claimed responsibility for Lipinsky’s murder, according to a statement attributed to the group and posted on the Chechen rebel web site of Kavkaz Center on Jan. 5.
Dagestani officials claim to have wiped out Jamaat Sharia, a group notorious for deadly attacks against policemen in the republic, after killing its leader, Rasul Makasharipov, in 2005.
Chechens Backed
MOSCOW (SPT) — The European Court of Human Rights has ordered Russia to pay a record 680,000 euros ($910,000) to the families of 10 Chechens detained by the military who were subsequently killed or went missing during the 2000-2002 military campaign in the republic, Interfax reported Sunday.
The Strasbourg-based court said in the ruling that Russian officials had failed to present proper justification for the military’s decision to resort to deadly violence against the Chechen detainees.
The government was also ordered to pay 41,000 euros to cover the court expenses, Interfax said.
Aleksanyan Out on Bail
MOSCOW (SPT) — Former Yukos executive Vasily Aleksanyan, who is suffering from lymphatic cancer, tuberculosis and AIDS, has been released from custody after posting bail of 50 million rubles ($1.78 million), Kommersant reported.
Aleksanyan, who has been charged with embezzlement and tax evasion, posted the bail on Dec. 30, after which guards outside his local hospital room were removed from duty, Aleksanyan’s lawyer, Yelena Lvova, told Kommersant.
On Dec. 22, the European Court of Human Rights ruled that Russia had violated Aleksanyan’s rights by failing to provide “relevant and sufficient reasons” to justify his detention in custody.
The court also called for “other reasonable and less-stringent” measures of restraint, saying Aleksanyan’s continuing pretrial detention has “lost any meaningful purpose.”
Blogger Appeals
MOSCOW (SPT) — A Komi blogger convicted of disseminating hate rhetoric in an Internet posting has filed a complaint with the European Court of Human Rights, RIA-Novosti reported Saturday.
Savva Terentyev, who received a one-year suspended sentence last year for suggesting on a blog that police officers be publicly burned “like in Auschwitz,” is demanding 3,500 euros ($4,700) in damages for what he calls violations of his rights during his trial, his attorney, Ernest Mezak, said.
Nationalist on Trial
MOSCOW (SPT) — Leading ultranationalist activist Alexander Belov went on trial Sunday in Moscow on charges of inciting ethnic hatred during a speech to supporters on the National Unity Day holiday in November.
Belov appeared in the Dorogomilovsky District Court on charges that he stoked ethnic hatred with the Nov. 4 speech, in which he reportedly drew negative parallels between the authorities and Jews and insulted natives of the Caucasus and Central Asia by calling them “hordes of occupants.”
Belov, whose real last name is Potkin, was to appear in court last month, but the hearing was postponed after he was attacked on the street and suffered a fractured skull, among other injuries.
TITLE: Dispute Helps Argument For Nord Stream
AUTHOR: By Anatoly Medetsky and Maria Antonova
PUBLISHER: Staff Writers
TEXT: MOSCOW — Russia’s reputation as a reliable gas supplier has been dealt a blow after 11 days of disruptions to European deliveries through Ukraine, but the dispute is giving new life to Prime Minister Vladimir Putin’s pet project to build an alternative pipeline under the Baltic Sea.
Russia’s worst gas conflict with Ukraine yet has halted all supplies to the European Union through Ukraine since Jan. 7. The dispute comes as Russia waits for some Baltic Sea countries to finally grant environmental permits to its Nord Stream pipeline.
Now that deliveries traveling via Ukraine have been stopped for at least five full days, cutting power to industry and homes in southeastern Europe, there promises to be new enthusiasm for Nord Stream, which will take gas directly from Russia to Germany, analysts said Sunday. Gas from Nord Stream could supply the entire EU if EU members build links among their gas systems.
Putin said Saturday that construction of Nord Stream, scheduled to come online in 2011, would be a guarantee against supply disruptions in the future.
“The current crisis confirms that there is a need for a true diversification of the ways to deliver our energy resources to the main consumers in Europe,” Putin said at a joint news conference with Czech Prime Minister Mirek Topolanek in Moscow.
Putin also suggested building the less-advanced South Stream across the Black Sea and southern Europe and moving ahead with plans to liquefy gas — or chill it into a liquid — to ship by tankers worldwide.
The desire to support Nord Stream and South Stream was a key reason why Russia cut supplies, said Pavel Salin, an analyst at the Center of Current Politics, a think tank.
Russia reduced supplies to Ukraine on Jan. 1 after it said Ukraine began stealing some of the gas destined for the EU. Moscow severed deliveries altogether after it said Kiev stopped transiting the gas, keeping it all for itself.
Nord Stream was not designed to replace any existing pipelines but was supposed to meet growing demand in the EU, said Irina Vasilyeva, a spokeswoman for Nord Stream AG, the company created to build the pipeline.
Russia has gone to great lengths to defend its position in the dispute, and EU reactions are more muted this time than in January 2006, when the West accused Moscow of using energy as a weapon by cutting off gas supplies through Ukraine.
In a sign that euphoria in Europe from Ukraine’s 2004 Orange Revolution is long gone, Kiev has drawn reprimands from the EU in the latest dispute. European Commission President Jose Manuel Barroso gave Ukraine a harsh warning last week that any failure to meet commitments to deliver Russian gas to the bloc would hurt its aspirations for closer EU ties.
“If Ukraine wants to be closer to the EU, it should not create any problems for gas to come to the EU,” Barroso told a news conference in Prague, where he was meeting Czech officials who hold the rotating presidency of the 27-nation EU.
Barroso stressed that he was not casting blame in the transit dispute.
Other European leaders have also avoided placing the blame on a specific country. “I have no ambition to sort out Russian-Ukrainian relations right now. It was not established as my goal,” Topolanek, whose country took over the EU presidency on Jan. 1, said Saturday at the news conference with Putin.
French President Nicholas Sarkozy called the dispute a “bilateral matter” at a joint news conference with German Chancellor Angela Merkel last week.
Hungarian Prime Minister Ferenc Gyurcsany said last week that it was unacceptable for “the bullets that Ukraine and Russia shoot at each other to hit Hungary,” IPS news agency reported.
The EU is likely to respond to the latest gas supply crisis by building more underground storage facilities and linking up member states’ pipelines to provide for greater mutual assistance for emergencies, said Pavel Baev, a professor at Norway’s International Peace Research Institute.
Even though Russia has generated negative publicity in the conflict, it is faring better than Ukraine in the informational war, said Dmitry Orlov, an analyst with the Agency of Political and Economic Communications.
“Ukraine missed every opportunity it could” and is now the bad guy in the eye of European consumers, he said.
He said Ukraine has failed to prove that it is not siphoning off gas, and with its leaders remaining mostly silent since the gas disruption on Jan. 1, it has given European consumers the impression that it has an unfair competitive advantage in gas purchasing price.
Ukraine was paying about half the amount that the EU pays for gas.
The shift in public opinion started after the gas dispute in 2006, when Russia failed to clearly explain its actions, leaving the impression that it was moving impulsively, Orlov said.
In a contrast, Putin held an extensive news conference with foreign reporters last week to explain Russia’s perspective.
Gazprom has created a special web site dedicated to the gas conflict, www.gazpromukrainefacts.com, and its executives have met with European partners in Brussels several times.
Interestingly, Putin, not President Dmitry Medvedev, has taken center stage in the conflict. Medvedev, who served as Gazprom’s chairman before becoming president last May, had a phone conversation with Yushchenko last Wednesday and discussed the issue with Gazprom CEO Alexei Miller in Sochi on Friday.
In sharp contrast, Putin has been actively and publicly involved in talks, occasionally broaching Russian foreign policy, an area traditionally reserved for the president.
“What we see right now is the dominant role of Putin,” said Nikolai Petrov, an analyst with the Carnegie Moscow Center. “We see him as a real head of state and its representative vis-a-vis the European Union and Ukraine.
“This is not surprising. We are still living in Putin’s Russia,” Petrov said.
TITLE: Local Landmarks Made Property of City
AUTHOR: By Natalya Chumarova
PUBLISHER: Vedomosti
TEXT: Another 153 objects of cultural importance have been transferred to the ownership of St. Petersburg, while the ownership of a further 114 has yet to be decided.
The city has gained ownership of buildings including the Mariinsky, Kamennoostrovsky, Anichkov and Yelagin palaces, the Mikhailovsky Castle, the Mariinsky Hospital, the architectural ensemble of the Strelka of Vasilievsky Island, the main building of the Smolny Institute, Oreshek fortress and the Pavlovsk and Gatchina palace-and-park ensembles, the governor’s press service announced, citing a decree signed by Prime Minister Vladimir Putin on Dec. 31, 2008.
One hundred and nineteen architectural ensembles have become federal property, including the Alexander Nevsky Monastary, the Hermitage, the Admiralty, the Tavrichesky Palace and the Summer Gardens. Numbers 1/3 and 2 on Ulitsa Zodchego Rossi and No. 41 on the Fontanka embankment have become the shared property of the city and state, said Igor Metelsky, chairman of the committee for the management of city property (KUGI).
After the State Duma passed amendments to the law on objects of cultural importance, the KUGI and the committee for the state control, use and protection of historical and cultural landmarks (KGIOP) drew up a list of 448 federal monuments that the local authorities were to receive under their control. Another 614 objects were to remain state property. In 2008, the lists were altered to include ensembles, which could comprise several objects.
The first 22 monuments were given to the city in May last year and included the Shuvalov Palace, the Mikhailovsky Theater, several fountains and the Moscow, Egyptian, Triumphal and Nikolaevsky Gates. The state received control of 56 ensembles. The control of a further 114 objects, including St. Isaac’s Cathedral, the Znamenka palace-and-park ensemble, Bolshoi Gostiny Dvor and Maly Gostiny Dvor, the Yusupov Palace and the Andreevsky market, is still a matter of dispute.
All significant objects bring revenues to the city, and these could be increased by using the buildings in complexes that would include the surrounding territory, for example for creating retail outlets in them, said Nikolai Kazansky, the director of investment consulting at Colliers International. And when property is managed by one center, the efficiency of its exploitation is increased, he added.
TITLE: City Hall Pulls Out of Skyscraper, Redirects Funds to New Stadium
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Russia’s gas giant Gazprom will complete the construction of its Okhta Center skyscraper in St. Petersburg, and City Hall will fund the construction of the new stadium for local soccer team Zenit.
The news of these financial changes was announced at the end of December, when Gazprom head Alexei Miller said that Gazprom would buy all the shares in Okhta Center from the city of St. Petersburg.
Miller said Gazprom would finance 100 percent of the construction project.
St. Petersburg Governor Valentina Matviyenko said that the cost of the shares would be settled soon, and that Gazprom would repay the city the funds it had invested into the project, news agency RBK reported.
Initially, Gazprom was to cover 51 percent of the project, while City Hall was to finance the remaining 49 percent. The property rights were to be split between the co-investors according to the volume of financing.
Under the previous plan, the St. Petersburg budget was to cover 29.4 billion rubles ($947 million) of expenses. The full financing of Okhta Center is estimated at 60 billion rubles ($1.9 billion).
The Okhta Center project includes the construction of buildings on a territory covering 66.8 hectares, where 4.6 hectares is allocated for the skyscraper. The 396-meter-high tower, which has provoked a number of debates in the city, is to be built on the Okhta river embankment by 2012. The complex itself is to be completed by 2016.
Experts say that the current financial crisis is, ironically, a good time for Gazprom to cut investment into the project.
“Today the construction expenses can be reduced by 15-20 percent,” said Artyom Tsogoyev, commercial director of Galaxy Group, MetalBuilding.ru reported.
Tsogoyev said that in the fall of 2008, the price of construction materials fell — by 50 percent for cement, 20 percent for metal and metal construction, and 5-10 percent for sand and other materials.
The city also clarified its position on the construction of another strategic object — the new stadium for St. Petersburg’s soccer club Zenit. City Hall will take full responsibility for its construction and Gazprom will leave the project.
Initially it was planned that Gazprom, which owns Zenit, would pay 51 percent of the project’s cost. The rest of the sum was to be provided by City Hall. However, after Gazprom declined to help further with the financing of the soccer stadium, the St. Petersburg administration decided to complete construction itself. It plans to spend the money originally allocated for the Okhta center on that purpose.
The stadium will be constructed by Transstroi engineering corporation, which is part of Oleg Deripaska’s Basic Element holding. The corporation won the tender at an auction in December, when it promised to lower the cost of the project by up to 30 percent.
TITLE: In Brief
TEXT: Ruble Could Fall 16%
MOSCOW (Bloomberg) — The ruble may weaken as much as 16 percent against the dollar this month as the central bank increases the pace of its devaluation to deter speculators, according to Renaissance Capital analyst Alexei Moiseev.
The currency may slide to as low as 37 per dollar by the beginning of February, said Moiseev, the Moscow-based investment bank’s head of fixed-income research.
Bank Rossii, the central bank, has allowed the ruble to slump against the dollar-euro basket used to manage its fluctuations since Nov. 11 as it devalues the currency amid declining oil prices.
Investment Budget Cut
MOSCOW (Bloomberg) — Russia’s government cut the national Investment Fund’s budget for 2009 by almost half, RIA Novosti reported, citing Deputy Prime Minister Dmitry Kozak.
The fund’s budget was cut to 64 billion rubles ($2.1 billion) from 113 billion rubles, the state-run news service said Monday.
RBC Rises on Ad Sales
MOSCOW (Bloomberg) — RBC Information Systems, the media company that owns the only Russian-language business television channel, rose in Moscow trading on a report that Video International Group agreed to sell adverts on RBC TV.
RBC rose as much as 17 percent, the biggest intraday gain since Dec. 26.
Video International’s VI Target unit this month began selling ads on RBC TV for food, personal-care, pharmaceuticals, video and other products, the Kommersant newspaper reported Monday, citing a letter sent by Video International to advertising agencies.
VTB in Olympic Loan
MOSCOW (Bloomberg) — VTB Group, Russia’s second-biggest bank, agreed to lend USK MOST as much as 10 billion rubles ($322 million) to build infrastructure for the 2014 Winter Olympic Games in Sochi.
The two-year credit line will finance the purchase of imported construction equipment used to build roads and rail links near the Black Sea resort city, VTB said in an e-mailed statement on Monday.
Kazakh Property Slump
ALMATY (Bloomberg) — Prices for new residential real estate in Kazakhstan, the biggest oil producer in central Asia, dropped 9 percent last year as the global financial crunch drove away speculative investments.
Prices decreased to 147,500 tenge ($1,219) per square meter last year from a record average high of 161,300 tenge in 2007, the Astana-based state statistics agency said last week on its web site. Prices for used residential property slumped 20.4 percent to 108,300 tenge per square meter from a year earlier, the agency said.
The growth of Kazakhstan’s $100 billion economy slowed to more than 3 percent last year from an average of 10 percent a year in 2000-2007 as the financial squeeze ended a construction boom. Kazakhstan plans to spend almost 20 percent of gross domestic product to support the economy.
Oil Export Tax Reviewed
MOSCOW (Bloomberg) — Russia may set its export duty on crude oil at $100 to $103 a metric ton from Feb. 1, Interfax reported Monday, citing Alexander Sakovich, the Finance Ministry’s deputy head of customs payments.
The current duty is $119.10, the Moscow-based news service said.
TITLE: Slovakia Determined to Reopen Nuclear Plant
PUBLISHER: Reuters
TEXT: BRUSSELS — The European Commission will listen to the arguments of Slovakia on the need to restart the country’s Bohunice nuclear power plant and then assess the situation, the European Union executive said on Monday.
Slovakia is seeking alternative energy sources after a dispute between Russia and Ukraine has cut the amount of gas supplies to Europe. Slovakia had agreed to close the Bohunice plant as part of its EU accession agreement.
“The (Energy) Commissioner (Andris Piebalgs) will hear the Slovak authorities’ explanation and in the light of the explanation ... he will assess the situation,” Commission spokesman Johannes Laitenberger said.
Bratislava declared a state of emergency Tuesday after the flow of Russian gas stopped, and the government said the 440-megawatt unit at the older nuclear power plant had to be put into operation again to maintain the stability of the entire electricity grid.
“We are aware that this is a violation of the accession agreement, but this is happening at a time of crisis,” Prime Minister Robert Fico said after the government made the decision at an extraordinary meeting.
“Damage from violation of the accession agreement is smaller than damage that would be caused by a collapse of the electricity system.”
Nikolaus Berlakovich, Austria’s environment minister, said it was “completely unacceptable” that Slovakia decided to restart the reactor and is urging Brussels to take action.
Fico said the unit should resume power production in less than six days and would remain in operation until Slovakia had guarantees of “absolute stability” in gas supplies.
Under the state of emergency, the gas firm SPP, run by GDF Suez and E.On, is reducing gas deliveries to large customers with annual consumption exceeding 60,000 cubic meters to a “safe minimum.”
It is maintaining full gas supplies to households, hospitals and schools from its reserves.
Gas-powered electricity generation is also affected by gas supply restrictions, which threaten the stability of the power grid, the Cabinet has said.
TITLE: Belarus Currency Devalued to Receive Loan
PUBLISHER: Reuters
TEXT: MINSK — Last week’s sharp devaluation of the Belarussian currency was a condition of a $2.5 billion IMF loan, President Alexander Lukashenko said Friday.
The devaluation has sent people rushing to buy goods before prices go up, and some say it could shake faith in the rule of Lukashenko, who had insulated the population from world market turbulence by keeping much of the economy in state hands.
In a measure of the scale of the world economic turmoil, even Belarus has felt the effects and has been forced to seek a $2.5 billion loan from the International Monetary Fund.
“There were two demands: not to raise salaries or pay in Belarussian rubles, because people will change them into dollars,” Lukashenko said.
“The second demand was that we devalue the [Belarussian] ruble by 20 percent.”
Freeing up the currency system, cutting social spending to balance budgets and imposing wage controls are common conditions set by the IMF for its loans to help rebalance ailing economies.
On Dec. 31, Minsk agreed to the IMF loan, and on New Year’s Day it devalued the ruble to 2,650 per dollar from 2,200.
TITLE: Russian Manufacturing Contracts at Record Pace
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian manufacturing shrank at a record pace in December as slumping foreign and domestic demand led to production and jobs cuts, VTB Bank Europe said.
VTB’s Purchasing Managers’ Index contracted for a fifth month to 33.8, from 39.8 in November, the bank said Jan. 1. That is lower than at any time during the 1998 economic collapse, when the government dropped its support of the ruble and defaulted on $40 billion of domestic debt. A figure above 50 means growth, below 50 a contraction. The bank surveyed 300 purchasing executives.
“We’ll probably find the economy contracted in the fourth quarter, the first of three consecutive quarters,” Maxim Oreshkin, head of research at Rosbank, said in a telephone interview. “Manufacturing will lead this process, followed by lower retail consumption in the first quarter.”
TITLE: Gas Feud Sours Public On Ukraine’s Leaders
AUTHOR: By Sabina Zawadzki and Guy Faulconbridge
PUBLISHER: Reuters
TEXT: KIEV — Ukraine’s gas dispute with Russia is unlikely to have won any popular support for Kiev’s political elite ahead of the first presidential election since the 2004 Orange Revolution.
The feud with Russia has left Ukraine with no gas supplies for 11 days, accelerating the economy’s fall into what is expected to be the worst recession in a decade.
President Viktor Yushchenko’s advisers have painted Moscow’s actions as “blackmail” to extract an unfair price for gas from Ukraine, which Yushchenko wants to steer toward Europe.
But Ukrainians, exasperated by Yushchenko’s bickering with Prime Minister Yulia Tymoshenko, have started to feel the chill in the form of heating reductions in the dead of winter.
Yushchenko and Tymoshenko, allies in the 2004 Orange Revolution that incensed Moscow, have been at each other’s throats for a year, paralyzing the political system before a presidential election in 12 months.
“The politicians have placed the people so deep in manure that they have lost all confidence in politicians,” said Sergei, owner of a catering business. “I don’t know where Ukraine is heading. It’s like a ship with a drunk captain.”
Many analysts saw the constant squabbling between Yushchenko, a dry former central banker, and Tymoshenko, the former gas magnate turned social crusader, as political maneuvering before the presidential poll.
Ukrainians now face unemployment or pay cuts — in a currency that has lost about 40 percent of its value against the dollar. The economy is expected to shrink by 3 percent to 5 percent this year, and industries have already cut output by 30 percent.
The opposition Party of the Regions, led by Viktor Yanukovich, has demanded that Yushchenko and Tymoshenko resign over the gas row. But such calls are likely to be ignored. Tymoshenko herself called for Yushchenko’s resignation less than a month ago.
“There will be a propaganda battle over the interpretation of the dispute and who resolved it and an information war about who was responsible for the social and economic consequences of the dispute,” said independent analyst Oleksander Dergachev.
“[Yanukovich’s] advisers are thinking about how to use the situation. The Party of the Regions has a difficult balancing act: to criticize the authorities but to preserve the impression of patriots.”
Even before the gas dispute with Russia, there were increasing signs of discontent — thousands of trade unionists marched against job cuts in December and threatened strikes as thousands more were put on unpaid leave.
But there is little appetite now for mass rallies.
“We’ve already had our ‘Maidan,’” said Ludmila, referring to 2004’s protests on Independence Square. “We need new leaders whom we could really follow. As for the old ones — the nation has known them too long.”
TITLE: Medvedev Criticizes Bailout Delay
PUBLISHER: Combined Reports
TEXT: President Dmitry Medvedev on Sunday issued a veiled criticism of his predecessor and mentor, Vladimir Putin, saying the Cabinet has dragged its feet in implementing anti-crisis measures.
Medvedev said the Cabinet’s financial rescue package had been only 30 percent implemented, which is “slower than current circumstances require.”
“I have to admit that the planned measures are being implemented more slowly than we expected,” he said on a visit to an engine-making plant. He did not specifically blame Putin or anyone else in the Cabinet.
Last year, the government announced more than $200 billion to help small business and prop up the economy.
Medvedev was speaking at a meeting with officials including First Deputy Prime Minister Igor Shuvalov, Finance Minister Alexei Kudrin and Industry and Trade Minister Viktor Khristenko at the Salyut aircraft engine factory, Interfax reported.
Although the popularity ratings of Medvedev and Putin remain very high, there are signs that the crisis is starting to take its toll on Russia’s usually united political establishment.
“It’s understandable that at a time of crisis, some officials will play the role of scapegoats, and if Putin is not available [for criticism] then other officials must be blamed,” said Nikolai Petrov, an analyst with the Carnegie Moscow Center.
(AP, Reuters, Bloomberg)
TITLE: Wal-Mart Moves Step Closer to Russia
PUBLISHER: Combined Reports
TEXT: MOSCOW — Wal-Mart, the world’s largest retailer, has registered a legal entity in Russia and joined a local retailers’ organization, the latest in a series of moves indicating its interest in expanding into the country.
The company registered a subsidiary under the name WM Eastern Europe Holdings and joined the Russian Association of Retail Trade Companies, or AKORT, which includes the 28 largest commercial organizations in the country.
“Wal-Mart is working on the Russian market,” Ilya Belonovsky, the executive director of the 28-member industry group said Dec. 29. He declined to elaborate.
Members of the association include French retail giants Carrefour and Auchan, Germany’s Metro, as well as local firms X5 Retail Group and Magnit.
In April, Wal-Mart appointed an executive to head its efforts to explore business opportunities in Russia and neighboring markets.
In June, the company said it was “exploring opportunities in Russia,” weeks after it acknowledged taking “active steps” to research Russia and nearby countries in Eastern Europe.
A source with an investment bank advising Wal-Mart said Dec. 29 that the U.S. company was in acquisition talks with Russian chains that may need a cash injection.
“It’s a very opportune moment for Wal-Mart now that assets are getting cheaper,” he said.
The Russian retail sector has been badly hit by a credit squeeze triggered by the global economic crisis, which analysts say could speed up consolidation within the fragmented sector.
A source with a headhunting agency familiar with Wal-Mart’s expansion plans in Russia said the U.S. giant had been hiring administrative staff. “There are already about 30 managers working in their team,” the source said.
(Reuters, SPT)
TITLE: BP Gives In To AAR Over Board Roles
PUBLISHER: Reuters
TEXT: LONDON — BP made a new concession to its oligarch partners in TNK-BP as it sealed an agreement aimed at settling a battle for control of the joint venture.
BP spokesman Toby Odone said Friday that under the deal German Khan and Viktor Vekselberg, two of the four billionaires that form the Alfa-Access-Renova consortium, which owns 50 percent of TNK-BP, will keep their management board roles.
When BP reached a preliminary settlement with AAR in September, BP chief executive Tony Hayward said one or both of the men, who BP sources blamed for stoking hostilities between the partners, would likely leave the positions.
“It’s reasonable to expect that one or both of them will leave their positions,” Hayward said at the time.
Hayward also said the appointment of the management team would be decided by the new CEO. BP-appointed CEO Robert Dudley agreed to step down as part of the peace deal.
Khan and Vekselberg’s positions are being confirmed before a new CEO has been appointed, however. TNK-BP chief operating officer Tim Summers is currently acting CEO.
BP said it retained the right to nominate TNK-BP’s chief executive and chief operating officer under the deal, although these positions must be approved by TNK-BP’s board.
TITLE: Tycoon Faces Trials After Failure of U.S. Operation
AUTHOR: By Dmitry Zhdannikov
PUBLISHER: Reuters
TEXT: MOSCOW — Billionaire Len Blavatnik’s international empire faces its biggest test with last week’s bankruptcy filing by a key component, the U.S. operations of LyondellBasell, the world’s No. 3 petrochemicals maker.
In two decades of impressive but highly leveraged growth fueled by Soviet-era links, Blavatnik, a U.S. citizen, became a rare middleman between Western capital and a new generation of Russian entrepreneurs in the early 1990s.
His business interests stretch from the United States to Kazakhstan, and his $11 billion fortune ranks him 28th on the Forbes list of the 400 richest Americans. Google co-founder Sergey Brin is the only Russian emigrant to rank higher.
Blavatnik was a pioneer in converting his Russian wealth into large assets in Europe and the United States, a path later followed by many Russian metals and oil barons.
He once earned $675 million on a Russian asset that previous owner George Soros rated his worst ever investment.
Blavatnik, who a spokesman said was not available for interview, is now in the vanguard of a less welcome trend as the global financial crisis strips the wealth of Russian tycoons.
The U.S. operations of LyondellBasell filed for bankruptcy protection in a New York court on Tuesday. The company took on billions of dollars in debt a year ago, when Blavatnik led a $12.7 billion leveraged buyout of Lyondell by Basell of the Netherlands.
Blavatnik, 51, emigrated to the United States in 1978, turning his back on a career as a Soviet engineer after four years of studies in Moscow’s Transport Engineering Institute.
Three years later he became a U.S. citizen. He retained his appetite for studies, receiving a master’s degree in computer science from Columbia University and a MBA from Harvard Business School.
Viktor Vekselberg, a fellow student at the institute, aligned his Renova company with Access Industries to begin a decade-long crusade to capture Soviet oil and aluminum assets after the collapse of communism.
Both men played big roles in Russia’s privatization auctions. They ended up with significant stakes in TNK-BP, and United Company RusAl as well as coal, telecoms, media and real estate assets.
Blavatnik once bought 25 percent of national telecoms firm Svyazinvest for $625 million from Soros in 2006, eight years after Soros paid $1.875 billion for the stake.
Blavatnik later doubled his money selling the stake for $1.3 billion to billionaire Vladimir Yevtushenkov.
Blavatnik remains a board member of RusAl — in which he also has a minority stake — and owner of a 12.5 percent of TNK-BP.
Like many Russian-born peers, he drew heavily on loans to grow his business. LyondellBasell struggles under $26 billion of debt after Basell merged with Houston-based Lyondell in a $12.7 billion deal in 2007.
TITLE: IMF May Need More Funds to Help World in Crisis
AUTHOR: By Christopher Swann
PUBLISHER: Bloomberg
TEXT: WASHINGTON — The International Monetary Fund may need another $150 billion to help counter the hit to emerging markets and poorer countries from a worsening global economic downturn, Managing Director Dominique Strauss-Kahn said.
The IMF chief, in an interview in Washington, also chided European leaders for failing to grasp the depth of the coming slump in their region, creating the risk of social upheaval. The fund will make a “significant” increase in its $1.4 trillion projection of global financial losses and writedowns, he added.
The remarks by Strauss-Kahn, a former French finance minister and presidential contender, may help build momentum for proposed stimulus packages in Germany and France. They also indicate that the fund may put pressure on nations with large foreign-exchange reserves, such as China and Saudi Arabia, to step up contributions.
“If in six months from now the crisis has worsened and many other of our members need our help, the demand may be above what we have,” Strauss-Kahn said in the interview in his office on Friday. “If the political decision is made to do something, I’m convinced that it will not be difficult to find the extra $150 billion” that would double the lender’s resources compared with a year ago, to a total of $500 billion, he said.
He warned there will be “some decrease” in the IMF’s economic forecasts. In November, the fund predicted global growth of 2.2 percent this year, with U.S. gross domestic product shrinking by 0.7 percent, Japan’s by 0.2 percent and the euro area’s by 0.5 percent.
Strauss-Kahn, 59, has already overseen the steepest jump in fund commitments in its six-decade history. The IMF agreed to lend $41.8 billion to troubled economies in November, its largest monthly pledge on record. While Japan in November pledged an additional $100 billion to boost fund resources, other nations have yet to commit to help.
Much of the aid so far has been allotted for Eastern European nations, where policy makers beset by budget deficits and sliding currencies have struggled to contain the economic slump. Strauss-Kahn spoke before departing on a trip that includes a stop in Budapest on Tuesday.
In Western Europe, governments are “behind the curve” in implementing stimulus packages and are “still underestimating the needs,” said Strauss-Kahn. The full impact of the downturn has yet to hit the region, where the “shops are still full,” he said.
German lawmakers are deliberating what would be the second stimulus package in two months, of as much as 50 billion euros ($67 billion). In France, President Nicolas Sarkozy last month laid out a proposed 26 billion euro initiative — including infrastructure investment, tax breaks for small businesses, rebates for car purchases, and a 200-euro payment for 3.8 million impoverished households.
Thomas Mayer, co-chief global economist at Deutsche Bank, estimated that, on an equivalent basis, European plans will likely amount to about 1.5 percent of GDP, less than half the 3.6 percent boost the U.S. will probably get from a stimulus.
“In the coming months I am afraid that the psychology will be the same in Europe as in the U.S.,” said Strauss-Kahn, who was France’s finance minister from 1997 to 1999 and sought the Socialist Party’s nomination to run for president in 2007. “A rate of growth between minus 1 and minus 2 percent may have some really strong social consequences.”
Strauss-Kahn also expects the European Central Bank to lower interest rates further. The ECB meets Jan. 15, and economists and investors anticipate a 0.5 percent reduction in the benchmark rate to 2 percent.
The IMF chief didn’t specify what steps the ECB ought to take beyond lowering rates, saying he favored any policies that worked to stabilize the financial system. The Federal Reserve in the U.S. has lowered its main rate to zero to 0.25 percent, and more than doubled the size of its balance sheet in an effort to thaw frozen credit markets.
“Rates in Europe will probably go down in coming months,” he said. “A decrease in interest rates is welcome but the impact will not be very important.”
In the U.S., President-elect Barack Obama is seeking authorization from Congress for about $775 billion to fund tax cuts and spending on everything from roads and schools to the energy network. He’s aiming to save or create 3 million jobs in an economy that lost almost 2.6 million last year.
Turning to Russia, the IMF chief played down concern about a collapse in the nation’s economy, saying its currency reserves, which amounted to about $438 billion in December, offer a safeguard. “The huge amount of reserves that they have puts Russia in a position where they should not be afraid of too big a destabilization of the Russian economy.”
TITLE: Financial Landscape In Flux as Titans Broken Up
AUTHOR: By Steve Slater and Megan Davies
PUBLISHER: Reuters
TEXT: LONDON/NEW YORK — The break-up of U.S. banking powerhouse Citigroup moved a step closer, and Britain took control of a big stake in another top lender on Monday as the reshaping of the global financial landscape gathered pace.
Citigroup moved close to a deal to join its Smith Barney business with Morgan Stanley’s brokerage operation, people familiar with the matter said.
The move would create the largest retail brokerage and mark the boldest step in dismantling what was the world’s biggest financial services conglomerate.
The financial services sector is in a state of constant flux as banks recoil under the threat of a long and deep downturn, with governments bailing out the worst-hit lenders while relatively strong banks look for bargain acquisitions.
Britain found itself with another stake in a top bank after investors in Lloyds TSB and its takeover target HBOS shunned a pair of rights issues, leaving the government to supply almost all of the 17 billion pounds they need to rebuild capital.
“The landscape is going to change, and it’s unlikely that large banks can go into government hands and come out the other side unchanged,” said Simon Maughan, analyst at MF Global in London.
“Whether it’s the U.S. government with Citi, the Swiss with UBS or the U.K. with Royal Bank of Scotland, governments are going to say, ‘You are very big institutions to be bailed out, and it would be good if you were a degree smaller and much more manageable’,” he added.
Britain will get a 43.4 percent stake in Lloyds Banking Group, the enlarged bank to be formed this week, adding to the 58 percent holding it took in RBS last month.
The U.S. and Britain are not alone in taking potentially long-term stakes in lenders as part of moves to shore up the troubled sector.
Greece’s third-largest lender, Alpha Bank, on Monday won approval to raise up to 950 million euros ($1.3 billion) by selling preference shares to the government as part of a 28 billion euro state-backed support package.
Germany last week pumped 10 billion euros into Commerzbank, and though the bank’s CEO Martin Blessing said over the weekend he aimed to repay the capital as soon as possible, he expected Berlin would keep its holding for some years.
Other deals in the sector were also simmering, with South African billionaire Johann Rupert’s investment vehicle in talks about buying out Lehman Brothers’ merchant banking business, and U.K. fund manager New Star Asset Management in receipt of proposals including a possible offer.
For Citi, securing a joint venture deal with Morgan Stanley would be an easier move than selling assets at a bad time. Few buyers have the cash available to buy Smith Barney outright.
The creation of the joint venture would lead to Morgan Stanley making a cash payment to Citi of about $2.5-$3 billion, a source familiar with the situation said on Sunday.
A deal between Citi and Morgan Stanley could be announced this week, two sources said, though one said it was unlikely to come as early as Monday.
TITLE: Europe’s Southern Escape
AUTHOR: By Francis Ghiles
TEXT: European relations with Russia, the European Union’s major source of natural gas for the foreseeable future, can only worsen following the latest Gazprom-Ukraine fight. The extraordinary mistrust between Europe and the bear will diminish Western companies’ appetite for risky investments to help develop new Russian gas fields. At the same time, gas production from Norway’s offshore fields, Europe’s second-most important source of gas, will plateau by 2015. As has been apparent for some time now, the energy challenge will define 21st-century Europe.
During a visit to Nigeria last fall, EU Energy Commissioner Andris Piebalgs suggested that European governments should consider backing a trans-Saharan pipeline to carry Nigerian gas to the continent via Algeria, Europe’s third-largest source of gas. The feasibility of such a project still needs to be assessed. But if it were built, it would turn Algeria, already a key energy supplier, also into an important intercontinental gas hub for Europe.
The European Commission projects that between 2005 and 2030 natural gas demand among the EU’s 27 current member states will rise 24 percent to 666 billion cubic meters. The forecast suggests that requirements for imported gas will be in a range of from 470 billion to 600 billion cubic meters by 2030; EU gas imports as recently as 2007 were just over 370 billion cubic meters.
EU gas imports could thus nearly double within 25 years. Supplies from Russia, Norway and Algeria will remain dominant, reaching between 346 billion and 430 billion cubic meters by 2030. By that time, Algeria will have overtaken Norway as Europe’s second-largest supplier. Including Libyan and Egyptian exports of gas to the EU, North Africa will overtake Norway even earlier.
Two issues arise:
1. Will Russia remain a reliable supplier, the way it has been for Germany, France and Italy? At the moment, it is doing all it can to impede the flow of gas from the Caspian region through Georgia to the EU. Much is at stake in Ukraine, through which most of the EU’s Russian and Central Asian imports pass. The war in Georgia and the current Gazprom dispute with Ukraine have alarmed European customers that the flow of Russian gas might be interrupted.
What’s more, given the collapse of energy prices and Russia’s difficult relations with major Western energy companies, it is doubtful that Moscow will be in a financial position to make the necessary investments in East Siberian fields to maintain sufficient gas production levels. It is equally doubtful that Russia will be able to transport that gas to the faraway EU market, as the entire Siberian grid system is in great need of upgrading.
2. Gas producers are increasingly concerned that the liberalization of the EU gas markets creates great uncertainty about the projections of the amount of gas needed in the future. If producers are to be in a position to mobilize the financial and technical means to explore for new gas and bring it to European customers, they must be able to rely on guarantees regarding quantities.
Large energy producers, such as Gaz de France in France and E.On in Germany, can sign long-term contracts for the delivery of large volumes of gas. In a more fragmented market, the multitude of small players cannot make the same type of long-term commitments. Therefore, the uncertainties regarding how much gas Europe will need, and when, are simply too great to allow for the long-term planning that such complex projects require. Hence, the European Commission’s wide range of forecast for gas imports cited earlier.
The current situation calls for a more coherent strategy that would take into consideration supply and demand on both shores of the Mediterranean. The EU should make a bold proposal to southern-rim Mediterranean countries and maybe Nigeria, bearing in mind the level of energy interdependence that already exists: More than 80 percent of hydrocarbon exports from Algeria, Libya and Egypt go to Europe, while 46 percent of southern European needs are met by their neighbors across the sea. These three North African countries boast almost 5 percent of worldwide gas and oil reserves.
Locking in the northern part of Africa would underline Europe’s commitment to countries with which it shares not only concerns about security and terrorism but also deep historical links as well as commercial and tourist interests. France, Belgium and Holland are home to large African diasporas. This means that there are now thousands of dual-nationality entrepreneurs in Europe who could play an important role as bridge builders between the two shores of the Mediterranean.
North Africa, and particularly the large gas fields in Algeria, is set to play a growing part in Europe’s energy mix. This is not least because the extraction and transport costs of African gas are considerably lower than those for new gas supplies from Russia and Norway. When energy prices are high, cost levels matter less. But when energy prices fall, low-cost suppliers enjoy an important competitive advantage.
Beyond gas, Europe might consider offering North African countries a partnership to develop the region’s solar energy. It could base some research facilities in these countries, as well as sharing the manufacture of solar panels or solar thermal units with them.
We are living through an economic and strategic upheaval unprecedented since 1945. Such times call for bold and imaginative leadership. European countries may reflect that they have more interests and ties in common with North Africa than the deafening noise of the fight against terrorism, illegal immigration and fear of radical Islam.
Francis Ghiles is a senior fellow at the European Institute of the Mediterranean in Barcelona. This comment appeared in The Wall Street Journal Europe.
TITLE: December Surprise
AUTHOR: Richard Lourie
TEXT: On Dec. 19, while the United States was preparing for the last shopping weekend before Christmas, U.S. Secretary of State Condoleezza Rice signed a Charter on Strategic Partnership with her Ukrainian counterpart. A similar charter with Georgia was scheduled to be signed on Jan. 4 but was delayed until Jan. 9 because of the hostilities in Gaza.
But what exactly is a Charter on Strategic Partnership, and how binding will be it be on President Barack Obama? And how is it seen by the other signatory, Ukraine — not to mention Russia?
A charter is a statement of intent, and it is not binding since it is not ratified by the U.S. Congress. But the intent is clear: to “strengthen Ukraine’s candidacy for NATO membership” by “enhanced training and equipment for Ukrainian armed forces.”
The charter’s very last point addresses the intent to open an “American presence post” — a consular-like post of one or two people — in Simferopol, Ukraine. These presence posts are part of Rice’s philosophy of transformational diplomacy, whose aim is to “build and sustain democratic, well-governed states” and to spread the U.S. vision and to learn more about those regions.
Simferopol is the capital of Crimea, the most politically sensitive part of Ukraine. Crimea was once part of Russia but was given as a gift to Ukraine by Soviet leader Nikita Khrushchev in 1954. The majority of its population of 2 million is ethnically Russian and leans more to Moscow than to Kiev.
Russia’s Black Sea Fleet is also stationed in Crimea under a lease with Ukraine, which the current Ukrainian government has stated it will not renew when the agreement expires in 2017.
If the Kremlin, which is very much against Ukraine’s membership in NATO, wishes to foment civil strife in Ukraine, Crimea would be the best place to do it. For that reason it makes sense to have a diplomatic outpost there representing U.S. views and interests while keeping an eye on the situation. But that post will also be viewed by the Russians as intrusive and provocative.
Rice must have realized that the Russian-Ukrainian gas shipment and pipeline agreements also came up at the end of the year. Those talks quickly collapsed, resulting in shortages and recriminations.
In demanding higher prices and late fees, the Kremlin might have been scrambling for money or punishing Kiev for a charter the Russians inevitably see as directed against them. Feeling backed by U.S., Kiev was tougher in negotiations.
Remarks about the U.S.-Georgia charter made by Georgian President Mikheil Saakashvili a few days after the U.S.-Ukraine charter was signed give some clue to the extravagant hopes these last-minute agreements are fostering. “America has never before said Georgia is its strategic ally, in any statement or in any agreement,” Saakashvili said. “If now the word ‘strategic’ appears in our relations, this will be the most articulate answer to the aggression against Georgia ... and to permanent efforts to destroy Georgia and tear it to pieces.”
Even though the charters are nonbinding, they create expectations that can have consequences.
Upon taking office, President Barack Obama and Secretary of State Hillary Clinton should at once inform Ukraine and Georgia that these charters will be renegotiated after the United States has hammered out a new foreign policy in which Afghanistan will play a central role. Since NATO and U.S. troops can no longer depend on supply routes through Pakistan, the cooperation of the Central Asian nations and Russia will be essential. Agreements should be reached with them first.
Richard Lourie is the author of “The Autobiography of Joseph Stalin” and “Sakharov” A Biography.”
TITLE: Golden Globes Honor Off-Beat Mumbai-Set Movie
AUTHOR: By Bob Tourtellotte
PUBLISHER: Reuters
TEXT: BEVERLY HILLS — Low-budget movies blew by their major studio rivals at the Golden Globe Awards on Sunday as romance “Slumdog Millionaire” won a leading four honors, including best drama to give it a push in the race for Oscars.
“Slumdog,” which tells of a young Indian man looking for love and competing for money on a television game show, also earned awards for director Danny Boyle, screenwriter Simon Beaufoy and composer A.R. Rahman for best musical score.
Boyle thanked the Hollywood Foreign Press Association, which gives out the Golden Globe Awards, for supporting his movie that captures the frenetic pace of life in Mumbai.
“Your mad, pulsating affection for our film is much appreciated, really deeply appreciated,” Boyle said. “The film was made from the heart, really. We never expected to be here.”
In other major honors, director Woody Allen’s “Vicky Cristina Barcelona” was named best film musical or comedy but Allen was not on hand to accept the award.
A big surprise of the night came when Kate Winslet grabbed two Golden Globes, only the third time in the history of the awards that one performer has won two acting awards.
She claimed the trophy for best actress in a drama for her role as a frustrated housewife in “Revolutionary Road” and the second for best supporting actress for playing a German woman with a hidden past in “The Reader.”
“It’s just unbelievable, absolutely unbelievable. It’s not supposed to happen,” Winslet said backstage about her wins.
Comeback kid Mickey Rourke, whose career had fallen on hard times, won best actor in a film drama with “The Wrestler.”
“It’s been a very long road back for me,” Rourke said.
The Golden Globe Awards are given out by some 90 members of the Hollywood Foreign Press Association and are closely watched for clues as to which films might vie for Oscars, the world’s top movie awards, which are given in February by the Academy of Motion Picture Arts and Sciences.
While major studio films “The Curious Case of Benjamin Button” and “Frost/Nixon” certainly will compete for Oscars, “Slumdog” pushed past its two key rivals at the Golden Globes.
“Vicky Cristina Barcelona” and “Revolutionary Road” also came from independent distributors and companies operating in the market for independent movies.
Likewise, Colin Farrell took home the Golden Globe for best actor in a musical or comedy with his role as a hitman in “In Bruges.” Sally Hawkins was best actress in the same group for her work as an optimistic teacher in “Happy-Go-Lucky.” Again, they were two movies made for art-house theaters.
One major studio release to walk away with a key film award was “The Dark Knight,” which earned Heath Ledger, who died of an accidental drug overdose last year, a posthumous Golden Globe for best supporting actor in his role as the villainous Joker in Batman movie “The Dark Knight.”
His trophy was accepted by “Dark Knight” director Christopher Nolan, who said the loss of Ledger was like “a hole ripped in modern cinema.”
“All of us who worked with Heath accept this with an awful mixture of sadness but incredible pride,” Nolan said. “He will be eternally missed but he will never be forgotten.”
“Wall-E,” which was a huge summer hit with $523 million at global box offices, took home best animated film, and Israel’s “Waltz With Bashir” was named best foreign language film.
Rocker Bruce Springsteen won a Golden Globe award for best original song with “The Wrestler.”
The Hollywood Foreign Press Association also gives out awards in television categories, where “Mad Men,” about Madison Avenue advertising executives, was named best drama program and “30 Rock” claimed the Golden Globe for best TV comedy.
“30 Rock,” a show that spoofs the making of TV shows, also claimed Golden Globe trophies for its stars Tina Fey and Alec Baldwin as best actor and actress, respectively, in a comedy.
Gabriel Byrne was named best actor in a TV drama for his role as a therapist in “In Treatment.”
TITLE: Invoking Lincoln, Obama Preps for Office
PUBLISHER: The Associated Press
TEXT: WASHINGTON — President-elect Barack Obama made an unannounced visit Saturday night with his family to see the Lincoln Memorial, paying tribute to a former president he frequently invokes as an inspiration.
It was a day in which Obama played the role of tourist, seeing the most famous monuments in the nation’s capital while experiencing the flavor of the city.
After riding in a motorcade from their temporary home at the Hay-Adams Hotel, Obama, his wife, Michelle, and daughters Malia and Sasha entered the grounds around the memorial shortly after 7 p.m. Bundled in coats in the near-40 degree weather, they walked up the dozens of steps in a close pack and into the memorial.
Once inside, Obama and his family had the opportunity to gaze at the nearly 20-foot statue of the 16th president and see the carved inscriptions of Abraham Lincoln’s Second Inaugural Address and his Gettysburg Address on the walls.
After touring the memorial for about 20 minutes, including the lower part of the memorial that houses some exhibits, the Obamas walked out, facing the reflecting pool and Washington Monument. They waved to some onlookers standing around the memorial’s lower steps.
Obama frequently invokes the memory of Lincoln. He announced he was running for president in Springfield, Illinois, at the steps of the Old Capitol, where Lincoln was a legislator.
He even plans to use the same Bible at his inauguration that Lincoln used for his swearing in. Obama will be the first president since Lincoln to use that Bible, part of the collection of the Library of Congress.
On Inauguration Day, the luncheon that will be served in Congress’s Statuary Hall to Obama, Vice President-elect Joe Biden and their families — as well as congressional leaders, justices of the Supreme Court and pending members of Obama’s Cabinet — will include foods that Lincoln enjoyed.
Obama will be back at the Lincoln Memorial soon. He plans to trace the train route that Lincoln took and hold a welcome event at the Lincoln Memorial ahead of his Jan. 20 inauguration.
Though he’s worked in Washington for about four years as a senator, Obama appeared to relish the sights of Washington on Saturday. Before arriving at the Lincoln Memorial, his motorcade drove on Constitution Avenue and then swerved around on a road right beside the Washington Monument. His family had the opportunity to get a full, close-up view of the monument for several minutes.
Earlier in the day, Obama dropped by for a bite to eat with Washington’s mayor, Adrian Fenty, at Ben’s Chili Bowl, the venerable diner in Washington’s U Street district. Obama said it was his first time visiting Ben’s Chili Bowl and “it was terrific.”
After Obama’s motorcade wandered through the U street district, passing the African-American Civil War Memorial and a flea market selling shirts that bear his face, he and Fenty surprised the restaurant around lunchtime.
He and Fenty ordered a house specialty, a Chili Half-Smoke — a quarter-pound half pork and beef smoked sausage on a steamed bun with mustard, onions and chili sauce — along with a big helping of some cheese fries.
TITLE: KHL Stages All-Star Game on Red Square
PUBLISHER: The Associated Press
TEXT: MOSCOW — With the Kremlin walls and domes of St. Basil’s Cathedral as backdrops, an international squad led by Jaromir Jagr defeated an all-Russian team 7-6 in the Continental Hockey League’s All-Star game on a bitterly cold Saturday night in Red Square.
Slovakia’s Marcel Hossa scored three goals while goaltender Robert Esche and former Ottawa Senator Ray Emery provided strong play for the winners. The Russian team featured former NHL star in Alexei Yashin.
Temperatures plunged to 3 degrees, with spectators shivering in the grandstands at the open-air rink in the heart of the Russian capital. The game was designed as a showcase for the Russian league known as the KHL.
“The [baseball] All-Star game in Yankee Stadium is special, and the Russians want to do something special, too,” Jagr said before the game.
Jagr and Yashin are the most prominent former NHL players who have been lured by KHL teams flush with money from Russia’s eight-year, oil-fueled economic boom. The game was broadcast on a major television network in the country. Russian hockey officials hope it will boost league during the global financial crisis, which is hitting companies sponsoring Russian sports teams.
“For now, we are looking to the future with optimism,” KHL managing director Vladimir Shalayev said. He called the league’s financial situation “quite stable.”
The KHL was rocked in October by the death of 19-year-old New York Rangers prospect Alexei Cherepanov, Jagr’s teammate at Avangard Omsk. He collapsed on the bench next to Jagr during a game at an arena outside Moscow.
Jagr, a former NHL MVP, joined the Siberian team Avangard Omsk last year. The one-time star for the Washington Capitals, Pittsburgh Penguins and Rangers said he was 6 or 7 when he last played outdoors, at home in the Czech Republic.
Yashin thanked the roughly 2,500 spectators who nearly filled the grandstand, roaring for a Russian victory.
“To be on Red Square when it is so cold—that means they love hockey,” he said. “It means Russian hockey is alive, and that’s the most important thing.”
Yashin was a top draft pick in 1992 and moved from Ottawa to the New York Islanders in 2001. His final four seasons of his 10-year contract were bought out by the Islanders in 2007. He is in his second season in the Russian league, where he plays for Lokomotiv Yaroslavl.
Jagr is a nine-time NHL All-Star who had 646 goals and 1,599 points—the most by a European-born player—in 17 seasons. He had hoped for a high-scoring game Saturday for the sake of the fans—and he got it.
Hossa, who plays for Latvia’s Dinamo Riga, opened the scoring in the first period, and his second goal gave the international team a 4-2 lead with less than five minutes left in the second period. The Russians came back with two goals before the period was over, including one from CSKA Moscow’s Oleg Saprykin with just more than a second left.
In the third, Saprykin scored again to put the Russians ahead for the first time, but Jagr’s countryman Jan Marek of Metallurg Magnitogorsk made it 5-5 on a penalty shot and the teams traded goals again before Hossa beat Russian goalkeeper Konstantin Barulin with just more than a minute left in the game.
Also scoring were Denis Kulyash, Alexander Radulov and Sergei Mozyakin with two goals for the Russians. For the international team, former Capitals defenseman Ben Clymer, Jaroslav Kudrna and Pavel Brendl added goals.
TITLE: Players Fall In Sydney’s Summer
PUBLISHER: Reuters
TEXT: SYDNEY — Australia’s grueling summer conditions claimed three more victims on Monday when Vera Zvonareva, Victoria Azarenka and Marion Bartoli all pulled out of the Sydney International because of injury and illness.
Zvonareva, the world number seven from Russia, pulled out of her first round-match against Spain’s Anabel Medina Garrigues after suffering a bout of gastroenteritis.
A mystery virus forced Azarenka of Belarus, who claimed her maiden WTA title at the Brisbane International on Saturday, to forfeit her match against Australian Jarmila Gajdosova.
Bartoli, the former Wimbledon finalist from France, quit her match against British qualifier Melanie South after just two games because of a calf injury.
Seventh-seed Nadia Petrova also made an inglorious early exit on a baking hot afternoon at Sydney’s Olympic tennis center when she lost 6-2 6-4 to Alize Cornet of France on a mixed day for Russia’s powerful army of women players.
World number three Dinara Safina hardly raised a sweat in beating Romania’s Sorana Cirstea 6-2 6-1 but Beijing Olympic champion Elena Dementieva initially struggled in the heat before beating fellow Russian Ekaterina Makarova 7-5 6-1 two days after winning the Auckland Classic.
Dementieva said she struggled to cope with the Australian conditions after spending the last week in New Zealand and was not surprised at the high dropout rate.
“It’s never easy to get used to the weather conditions here in Australia,” Dementieva told a news conference.
“It’s extremely hot on the courts... so you have to be very careful.”
There were no major casualties in the men’s draw on Monday with Russian fifth-seed Igor Andreev defeating Canada’s Frank Dancevic 7-6 6-3 and Spanish seventh seed Tommy Robredo beating Juergen Melzer of Austria 6-3 6-4.
¦?Maria Sharapova‘s shoulder injury will keep her out of another big event—the Australian Open.
Sharapova told the tournament Sunday she will not be able to defend her title at Melbourne Park beginning Jan. 19. She also missed the Beijing Olympics and the U.S. Open because of the injury, and her recovery has been slower than expected.
“My shoulder is doing great,” she said in a statement. “But I just started training a few weeks ago and I am just not near the level I need to be to compete at the highest levels.”
Her Australian Open victory last year started an 18-match winning streak, enabling the Russian to briefly reclaim her No. 1 ranking in May. But her ailing shoulder hampered her progress in the second half of the season.
Australian Open tournament director Craig Tiley said he was disappointed for Sharapova, who beat Ana Ivanovic of Serbia in the 2008 final.
“She played some amazing tennis on Rod Laver Arena last year and has a massive legion of fans in Australia,” Tiley said. “I know she has been working around the clock to try and get back from the shoulder injury. In the end, time beat her this year.”
(AP)
TITLE: Rehearsal Run For Inaugural
PUBLISHER: The Associated Press
TEXT: WASHINGTON — Derrick Brooks puts his left hand on the book and raises his right, ready to take the oath of office. Dozens of cameras capture this moment in history, even though Brooks is wearing a name card reading “Pres.-elect Obama.”
“It felt great to be famous for one day,” Brooks told reporters after spending hours standing in for Barack Obama during Sunday’s dress rehearsal for the presidential inaugural Jan. 20.
Organizers picked the 26-year-old Army staff sergeant from North Carolina, because he resembles Obama in height, weight and skin color. But he’s not an exact match. When Brooks met Obama last Thursday, “he said my ears weren’t as big as his.”
Admitted to the exclusive club of stand-ins were military personnel from the area who resembled Obama’s wife, Michelle, Vice President-elect Joe Biden and others expected on the inaugural stage. Even a faux President George W. Bush showed up as inaugural officials worked out the kinks in their plans for what likely will be the biggest ceremony the nation’s capital has ever hosted.
As the sky over the Capitol grew light, cannons boomed, military bands played marching music and stand-ins took their places.
The 6-foot 2-inch Brooks stood stock still as several handlers moved the man facing him, a stand-in for Chief Justice John Roberts, to the right — then left, then right again, before marking the spot with brightly colored tape. Small shifts and fixes were all part of a long day.
“It’s important to rehearse this so it goes off flawlessly on the inauguration day,” said Navy Chief Petty Officer Lucy Quinn, spokeswoman for the Armed Forces Inaugural Committee. “The president is supposed to take the oath of office as close to noon as can possibly be timed.”
Even before the stand-ins took their places, the U.S. Marine Band and U.S. Army Herald Trumpets fine-tuned their performances. The musicians chuckled at those who made mistakes while practicing.
Sam Myers, a top campaign aide who Biden recently named to a staff post, checked out the scene and walked among the stand-ins. He and other aides to the president-elect and vice president elect at the rehearsal will walk their bosses through what they should expect, according to Howard Gantman, staff director of the Joint Congressional Committee on Inaugural Ceremonies.
Later, on the east side of the Capitol, the military practiced landing the helicopter that will take Bush to Andrews Air Force Base after Obama has become president. Then the helicopter was replaced by a mock-up of the motorcade that will carry the new president to the White House.
When the president-elect’s name was announced during the practice inauguration, it was “Barack H. Obama” — not Barack Hussein Obama. During the campaign, Obama’s middle name — common in the Middle East — was at times used as a negative by people opposed to his election.
After winning the presidency, Obama said he planned to use his full name in the swearing-in ceremony. The Presidential Inaugural Committee said Sunday that Obama still plans to use his middle name when taking the oath of office.
Wearing a grin even wider than Obama’s, Brooks told reporters he was honored to participate in the dry run.
“I know it’s a change in history,” he said, “and it’s a historical moment that only happens, that’s only going to happen, one time.”
TITLE: New President Marks Generational Shift From Boomer Era
PUBLISHER: The Associated Press
TEXT: NEW YORK — When George W. Bush lifts off in his helicopter on Inauguration Day, leaving Washington to make way for Barack Obama, he may not be the only thing disappearing into the horizon.
To a number of social analysts, historians, bloggers and ordinary Americans, Jan. 20 will symbolize the passing of an entire generation: the baby boomer years.
Generational change. A passing of the torch. The terms have been thrown around with frequency as the moment nears for Obama to take the oath of office. And yet the reference is not to Obama’s relatively young age — at 47, he’s only tied for fifth place on the youngest presidents list with Grover Cleveland.
Rather, it’s a sense that a cultural era is ending, one dominated by the boomers, many of whom came of age in the ‘60s and experienced the bitter divisions caused by the Vietnam War and the protests against it, the civil rights struggle, social change, sexual freedoms, and more.
Those experiences, the theory goes, led boomers, born between 1946 and 1964, to become deeply motivated by ideology and mired in decades-old conflicts. And Obama? He’s an example of a new pragmatism: idealistic but realistic, post-partisan, unthreatened by dissent, eager and able to come up with new ways to solve problems.
“Obama is one of those people who was raised post-Vietnam and really came of age in the ‘80s,” says Steven Cohen, professor of public administration at Columbia University. “It’s a huge generational change, and a new kind of politics. He’s trying to be a problem-solver by not getting wrapped up in the right-left ideology underlying them.”
Obama, it must be said, is technically a boomer; he was born in 1961. But he long has sought to draw a generational contrast between himself and the politicians who came before him.
“I sometimes felt as if I were watching the psychodrama of the baby boom generation — a tale rooted in old grudges and revenge plots hatched on a handful of college campuses long ago — played out on the national stage,” he wrote of the 2000 and 2004 elections in his book, “The Audacity of Hope.”
It’s been a while since historians spoke of generational change in Washington. Fully 16 years have passed since Bill Clinton, the first boomer president, took office. Before that, presidents from John F. Kennedy to George H.W. Bush — seven straight — were part of the World War II generation, or what Tom Brokaw has termed the “Greatest Generation.”
If Obama isn’t a boomer in spirit, then what is he? Not exactly a member of Generation X, though obviously that generation and the next, Generation Y (also known as Millenials) embraced him fully and fueled his historic rise to the presidency.
“Gen Xers are known to be more cynical, less optimistic,” says social commentator Jonathan Pontell. “Xers don’t write books with the word ‘hope’ in the title.”
Some call late boomers like Obama Cuspers — as in, the cusp of a new generation. One book has called it the 13th generation, as in the 13th generation since colonial times. And Pontell, also a political consultant in Los Angeles, has gained some fame coining a new category: Generation Jones, as in the slang word ‘jonesing,’ or craving, and as in a generation that’s lost in the shuffle.
Jonesers are idealistic, Pontell says, but not ideological like boomers. “Boomers were flower children out changing the world. We Jonesers were wide-eyed, not tie-dyed.”
And Obama, he says, is “a walking, living prime example of Generation Jones. He’s a classic practical idealist. It’s not the naive idealism of the ‘60s.”
Wide-eyed or tie-dyed, Obama will be sworn in by an early “Joneser” himself — Chief Justice John Roberts, who turns 54 at the end of January. And while the average age of the new Congress is 58.2 — an early boomer group — the new president is bringing some “Jonesers” with him.
Obama’s chosen treasury secretary, Timothy Geithner, is 47. His pick for education secretary, Arne Duncan, is 44, as is Susan Rice, his U.N. ambassador. (His apparent pick for surgeon general, 39-year-old neurosurgeon and TV correspondent Sanjay Gupta, is a true Gen Xer.)
Of course, Obama’s also bringing in veteran Clintonites — most notably Hillary Rodham Clinton, 61, his former campaign rival, as secretary of state. And his vice president, Joe Biden, 66, and defense secretary, Bush holdover Robert Gates, 65, are pre-boomers. But those are the kind of choices — inclusive of other perspectives, embracing rivals — that lead many to call Obama the first post-boomer president.
“It may be technically correct to call him a boomer,” says Douglas Warshaw, a New York media executive who, at age 49, is part of whatever cohort Obama is in. “And it’s in the Zeitgeist to call him a Gen Xer. But I think he’s more like a generational bridge.” He adds that Obama got where he was by “brilliantly leveraging the communication behaviors of post-Boomers,” with a campaign waged across the Web, on cell phones and on social networking sites.
One analyst of popular culture believes Obama definitely symbolizes a new generation — just not one connected to the year he was born.
“I think it’s hilarious that everyone wants to categorize people by their birth year, especially now, a time when our parents are on Facebook,” says Montana Miller of Bowling Green State University. Obama, she says, represents a generational shift in ways less tangible than age.
“You can see it from his approach to knowledge. Never before have we had a president who’s troubled about giving up his Blackberry,” Miller says. (Indeed, Obama is still in a struggle over whether he can keep the device.) “He’s constantly exposed to multiple perspectives, to what people out there feel and think.”
Obama’s biracial heritage also plays into the generational shift, Miller says. “It’s so emblematic of how the world is changing,” she says. “So many people are now some sort of complicated ethnic mix. Today’s youth are completely comfortable with that.”
Will Obama speak of generational change when he stands on the podium to issue his inaugural address? Given some of his rhetoric on the campaign trail, it’s reasonable to think he will — just as, some six months before he was born, JFK pronounced on Inauguration Day that “the torch has been passed to a new generation of Americans, born in this century, tempered by war, disciplined by a hard and bitter peace.”
Interestingly, Kennedy is often claimed by boomers to be one of their own, even though he was nothing of the kind; born in 1917, he’d be 91 now. In the same way, many Gen Xers and even Gen Yers like to claim Obama, too.
“As humans we all want to be part of something bigger than ourselves, part of a page in a history book,” Pontell says. And at least for now, he adds, “Obama’s a rock star, and people are dying to call him one of their own.”
TITLE: Man U Thrash Chelsea in 3-0 Thriller
AUTHOR: By Martyn Herman
PUBLISHER: Reuters
TEXT: LONDON — Manchester United thrashed Chelsea 3-0 at Old Trafford on Sunday as the Premier League champions moved an ominous step closer to leaders Liverpool.
Nemanja Vidic headed United in front in first-half stoppage time and Wayne Rooney doubled their advantage on the hour with a close-range volley. Dimitar Berbatov completed the rout in the 87th minute to lift United into third place.
Alex Ferguson’s side are now just five points behind Liverpool and one behind a Chelsea side who were desperately lacking any spark and wilted alarmingly. United have two games in hand of both their main title rivals.
“(Chelsea) had a lot of good possession and they are a threat when they get possession...but I don’t think they really got a clear-cut chance,” Ferguson told Sky Sports.
“We said before that we still had all the main teams at home and we really need to win those games. January is a big month for us with eight games but we’ve got the squad to cope.”
United face Wigan Athletic on Wednesday and Bolton Wanderers on Saturday. Should they win both they will be top of the league before Liverpool face Everton next Monday.
Defeat was Chelsea’s first on the road in the league this season and continued manager Luiz Felipe Scolari’s poor record against the top sides since taking over at Stamford Bridge.
“This has done big damage to us,” the Brazilian told Sky. “We came here to win and now we need to think about what happened with some players.”
Earlier, Wigan won for the sixth time in seven league matches when Maynor Figueroa’s late header earned a 1-0 victory over Tottenham Hotspur who are third from bottom.
United were dealt a blow before kick-off when central defender Rio Ferdinand was ruled out with a recurrence of a back injury that will require a visit to a specialist next week.
However, his absence was hardly noticed as keeper Edwin van der Sar barely had a save to make as United made it eight league games without conceding a goal.
A yellow card for Frank Lampard after a foul that left Cristiano Ronaldo in a heap set the tone for a messy opening to a match that could be a pivotal point in the season.
United appealed for a penalty when Ashley Cole appeared to block a cross with his arm but it took them half an hour to force Petr Cech into a save from a Berbatov shot.
United began to ratchet up the pressure on the Chelsea goal just before the interval.
John Terry was forced into one desperate block from a Park Ji-sung shot before Ronaldo had a headed goal disallowed after referee Howard Webb ordered a crafty United corner to be re-taken — much to the fury of Rooney.
Chelsea failed to learn their lesson and as Giggs delivered the ball again in stoppage time, Berbatov got a slight touch and Serbian defender Vidic crept in at the far post to nod the ball past Cech.
The goal knocked the stuffing out of Chelsea and despite Scolari sending on Nicolas Anelka to partner Didier Drogba up front after the break it was United who moved up a gear.
A sweet movement on the hour mark saw Ronaldo’s back heel release Patrice Evra and his pacey cross was met first time by Rooney to double United’s lead.
United could have scored on numerous occasions as Chelsea wilted before Berbatov supplied the final flourish, connecting with a Ronaldo free kick.
TITLE: Arsenal Gun For Arshavin
PUBLISHER: Agence France Presse
TEXT: LONDON — Arsenal appeared Friday to be close to finalizing a deal to bring Russian playmaker Andrei Arshavin to the Premier League.
Gunners boss Arsene Wenger has been pursuing the much-admired Zenit St. Petersburg forward and he was coy when asked if a transfer, which is expected to cost Arsenal around $30 million, was close to being finalized.
“We do not want to talk too much about who we want to buy,” Wenger said. “At the moment I cannot give you any good news but in this job no news is good news.
“Nothing has fallen through. We are on alert in the transfer market.”
Wenger’s reluctance to splash out on big-name buys has been reduced by the Gunners up-and-down form in the first half of this season and, as well as a forward, he is hoping to secure the services of an additional midfielder before the end of the month.
“We are a little short because we wanted a player like [injured Czech] Tomas Rosicky to play 80 percent of the games and he has not played at all,” the Frenchman said.
TITLE: Chavez: Castro To Remain In Seclusion
PUBLISHER: The Associated Press
TEXT: CARACAS, Venezuela — Venezuelan President Hugo Chavez said Sunday it is unlikely that ailing former Cuban leader Fidel Castro will ever appear in public again.
“That Fidel in his uniform who walked the streets and towns late at night, hugging the people, won’t return,” Chavez said during his Sunday television and radio program. “That will remain in memories.”
He did not discuss the 82-year-old Castro’s current medical condition or say why he thought Castro would not return to the public stage.
Chavez has continued to meet occasionally with his friend Castro in private since the former Cuban leader underwent emergency intestinal surgery about 2 1/2 years ago. Castro was last seen in public on July 26, 2006, at a celebration in eastern Cuba.
Since then, Cuban authorities have periodically released photos and videos of Castro meeting with Chavez and other foreign leaders.
Fidel has ceded power to his younger brother Raul Castro, but continues to write essays published in official Cuban media.
Chavez, who says he is steering Venezuela toward socialism, fondly recalled the last time he and Castro appeared in public together during a trip to Argentina in July 2006.
“He walked to the door of the plane and we hugged. My God. I didn’t think it would be the last time.”
“Fidel will live forever, beyond the physical life,” Chavez said Sunday.
Since taking office in 1999, Chavez has forged strong ties with Cuba. Venezuela ships 190,000 barrels of crude oil a day to the communist-led island at preferential rates while Cuba has sent thousands of doctors and sports trainers to Venezuela.
TITLE: Gaza Death Toll Reaches 900 as War Rages
AUTHOR: By Nidal al-Mughrabi
PUBLISHER: Reuters
TEXT: GAZA — Israeli troops fought fierce gun battles with Hamas fighters Monday, keeping military pressure on the Islamist group while avoiding urban warfare that would complicate ongoing diplomatic efforts to end the Gaza war.
An Israeli military spokesman said army reservists had been thrown into the offensive that Israel launched 17 days ago with the declared aim of ending Hamas cross-border rocket attacks.
But Israeli forces were still holding back from a threatened third stage of their deadliest assault on Palestinian militants in decades — a push into the city of Gaza and other urban areas to add more punch to an air campaign and ground offensive.
Israeli Foreign Minister Tzipi Livni, a candidate for prime minister in a Feb. 10 election, said the surprise bombing of the Gaza Strip at the start of operations on Dec. 27 and an armoured thrust a week later had “restored Israel’s deterrence.”
She gave no indication in an interview with Army Radio when Israeli assaults, which Gaza medical officials said have killed nearly 900 Palestinians, including many civilians, might end.
Political sources said Livni, chairman of the ruling Kadima party, and Defence Minister Ehud Barak, head of center-left Labour, wanted to halt the operation in the Hamas-ruled territory as soon as possible.
But the sources said outgoing Prime Minister Ehud Olmert, who resigned as Kadima chief in September, disagreed and planned to present the issue in a cabinet forum where he has support.
In violence Monday, Israeli forces killed a Palestinian gunman and four civilians, medical workers said.
Israeli soldiers battled Hamas militants east and north of the city of Gaza in what residents called ferocious fighting.
The Israeli military said its aircraft carried out more than 10 attacks overnight, fewer than on many previous days. They struck Hamas gunmen, weapons caches, a rocket launching position and a smuggling tunnel under Gaza’s border with Egypt, it said.
Two rockets and two mortar bombs fired from the Gaza Strip hit Israel, causing no casualties, the military said, announcing that a daily three-hour suspension of operations would begin on Monday at 10 a.m. local time to allow Gazans to shop for food.
TRUCE NEGOTIATIONS
The Palestinian death toll since Israel’s “Operation Cast Lead” began stands at 895, many of them civilians, Gaza medical officials said. About 3,600 Palestinians have been wounded.
Thirteen Israelis — three civilians hit by rocket fire and 10 soldiers — have been killed, Israel says.
Egypt’s state news agency MENA said more talks in Cairo with a Hamas delegation on an Egyptian plan for a cease-fire were planned for Monday.
MENA quoted an “official source” as saying that discussions Sunday between Egyptian intelligence chief Omar Suleiman and Hamas officials on ending the bloodshed had been positive.
Israel, which rejected a UN ceasefire resolution last week as unworkable, wants a halt to rocket attacks and measures to stop Hamas from rearming via tunnels running under the Egyptian frontier, an area Israel calls the Philadelphi corridor.
Hamas leader Khaled Meshaal has said his Islamist group would not consider a cease-fire until Israel ended its air, sea and ground assault and lifted its blockade of the Gaza Strip.
Western and Israeli officials said diplomats were discussing an internationally-assisted technical monitoring system to help Egypt stop weapons smuggling and intercept rocket shipments.
Egypt, concerned for its sovereignty, opposes stationing an international force on its side of the frontier.
Israeli warplanes have repeatedly bombed the Philadelphi corridor along Gaza’s 15-km (nine-mile) border with Egypt, sometimes using “bunker buster” munitions that explode underground and cause shockwaves to try to collapse the tunnels.
Two tunnel-builders in the southern Gaza town of Rafah estimated the air strikes had destroyed hundreds of tunnels.
Top Israeli military intelligence officials recently told Western diplomats that Israel’s “third phase” options included taking over the corridor and the adjacent town of Rafah and holding onto them, one participant in the meetings told Reuters.
Israel believes at least some of Hamas’s rockets arrived in Egypt by ship and were then transported overland across the Sinai peninsula before being sent into Gaza through tunnels.
TITLE: New Pink Iguana Discovered
PUBLISHER: The Associated Press
TEXT: QUITO, Ecuador — It is hard to believe a giant, pink lizard could be overlooked for almost two centuries.
Charles Darwin missed it during his 1835 study of the Galapagos Islands that led to his theory of evolution. Park rangers ignored the pink and black-striped reptiles after accidentally happening upon them in 1986. Some thought the stripes were just stains.
But scientists now have documented a new species, the iguana “rosada,” (pink in Spanish), which may be one of the archipelago’s oldest, according to research published this week in the Proceedings of the National Academy of Sciences.
Blood and genetic tests on 36 pink iguanas — which average 3-5 feet (more than a meter) in length — show the lizards belong to a previously undiscovered species that appears to live exclusively around Isabela Island’s Wolf Volcano, an area Darwin never explored.
Researchers from the University of Rome Tor Vergata and Galapagos National Park began to investigate in 2001 whether the lizards were a different species or an adaptation for environmental or food reasons of the Galapagos’ two known land iguanas: the Conolophus subcristatus and Conolophus pallidus.
But the pink iguana, it turns out, is older and likely the predecessor of the two, said Cruz Marquez, a biologist who is part of the research team. It dates back more than 5 million years, researchers say.
The pink iguana has not yet been given a scientific name.
“To discover a large vertebrate that was unknown in an area where there has been a lot of research is very special,” Marquez told The Associated Press by telephone from the park.
The pink iguana population size, eating and reproductive habits are still unknown, and no young animals have been discovered, according to a park statement. Further research will determine what resources are needed to guarantee the lizards’ survival.
“We need to clarify if reproduction is impeded and for what reasons,” lead researcher Gabriele Gentile told the AP, noting that feral cats in the area may be eating the iguana’s eggs.
The Galapagos islands, an archipelago located about 620 miles (1,000 kilometers) off Ecuador’s Pacific coast, were protected as a UNESCO’s Natural Heritage site in 1978. In 2007 UNESCO declared them at risk due to harm from invasive species, tourism and immigration.
TITLE: British Prince Slammed For ‘Paki’ Comment
PUBLISHER: Agence France Presse
TEXT: LONDON — Prime Minister Gordon Brown said on Monday that the British public would give Prince Harry the “benefit of the doubt” over his home movie showing him calling army colleagues “Paki” and “raghead.”
Brown said the 24-year-old royal, who is third in line to the throne, knew his language was unacceptable and his apology was sincere.
But the father of the Pakistani soldier who Harry called “our little Paki friend” said he could not accept the prince’s apology, insisting that he should say sorry to the Islamabad government.
The News of the World newspaper on Sunday published the video clips made by Harry in 2006 while he was an army officer cadet.
The prince’s office said Harry was extremely sorry for any offence caused.
“The sincerity of his apology cannot be doubted,” Brown told GMTV television.
“It was a mistake, he has made the admission of that and, once he has made his apology, I think the British people are good enough to give someone who has actually been a role model for young people and has done well fighting for our country, gone into very difficult situations with bravery, I think they will give him the benefit of the doubt.
“I think Prince Harry knows that these comments are unacceptable.
“I think it is a genuine apology. These comments have no part in our life.”
The Ministry of Defence said the prince’s commanding officer would look into his remarks. However, he will not face a formal investigation.
Despite trying to shake off his “playboy prince” image through his charity work and military service in Afghanistan, Harry has repeatedly found himself in hot water for his comments and antics — most infamously for wearing a Nazi uniform to a fancy dress party.
The latest embarrassing images were shot as Harry was waiting with his platoon in an airport departure lounge for a flight to a training exercise in Cyprus three years ago.
Touring the room with a video camera as his colleagues snooze, he spots a colleague whose family is of South Asian origin and says: “Anybody else around here?... Ah, our little Paki friend, Ahmed.”
“Paki” is a racist term for Pakistanis or other South Asians and is thought to have been directed at Ahmed Raza Khan, who served with Harry at Britain’s prestigious Sandhurst military academy.
Harry’s grandmother Queen Elizabeth II presented Khan with the Overseas Sword for being the best foreign cadet in April 2006.
The prince’s office insisted he had used the term without malice.
“Prince Harry fully understands how offensive this term can be, and is extremely sorry for any offence his words might cause,” a spokesman said.
“However, on this occasion three years ago, Prince Harry used the term without any malice and as a nickname about a highly popular member of his platoon.
“There is no question that Prince Harry was in any way seeking to insult his friend.”
Khan’s father Muhammad Yaqoob Khan Abbasi said he was “very, very hurt” by the “disgraceful insult”, telling the Daily Mail newspaper from Pakistan: “That word he used is a hate word and should never be used against any Pakistani.
“Prince Harry should apologise to the Pakistani army and to the Pakistani government for this. I cannot accept his apology unless they first accept his apology.”