SOURCE: The St. Petersburg Times
DATE: Issue #1455 (17), Tuesday, March 10, 2009
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TITLE: President Assesses First Year In Job
PUBLISHER: The Associated Press
TEXT: MOSCOW — President Dmitry Medvedev, marking a year since his election, says the financial crisis has changed his plans but Russia will continue to move forward.
In a video posted Saturday on his web site, Medvedev acknowledged the country is being hit hard.
Russian officials had contended last year that the country would be a comparatively safe haven amid global economic turmoil. But plummeting oil prices weakened the economy: Stock markets have dropped 70 percent since May and the ruble has lost a third of its value against the dollar.
Medvedev said the downturn has forced him to defer one of his goals, that of turning Moscow into an international financial center.
“It’s clear, let us say, that one of those great, ambitious tasks, the formation of a world financial center in Moscow, which I spoke about at the beginning of last year at an array of conferences that were occurring at that time, today isn’t Task No. 1,” he said.
He was videoed wearing a fleece jacket in a snowy clearing at his residence outside Moscow. The video was posted on the first anniversary of his being declared the winner of the presidency, replacing his mentor, Vladimir Putin.
“Of course, this crisis pretty much changes our plans, but I want to especially emphasize that we nonetheless should continue the movement forward, despite all these difficulties,” he said.
Medvedev said Russia is continuing with other ambitious tasks, including efforts to increase the rate of childbirth and reduce the country’s death rate. Russia’s population has declined every year since the breakup of the Soviet Union and some experts suggest it could drop another 30 million people by mid-century, to around 110 million.
Medvedev, who took office in May, kept a relatively low profile in his early months, a notable contrast to Putin, who was shown extensively on Russian television in his new role as prime minister. That contributed to speculation that the country was still run by Putin.
But Medvedev has increased his visibility in recent months, including by establishing the so-called “video blog” on which Saturday’s statement appeared. The blog also includes occasionally critical viewer comments.

TITLE: Clinton Presents Lavrov With ‘Reset’ Button
AUTHOR: By Sue Pleming
PUBLISHER: Reuters
TEXT: GENEVA — Russian Foreign Minister Sergei Lavrov hailed as wonderful his relationship with Hillary Clinton and the U.S. Secretary of State praised a new start in U.S.-Russian ties after their first one-on-one meeting.
They also saw the funny side over a language error when Clinton presented Lavrov with a box containing a red “reset button” as a symbol of better relations, which had sunk to their worst since the Cold War under George W. Bush’s presidency.
The button was marked “Peregruzka” and Clinton joked to Lavrov: “We worked hard to get the right Russian word. Do you think we got it?”
“You got it wrong,” said Lavrov, smiling as they pushed the reset button together before dinner at a Geneva hotel on Friday.
He told Clinton “Peregruzka” meant “overcharge”, to which Clinton replied: “We won’t let you do that to us.”
The meeting did not produce major announcements, but U.S. officials said they hoped the positive tone would carry through when President Barack Obama and Russian President Dmitry Medvedev meet later this month.
Clinton was cautiously upbeat, saying there needed to be trust and more predictability to the relationship.
“It was, Sergei, a good beginning,” Clinton said at her first joint news conference with Lavrov, where the two looked relaxed in comparison to often tense public appearances when Clinton’s predecessor Condoleezza Rice was in office.
“I hope Hillary will agree with me, I venture to say, we have a wonderful personal relationship,” said Lavrov.
In the past few years, the U.S.-Russian relationship had focused more on differences than on areas of cooperation, with disputes ranging from a proposed U.S. missile shield to Moscow’s invasion of Georgia and human rights concerns.
A senior U.S. official described “good atmospherics” over the dinner of vegetable soup, grilled fish and chocolate dessert, and said Clinton and Lavrov sought areas where they could work together.
Differences were obvious — from Kosovo’s independence, which Lavrov called illegal, to Georgia and strong concerns over Russia’s plans to sell missile technology to Iran.
One result was a decision to launch a plan to renegotiate the START strategic arms treaty, which is aimed at reducing nuclear weapons, by the end of the year.
There were also hints of a compromise brewing on a U.S.-proposed missile defence system in Europe that Washington says is designed to protect Europe and its allies from any threat from Iran.
Moscow wants to see what the United States will do with the previous Bush administration’s plans to station systems in NATO allies Poland and the Czech Republic. Russia says this threatens its security.
The senior U.S. official, who declined to be named, said the United States wanted to have serious discussions with Russia on the issue and had made this clear to Lavrov.
“One of the things we looked at is how we might use the assets that each of us have, while working with our European partners,” said the official, indicating there might be some new proposals in the pipeline.
The Obama administration has increasingly pointed out to Russia that if the threat from Iran can be eliminated, then the need for the missile shield could diminish.
U.S. officials, some of whom were around when Bush was president, said they noticed a marked change in Lavrov’s tone at the Geneva meeting and that he appeared more relaxed.
At one point in the news conference, he joked that there was one agreement they had reached and that was over how “resetting” the new relationship should sound in both Russian and English.

TITLE: Female Student Denied Right to Drive Metro Trains
AUTHOR: By Irina Titova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Russia’s High Court last week rejected the civil case of St. Petersburg student Anna Klevets who demanded the right for women to work as metro locomotive drivers or assistants for the drivers.
The reasons for the decision were not announced, but a government representative in court insisted on the wisdom of such restrictions and their adherence to the International Labor Organization Convention.
Government representatives said such restrictions were the result of attitudes to women in society, Interfax reported.
Yelena Pleshko, head of the legal department at Peterburgskaya Egida, the rights organization that represents Klevets’ interests, said on Thursday that they hadn’t seen the court’s final decision yet and therefore did not know the reasons for the decision.
“As soon as we get that decision, we’ll decide whether we should appeal to the Court of Cassation,” Pleshko said.
Klevets, 22, a fifth year law student, appealed to the court at the end of 2008 after she failed to get a job as an assistant to a metro locomotive driver.  
Klevets had decided to work in the metro because she could not find a vacancy in her area of expertise, Pleshko said.
“Klevets comes from a different city, and she had financial difficulties like many students, especially in the situation of the financial crisis,” Pleshko said.  “Therefore she first tried to find a law job before her graduation, but failed. Then she saw information about well-paid jobs as metro locomotive drivers, and decided to go for it. However, she was refused on the grounds that women are not allowed to do this work,” she said.
“Klevets was struck by the unfairness of the situation in which there were vacancies, but only for men,” Pleshko said.
Klevets considered the restriction on women working in metro locomotives as gender discrimination that contravenes legislation.
The student also appealed to St. Petersburg’s Leninsky district court with a request for 100,000 ($2,800) rubles for moral damage and the salary that she could have received for working as a metro locomotive driver, Pleshko said.
Women were banned from working as metro locomotive drivers in Russia in 2000. Previously, many women had worked as metro locomotive drivers both in Moscow and Leningrad, as St. Petersburg was formerly known, and were highly respected for doing so. 
Article 253 of the Russian Labor Code says that female workers should not perform “hard physical jobs and jobs with harmful or dangerous labor conditions, or work underground except in non-physical jobs or sanitary and consumer services.” 
The list of forbidden jobs includes 456 professions, including diver, gas rescue worker, paratrooper and fireman.
“At the same time we see that women are allowed to work with tuberculosis patients or as metal workers,” Pleshko said.
Pleshko said that her organization had recently received calls from two more young women willing to work as metro locomotive drivers.
“One of them had dreamed of working as a metro locomotive driver since she was seven years old,” she said.
Klevets could not be reached for comment.
Yulia Shavel, spokeswoman for the St. Petersburg metro, said the city’s metro has a neutral position in regard to Klevets’ case.
“We are not against women as metro drivers but we can’t accept them for those positions since it’s against the law,” Shavel said.  “Besides, if women want to do it, they should have serious medical approval to do so,” she said.
“If women want to do that job, they need to know that this profession requires instant, innate reactions to non-standard situations. In the event of those situations, they would need to take the right decision, and quickly,” Shavel said.
Shavel said the difference between women working as tram drivers is that those workers work above ground and that other services can come to their assistance, whereas underground it is not as easy, especially if there is a fire.
Meanwhile, Natalya Donskaya, a retired metro locomotive driver, said the job of a locomotive driver is rather difficult for women.
“I wouldn’t wish this job on other women,” she said. “It requires the complete sacrifice of your personal life.  Everything has to be dedicated to this job, and one must have excellent health to do it,” Donskaya said, Russia’s Channel One television reported.

TITLE: In Brief
TEXT: <b>New Metro Station </b>
ST. PETERSBURG (SPT) — A new metro station opened in St. Petersburg and two lines were reorganized on Saturday, Interfax reported.  
The fourth “orange” line, which formerly ran from Ulitsa Dybenko in the southeast to Komandantsky Prospekt in the northwest, now runs from Ulitsa Dybenko to the new Spasskaya station at the junction between Sennaya Ploshchad and Sadovaya stations. The remaining half of the fourth line running to Komandantsky Prospekt has become part of the fifth “purple” line.
The new Spasskaya station connects to Sennaya Ploshchad and Sadovaya stations by underground passageways and will serve only as a transfer station until 2011, when a shared overground entrance will be built for it and Sennaya Ploshchad station on Sennaya Ploshchad itself.
The first part of the fifth “purple” line was opened in December 2008, with trains running from Volkovskaya station to Zvenigorodskaya station, which is a transfer station connected to Pushkinskaya station on the first “red” line. A third station will be opened between Volkovskaya and Zvenigorodskaya in 2010, along with a southward extension of the line that will include two new stations. This date may change, however, due to the financial crisis, Interfax reported.

<b>Traffic Cop vs. FSB Man</b>
ST. PETERSBURG (SPT) — A traffic policeman was sentenced Friday to two-and-a-half years in a penal colony for shooting a security services agent in the face with a non-lethal handgun, according to a press release from the St. Petersburg Prosecutor General’s Office.
Traffic policeman Irek Mukhametkhanov was found guilty of willful infliction of grave harm after he shot a member of the Federal Security Service (FSB) during an argument in June 2007. The “self defense” handgun used by Mukhametkhanov, which can fire rubber bullets, flares or small shock grenades, caused a brain concussion, damaged the left eye and permanently disfigured the face of the FSB agent. The press release did not indicate which type of ammunition was used.
An investigation of the incident showed that the argument arose after Mukhametkhanov’s car blocked the exit of the FSB agent’s parked car. The traffic policeman refused the FSB agent’s request to move his car, and in the resulting quarrel, he shot the agent twice in the face. The two men did not know each other, according to the press release.  
Mukhametkhanov did not admit his guilt, the press release noted.

<b>Mondeo in Production</b>
ST. PETERSBURG (SPT) — Ford Motor Company’s Russian factory has begun production of the company’s Mondeo model, said Ford Russia’s director of communications Yekaterina Kulinenko, Interfax reported.
According to Kulinenko, the first Mondeo cars have already been shipped to dealers, although the start of official sales of the model will be announced later.  She added that a decision has been made to adjust factory operations due to changing market conditions, but did not give exact details about the factory’s planned output.
The factory, which is located 24 km outside of St. Petersburg in Vsevolozhsk, began working again Jan. 21, having been shut down Dec. 24.  The company stopped production in order to avoid filling its warehouses and to prepare for production of the Mondeo, according to Mark Ovenden, director of marketing, sales and service, Interfax reported.
Production of the Mondeo had been set to begin in September, and Ford had planned to produce around 1,000 Mondeo cars in 2008, but production was later postponed, Interfax reported.

TITLE: St. Petersburg Event For National Protest in Doubt
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Local oppositional leaders were vague or out of reach when approached on Monday about whether the Dissenters’ Day, a nationwide protest organized by the pro-democracy coalition The Other Russia, would take place in St. Petersburg. Scheduled for Thursday, the Dissenters’ Day was announced as being held in 20 to 30 Russian cities, including Moscow.
Olga Kurnosova, the local leader of Garry Kasparov’s United Civil Front (OGF), said that protests are “possible” without going into detail and asked to be telephoned “in two days,” when called on Monday, while Andrei Dmitriyev, the leader of the St. Petersburg branch of Eduard Limonov’s banned National Bolshevik Party (NBP) could not be reached for comment on his mobile phone on the same day.
Dissenters’ Days are a new form of protest suggested by author and NBP leader Limonov when a march held in Moscow on Dec. 14, 2008, was banned by the local authorities and a massive OMON special police task force was sent to disperse and arrest protesters. 
Limonov reasoned that in a situation where the authorities repeatedly refuse the opposition’s right to protest, there is no point in approaching them for authorization or informing them about the planned location, as the notification merely serves as an invitation for OMON to turn up in force.
“We are not planning to submit an application,” Limonov was quoted by Interfax as saying last month.
“The constitution is the country’s supreme law. Peaceful gatherings of citizens should go on in cities without any permits from the authorities.”
According to the web site of the OGF, protesters will gather at Tverskaya metro in Moscow at 7 p.m. on Thursday, but unauthorized demonstrations under the slogans “Dismiss Putin,” “The Right to Protest” and “Enough Lying” will also take place in several other districts in the city.
While the first Dissenters’ Day drew hundreds in Moscow on Jan. 31, St. Petersburg only responded with a series of OGF-organized one-person protests on Pionerskaya Ploshchad. 
The local branch of the NBP, however, adopted a different tactic by conducting a surprise protest two days earlier, when three members entered Prime Minister Vladimir Putin’s representative office in St. Petersburg demanding a meeting with Putin, while several others lit flares and unfurled a banner saying, “Putin, Answer for the Crisis!” Three were detained and sentenced to five days in custody for “disorderly conduct.”
In Moscow, the newly-formed democratic movement Solidarnost (Solidarity) held its first meeting on Feb. 21, but the St. Petersburg opposition chose not to rally on that day, when City Hall declined all six suggested locations for the meeting.
The oppositionists reasoned that in view of the March 1 municipal elections, any public action would give the authorities the chance to arrest and isolate the opposition leaders and activists, some of whom were running as candidates.
Whether the Dissenters’ Day takes place in St. Petersburg on Thursday or not, there are at least two other protests in the city planned this week. 
The Day of United Actions organized by social protest groups and left-wing organizations that was to be held on Ploshchad Lenina near  Finlyandsky Station on Saturday  was not authorized by City Hall, though the organizers hope to renegotiate the time. It is planned that the protest’s main themes will be price and tariff hikes.
A rally of TIGR, the Association of Active Citizens of Russia, to be held by the Peterburgsky Sports and Concert Hall (SKK) has been authorized for Sunday.
TIGR formed in the wake of last year’s protests against the raising of tariffs on used car imports but then expanded its agenda, with the upcoming meeting’s demands including freedom of speech and press, as well as protests against price hikes, the fall in people’s living standards and actions of Putin’s government “aimed against the people.”

TITLE: Eurovision Song Sparks Scandal
PUBLISHER: Agence France Presse
TEXT: MOSCOW — Russia’s hosting of the Eurovision Song Contest met with fresh controversy on Monday amid criticism that a Ukrainian singing partly in her native tongue is to represent Russia.
There was outrage from a rival act and criticism on the Internet from Russian Eurovision fans after the weekend selection by a jury in Moscow of Russia’s choice, Anastasia Prikhodko and her love song “Mamo.”
The song, which Prikhodko performed partly on her knees, beating the stage to show the depth of her emotion, went down badly with the producer of rival act Valeriya, who described it as a “disgrace” and demanded a re-run in an interview broadcast by RIA Novosti.
“A song performed in Ukrainian can’t have anything to do with Russia,” said the producer, Yusif Prigozhin, referring to the song’s Ukrainian chorus.
He pointed out that Prikhodko was disqualified from a similar contest to represent her own country as her entry for that contest was too long and not newly composed.
Criticism also dominated readers’ comments on the Eurovision website, one lamenting the choice of a “gastarbeiter,” or migrant laborer.
Prikhodko’s office could not be reached for comment on what was a national holiday, International Women’s Day.
On her website, http://anastasya-prihodko.com/, the singer said: “I will prove that I am worthy of Eurovision, that I can do everything possible to make sure Russia is worthily represented.”

TITLE: Self-Exiled Oligarch Still a Top Scientist
AUTHOR: By Alexandra Odynova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Self-exiled businessman and fervent Kremlin critic Boris Berezovsky has been vilified in almost ever corner of Russian officialdom. 
But there is at least one venerable state-backed organization that has yet to sever ties with Berezovsky, who has accused Prime Minister Vladimir Putin of everything from money laundering to murder — the Russian Academy of Sciences.
Berezovsky, 63, has been a member of the academy since December 1991, shortly after then-President Boris Yeltsin signed a decree establishing it on the basis of the Soviet Academy of Sciences as Russia’s “supreme scientific institution.”
In fact, Berezovsky told The Moscow Times that he believes that he is still receiving his monthly stipend from the state-funded academy, which was originally founded by Peter the Great in 1724. “As far as I know, they continue paying me money. Not me directly, but my office in Moscow,” Berezovsky said by telephone from London, where he lives as a political refugee. “I haven’t heard anything about their stopping payments.”
The academy’s web site lists Berezovsky as a corresponding member, meaning that he is entitled to a monthly stipend of 25,000 rubles ($690).
Berezovsky, who holds a doctorate in applied mathematics, worked as an engineer at a Soviet meteorological research center and was appointed head of a laboratory at the Soviet Academy of Sciences’ Institute of Management Problems in 1987.
Berezovsky’s continued membership has reportedly rankled some in the academy, which has shown an independent streak unusual for state-funded organizations. Last May, geophysicist Vladimir Strakhov proposed amending the academy’s charter to allow Berezovsky’s expulsion on the grounds that criminal charges had been brought against him.
The academy leadership rejected the proposal, however, with Yury Osipov, head of the academy, saying it could become an unwelcome precedent. All academy members are elected for life, and no one has ever been expelled. Soviet physicist and dissident Andrei Sakharov, who was sent into internal exile for protesting the Soviet invasion of Afghanistan, was also never expelled from the Soviet academy.
Since his election to the academy, Berezovsky has managed to become the country’s most politically influential oligarch; he has served as a deputy chairman of the Security Council, controlled the largest national television network and reportedly played a key role in Putin’s political ascent.
He fled the country in 2001 after being accused of fraud and received political asylum in Britain, which issued him a passport under the name Platon Yelenin. British authorities have repeatedly rejected requests by Russian prosecutors to extradite Berezovsky.Irina Presnyakova, a spokeswoman for the Russian Academy of Sciences, said there were never any plans to expel Berezovsky. She disputed the businessman’s claim, however, that he was still receiving his stipend.
“Members who have lived outside Russia for more than six months do not get their stipends because they earn money abroad,” Presnyakova told The Moscow Times.
Berezovsky is a member of the academy’s branch for nanotechnology and IT, though his colleague in the branch, Stanislav Vlasov, said he and his fellow researchers had not heard from the businessman in quite a while.

TITLE: Bakhmina’s Case Sent To Moscow
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A court in Mordovia last week sent the parole request of jailed Yukos lawyer Svetlana Bakhmina to a Moscow court for consideration.
The Zubovo-Polyansky District court in Mordovia’s capital, Saransk, had been expected to rule Wednesday on whether to release Bakhmina on parole or keep her behind bars to serve out her 6 1/2-year sentence on charges of embezzlement and tax evasion.
But the court ruled to send the case to Moscow’s Preobrazhensky District Court for consideration, Saransk court official Yury Mityagin told Interfax.
Bakhmina is one of several senior Yukos officials to be jailed since the company came under fire in 2003. Her bid to be released after serving more than half of her sentence has become a cause celebre among prominent liberals and has even been backed by Kremlin supporters. Several members of the Public Chamber have called for her release, as has former Soviet leader Mikhail Gorbachev.
It will take at least a month for the Moscow court to hear the appeal, Bakhmina’s lawyer, Roman Golovkin, said Wednesday. 
“There is little positive here because the process will be delayed once again,” Golovkin told Interfax.
Bakhmina, 39, was convicted in April 2006. She is the mother of three, and her last child was born this winter. 
Bakhmina has already been denied parole twice, in May and September.

TITLE: Medvedev Warns Against Formation of Nomenklatura
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev warned against creating a new Soviet nomenklatura at a meeting last week with top managers who are being fast-tracked to senior government positions.
Medvedev met 30 of the people in a Kremlin-backed “Golden” list of 100 potential recruits for top official posts, including New Economic School rector Sergei Guriyev, Russian Railways senior vice president Fyodor Andreyev, and Transaero general director Olga Pleshakova. 
The recruitment drive “should not turn into the personnel department of the Central Committee of the Communist Party of the Soviet Union,” Medvedev said. 
A list candidate “should be successful all the time,” rather than being a “gray person,” he said.
The list is needed because “the appearance of new people in appropriate positions in our country is going very slowly,” Medvedev said in a speech published on the Kremlin web site. “The substitutes’ bench is very short, and we keep shuffling the same cards.”
He stressed the independence of the list, which was drawn up by 170 unidentified experts. 
He asked the members to say if they had had positive experiences since being selected — or been victimized by competitors and bosses.
“If that has happened, that would be grounds to make decisions to replace your bosses with you,” he said, adding, “That’s a joke, of course, but as you realize, not entirely.”
Konstanin Kosachyov, the chairman of the State Duma International Affairs Committee who is on the list, suggested making the meeting a regular event. But Medvedev said this would turn it into a “ritual game.”

TITLE: Ingush Officials Offered Amnesty
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Ingush President Yunus-Bek Yevkurov has offered amnesty to all officials who voluntarily return money they have embezzled to the Ingush treasury, a regional newspaper reported.
Yevkurov, appointed last October by President Dmitry Medvedev and tasked with bringing stability to the volatile North Caucasus republic, said the measure was part of a new offensive against widespread corruption in Ingushetia. 
Officials who do not return money and are found to have been involved in corrupt practices will be punished severely, Yevkurov said, the Severny Kavkaz newspaper reported. He said an agency had been created in his administration to ensure that “neither bribe-takers hiding in the republic nor corrupt ex-ministers will escape justice.”
A preliminary assessment by the agency found out that officials have embezzled more than 2 billion rubles ($55.5 million) from the regional budget.
Meanwhile, the Nazran residence of Yevkurov’s predecessor, Murat Zyazikov, was shelled last week by a local resident who later died when his car exploded, Interfax reported Wednesday.

TITLE: Yevtushenkov Seeks $150 Mln for Studio
AUTHOR: By Maria Ermakova and Paul Abelsky
PUBLISHER: Bloomberg
TEXT: Russian World Studios, billionaire Vladimir Yevtushenkov’s film production company, wants to borrow about $150 million to expand its St. Petersburg movie studio.
The production unit of Yevtushenkov’s AFK Sistema is in talks with Russian banks about “long-term” loans, Andrei Smirnov, chief executive officer of Sistema Mass Media, said in an interview in Moscow on Wednesday. Russian World Studios produces “Ambulance,” a popular soap opera about ambulance employees, and worked on Woody Allen’s “Matchpoint.”
Box office revenue in Russia and the former Soviet states excluding Ukraine climbed 47 percent to $830 million in the year through November, according to the Russian Film Business publication. Sistema bought 51 percent of Russian World Studios in 2007 to invest in film and television production to tap growth. The producer is considering more acquisitions as financial turmoil in Russia squeezes out smaller competitors. 
Potential purchases may include “movie production, distribution or servicing companies,” Yury Sapronov, who runs the production company, said in the interview. Russian World Studios, which says it’s the largest provider of film production services in Russia, doesn’t have any specific targets yet and is waiting for opportunities, according to Sapronov.
Russian World Studios has spent $100 million on its St. Petersburg studio, the country’s first new film production venue in 60 years and part of the company’s plan to turn St. Petersburg into the “capital of Russia’s movie industry,” Sapronov said.
The expanded St. Petersburg studio may begin work in about three years if financing is secured, Sapronov said.
Prime Minister Vladimir Putin, a St. Petersburg native, opened the first stage of the facility in October.

TITLE: Power Consumption Down Less Than Previous Month
PUBLISHER: Reuters
TEXT: MOSCOW — Electricity consumption fell 4.8 percent in February, much less than in the previous month, official data showed Thursday, signaling that January’s industrial collapse may have begun to ease.
Electricity use is a forward indicator of economic activity, and January’s 7.7 percent drop in power consumption augured the worst fall in industrial output ever recorded.
But analysts have said factories, steel mills and other engines of industry appeared to have regained momentum in February, as electricity use in some regions did not see a significant fall year on year.
Last month, power consumption in the Far East and the regions around St. Petersburg were in line with February 2008, when the global financial crisis had not yet impacted Russia, data from the central dispatcher of the power system showed.
But overall, electricity use in the year to date has fallen 6.3 percent, one of the steepest drops since the collapse of the Soviet Union, as major industries continue to idle machinery and slash output because of a lack of demand.
Plummeting consumption has also threatened the growth plans of Russia’s electricity producers, which were privatized over the past few years to foreign and local investors such as E.ON, Enel and Gazprom.
Data from the dispatcher, known as the System Operator, also showed that power output had fallen 4.3 percent in February year on year, with a total of 86.3 billion kilowatt hours produced and 85 billion consumed across the country.

TITLE: Hotels See Slump in Guest Volumes
AUTHOR: By Yelena Zborovskaya and Yelena Dombrova
PUBLISHER: Vedomosti
TEXT: St. Petersburg’s hotels saw a 10 to 30 percent decrease in occupancy in January, causing some of them to close entire floors to save money.
Yulia Pashkovskaya, a manager at the Grand Hotel Europe, said that occupancy at the hotel had fallen by 10 to 15 percent and that one floor had been closed for renovation during the low season. Three hundred of the Park Inn Pulkovskaya’s 840 rooms are being renovated, and a third of the 1,200 rooms at the Park Inn Pribaltiiskaya are due to be redecorated before April, according to Sandra Dimitrovich, director of corporate communications and PR at the Rezidor Hotel Group. 
The Corinthia Nevskij Palace has also closed some of its rooms. Traditionally, the hotel is 35 to 40 percent full during the low season, but this year it is only 20 to 25 percent occupied, said Natalia Belik, PR director at the Corinthia Nevskij Palace.
Konstantin Sobenin, general director of Soko Hotels which manages five mini hotels, estimated the fall in occupancy at 10 to 15 percent compared to winter 2008, and said that profits had fallen by 20 to 25 percent. Visitors are staying for shorter periods of time, and the commission payable to agencies had increased from 10 to 15 percent up to 20 to 30 percent, he explained.
The inflow of tourists has decreased by 60 percent compared to the months before the crisis began to be felt, and the volume of business trips to the city has decreased by 50 percent, said Sergei Lyaskovsky, the general director of Tekhnopark VITU, which manages Marshal mini hotel.
The average occupancy of five- and four-star hotels in January has decreased by 25 to 30 percent in comparison to January last year, and that of small hotels has fallen by 15 to 17 percent, said Sergei Kovalyov, executive director of Interconsult consulting firm. 
Alexei Musakin, director of the St. Petersburg branch of the Russian Association of Hotels, said that demand for five-star hotels had decreased in comparison to winter 2008 by 30 to 40 percent, but that this segment had suffered less than the others, since it has many regular clients.
In a time of economic crisis, the hotel has a more flexible approach to its pricing policy, said Belik, adding that standard prices have been discounted up to 15 percent, and group bookings are assessed on an individual basis. Pashkovskaya said that the Grand Hotel Europe has a range of special offers for low season — without reducing prices, more services are included, such as theater tickets. Lyaskovsky said that Marshal had reduced its prices by 20 to 30 percent in January.
Azimut Hotel St. Petersburg has increased its prices by 10 percent compared to last year, said Alexei Dereglazov, the hotel’s director. He said this was due to an increase in utility charges, but admitted that occupancy had decreased. 
Hotels are trying not to reduce their prices, but as a result, occupancy rates are decreasing, said Kovalyov. He said that discounts on group bookings are available of 20 to 25 percent, though a year ago small tour operators could only hope for 10 to 15 percent.

TITLE: In Brief
TEXT: <b>A Trillion for Investment</b>
ST. PETERSBURG (Bloomberg) — The Russian government plans to spend 1.1 trillion rubles ($30 billion) on investment projects this year, Prime Minister Vladimir Putin said.
The government will spend 136 billion rubles on shipbuilding to 2016 and 800 billion rubles on the technology industry, he said at a government meeting in St. Petersburg. 

<b>New Shipyard Planned</b>
ST. PETERSBURG (Bloomberg) — Russia plans to triple orders of state ships in the next six years to 680 billion rubles ($19 billion) and build a new shipyard near the Baltic Sea port of Primorsk, an official said.
The state’s spending should help shipbuilders boost their share of contracts in Russia to 28 percent from eight percent last year and cushion slowing sales to companies, Industry Minister Viktor Khristenko said at a government meeting in St. Petersburg on Friday.
Russia’s biggest natural gas and oil companies, Gazprom and Rosneft, both state-run, will order 307 vessels over the next two decades, Prime Minister Vladimir Putin said at Friday’s meeting. Another 791 transport and 265 fishing vessel orders are expected by 2030, he said.

<b>Oligarchs Warned</b>
LONDON (Bloomberg) — Russian business tycoons, known as oligarchs, will find that they have to sell assets to survive as government funds to bail them out are drying up, the Wall Street Journal reported, citing an interview with Arkady Dvorkovich, a presidential economic adviser.
Dvorkovich said the reality of the global economic situation hadn’t set in for the businessmen and some Russian officials; state aid already provided to some oligarchs wouldn’t be repeated, the Journal reported.
There would be no return to the “easy existence” where because of oil and gas revenues flooding into the country “you could throw money around,” the newspaper quoted him as saying. 

<b>Sakhalin-1 Bid Rejected</b>
TOKYO (Bloomberg) — Russia’s government refused to approve a budget proposal for the Sakhalin-1 oil and natural gas project led by Exxon Mobil Corp. and a Japanese venture, the Sankei newspaper reported, citing unnamed officials.
The project partners were unable to start development work on two of three fields near Sakhalin island that would be the main production sources for its natural gas, Sankei said in the report on its web site.
Russia has called on Sakhalin-1 investors to sell all natural gas from the project to Russian gas export monopoly Gazprom at prices lower than domestic market levels, the report said. Exxon Mobil, the project operator, had planned to construct an export pipeline to China.

<b>Ratings Under Review</b>
LONDON (Bloomberg) — Companies in Russia, Kazakhstan and Ukraine will have their credit ratings “constrained” as the global financial crisis hampers efforts to improve corporate governance, according to Fitch Ratings.
“The general business environment and regulation in these countries does not yet provide a strong foundation for further, sustained corporate governance improvements, and the current lack of access to international funding may reinforce a lack of incentive for development,” Angelina Valavina, analyst at Fitch in London, wrote Monday in a report.

TITLE: VTB Seeks 300% Hike On Shares
PUBLISHER: Reuters
TEXT: MOSCOW — Russia’s second-biggest lender, VTB, wants the government to pay three times the current market price for the bank’s shares during a planned capital injection this year, chief financial officer Nikolai Tsekhomsky said Thursday.
The government has allocated 200 billion rubles ($5.52 billion) to buy shares in VTB to help the bank meet capital requirements in an environment of deteriorating loan portfolio quality and rising bad loan provisions.
The debate over the shape and amount of the government’s support for the banking sector has become one of the reasons Russia still does not have a 2009 budget, with the main issue being the pricing of VTB’s new share issue.
It is not yet clear how much the government is prepared to pay for VTB’s shares. Tsekhomsky said the bank wanted to place new shares at a premium to the market.
“Our proposal is that it makes sense to talk about a premium, not discount, to the current market price,” he said.
Analysts were skeptical about the proposed valuation since it assumed the placement price at about three times the current market price of VTB shares, which have lost over 80 percent since the $8 billion public offering in 2007.
“This valuation is not realistic. But of course, the placement at premium to the market would be positive for VTB. As far as we understand, it is VTB’s proposal, not the government’s,” said Natalya Pushkina from UBS.

TITLE: Affordable Housing Construction Drops
AUTHOR: By Jessica Bachman
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The government will build at least 54 million square meters of living space this year as part of a state-run affordable housing program, a drop-off of 10 million square meters from last year. 
“This is somewhat lower than last year, but the task before us this year will still take an immense amount of effort to achieve,” said Regional Development Minister Viktor Basargin on Thursday at a conference on low-rise construction, Itar-Tass reported. 
“Construction is the locomotive of positive economic growth,” he said. 
Speaking at the meeting, President Dmitry Medvedev urged regional governments to do whatever they can to make land cheaper and increase construction for affordable housing. 
“The regions need to send a direct message: lower the price on land,” Medvedev said. “Land, of course, is our greatest treasure, but in a time of crisis, people should obtain it at a reasonable price.” 
Georgy Poltavchenko, the president’s envoy to the Central Federal District, said his district aimed to boost construction by building more low-rise apartment blocks and individual homes because the structures require fewer capital expenditures and can be built by smaller construction firms without credit from Western banks. 
“Three or four years ago, when we began the national housing project, we started out with much less than we have now but were nevertheless able to double the amount of construction,” Medvedev said, adding that maintaining the rate of construction was a “sufficiently modest goal.” 
In 2008, 64 million square meters of living space were built, or 3 percent less than the 66 million square meters built in 2007. 
The affordable-housing program is one of the government’s four priority national projects — along with education, public health and agriculture — that have received high-profile attention and large amounts of federal funding since their adoption in 2006. 
Last year, the government put 265 billion rubles ($7.4 million) toward the four projects, with 90 billion rubles going to fund affordable housing, according to the government’s national project web site. 
Exact funding figures will be known after the Finance Ministry’s revised state budget is approved later this month. 
Also on Thursday, Basargin said the government is in the process of deciding whether to increase the Agency for Mortgage Lending’s capital by 40 billion rubles ($1 billion) to help keep interest rates on mortgages between 12 percent and 15 percent. 
Arkady Dvorkovich, top presidential economic aide and head of the agency’s supervisory board, said Wednesday that the government plans to help either banks or the agency to get credited at lower rates, about 8 percent for example, Vedomosti reported. This would allow the lenders to set mortgage interest rates at 13 percent or 14 percent, down from their current levels of about 20 percent.

TITLE: Experts Say Reserves Could Be Halved
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s reserves could be almost halved by the end of the year as continued deterioration of the country’s economy forces the central bank to use its “cash cushion” to defend the ruble, RBC Capital Markets analysts said.
Russia’s foreign-currency stockpile, the world’s third-largest after China’s and Japan’s, could drop to as low as $200 billion by the end of 2009 as Bank Rossii is “forced” to sell dollars and euros to prevent further devaluation of the country’s currency, the analysts led by Nick Chamie, head of emerging markets research in Toronto, wrote in a research note on Friday.
The nation’s reserves increased by $2.4 billion to $384.3 billion in the week to Feb. 27, the central bank said last week. Bank Rossii has pledged to prevent the ruble from weakening below 41 against its dollar-euro basket by raising interest rates, curbing bank refinancing and pledging reserves.

TITLE: It’s Only a Question of Price
AUTHOR: By Chris Weafer
TEXT: The second trial of former Yukos CEO Mikhail Khodorkovsky has reignited the debate over whether prominent business scandals — such as the destruction of Yukos, the pressure applied to force a restructuring of Sakhalin-2 or more recently the actions against fertilizer producer Uralkali — cause serious damage to the country’s investment climate or whether the fallout is only temporary. There is no straightforward answer to that question. 
These high-profile cases involving Russia’s commercial titans — plus the hundreds of cases involving ownership issues among the country’s small and medium-sized enterprises — clearly have an impact on investors’ perception of Russia. But this does not mean that investors avoid countries because of high risk alone. 
Investors with a low risk tolerance, such as many pension funds and trust banks, will generally avoid all but the safest assets, and that means generally avoiding emerging markets. For most other investors, it is usually just a matter of price. Put another way, there is a price for everything. 
A good example of this was when Khodorkovsky was arrested in October 2003. The stock market fell sharply, but within six months the RTS Index had hit a new record high. It was not that investors approved the government action against Khodorkovsky, but they better understood the issues and felt comfortable pricing in the risk to asset valuations. 
For investors who accept the risk-reward trade-off in emerging markets, the most important factor is to understand the rules of the game. Then investors can establish a valuation comparison with similar assets where the risk-reward balance is different. 
The equation for companies looking to establish a business in a country like Russia, is not much different. For example, oil companies — historically accustomed to operating in very volatile and high-risk environments — will not be dissuaded from investing as a result of negative events such as Yukos or Sakhalin-2. These cases are more likely to make risk-adverse companies in manufacturing and service industries, for example, more cautious and to delay their investment commitment to Russia. 
Right now, fears over the negative effects of low oil revenues and a declining currency are the most important issues for investors who have already made the commitment to Russia. 
When other investors decide to avoid Russia, they probably place more importance on everyday corruption and the country’s stifling bureaucracy. Nonetheless, the Yukos controversy and others like it play an important part in shaping investor perception. We can see that from the fact that even when Russia’s daily revenue from oil and exports was approaching a record $1.3 billion in early July, the valuation of assets in the country never reached parity with similar assets in other emerging economies. It wasn’t that investors stayed away from Russia; quite the opposite, in fact. In early 2008, the average daily turnover in all Russian equities and related instruments regularly exceeded $10 billion. But because of the blend of risk and reward, those investors were unwilling to pay as much for Russian assets as they did in China, Brazil and elsewhere. 
For the government, investor perception of Russia as a high-risk country is a very serious issue. One of President Dmitry Medvedev’s key programs is to create a diverse economy and to encourage a higher level of foreign investment. 
In July, he urged the government to put an end to the bureaucratic practice of creating “nightmares” for businesspeople, such as needless inspections and various extortion schemes to force businesses to pay bribes to bureaucrats to stay in business. Those nightmares will have to stop if Medvedev’s ambitious program is to be realized. 
No investor expects a risk-free investment environment. Russia is an early stage developing economy, which implies both opportunity for growth as well as high risk. 
But until the surprises that cause the nightmares stop, investors will not be comfortable in assessing the risk-reward balance. That will keep many away, while others, such as those active in Russia today, will come away with a big discount.

Chris Weafer is chief strategist at UralSib Capital.

TITLE: Prudent Should Not Pay For Sins of the Profligate
AUTHOR: The Financial Times
TEXT: Too strictly interpreted, the Maastricht convergence criteria — the rules for euro-zone membership — can begin to look like a suicide pact. The European Union’s newest members are nevertheless required to satisfy them, since they promised that they would eventually join the euro. Unfortunately, the rules keep worthy countries out and lead to policies that are bad for the countries themselves and for Europe as a whole. 
To join the euro, countries must keep inflation and interest rates low, stabilize exchange rates for two years and respect the stability and growth pact, which limits the debts and deficits that governments in the euro zone may incur. The rules were adopted for good reasons: Members of a currency union must protect themselves against inflation exported from more profligate neighbors. 
As it turned out, the pact was really binding only on smaller countries. Big euro-zone countries have flouted it with impunity. Today it is being discreetly forgotten across the euro zone, as it has become too dangerous to enforce it rigidly. 
But the rules remain rigorously enforced on countries outside the euro zone, which increasingly have to choose between sound economic policy and satisfying the Maastricht criteria. For example, euro candidates must keep inflation at most 1.5 per cent above the three lowest rates in the EU; those three rates will probably soon be negative. 
Many new EU members have conducted fiscal policy in an exemplary manner. The Czech Republic and Poland almost meet the criteria. Estonia’s and Bulgaria’s high inflation, in spite of fiscal rectitude, can be blamed on the Maastricht criteria themselves: Maintaining stable exchange rates in a credit boom lays countries wide open to capital inflows that inflate their economies. 
These countries are now under pressure in markets that fear a balance of payment crisis. They can be helped by speeding up euro accession. A quicker pathway into the euro for countries with proven fiscal responsibility, and a plan for fulfilling the rules when economies recover, will itself act to stabilize exchange rates. The EU council should therefore soften the demand for two years’ participation in the EU’s exchange rate mechanism. 
A currency union needs rules. They must in the future be applied more strictly than they have been across the euro zone. But today they must be interpreted flexibly. A prudent Poland should not be made to atone for the sins of profligate Italy. 

This comment appeared as an editorial in the Financial Times.

TITLE: Medvedev’s Sakharov
AUTHOR: By Yevgeny Kiselyov
TEXT: The authorities initiated new legal actions against former Yukos CEO Mikhail Khodorkovsky last Tuesday. Khodorkovsky — once the richest man in Russia, the former owner of the country’s largest and most successful oil company, patron of the arts, philanthropist and dedicated advocate of a liberal path for Russia’s development — became a tragic symbol of the lack of freedoms, the abuses and corruption that has defined Russia under Vladimir Putin’s rule as president and prime minister.
Khodorkovsky was arrested on trumped-up charges in 2003 and sentenced to eight years in prison. The entire “judicial process” was a travesty of justice because the court clearly favored the prosecution and constantly violated the rights of the accused. While Khodorkovsky was behind bars, the government, via state-controlled oil company Rosneft, took control of most of his oil business.
But even an eight-year jail sentence and expropriation of the country’s largest oil company was not enough. On Tuesday, preliminary hearings began in Moscow’s Khamovnichesky District Court involving new charges against Khodorkovsky — that he allegedly stole all of the oil Yukos extracted while he was the company’s chief shareholder from 1998 to 2003. As ridiculous as it may sound, the prosecution claims that Khodorkovsky stole 350 million tons of oil — from himself, effectively.
In recent years, the Putin administration has sought the extradition of former Yukos employees who fled to a host of European countries, from Britain to Cyprus. All of the court proceedings in those countries ended with the same verdict: a refusal to extradite on the grounds that the charges were politically motivated and that the former Yukos managers would face persecution if returned to Russia.
Most observers are pessimistic that Khodorkovsky and his former business partner Platon Lebedev will be acquitted on the new charges. They predict that the pair could be slapped with up to 22 1/2 additional years in prison. 
The new case against Khodorkovsky closely coincides with the one-year anniversary of President Dmitry Medvedev’s term in office. This is very symbolic. 
One year ago, Medvedev’s speeches and public statements about the great value of freedom inspired hopes in liberal circles that a political thaw was in the making. One year later, however, those hopes appear to have been only naive dreams. Far from being able to even slightly modernize or democratize Putin’s rigid power vertical system, Medvedev has shown in his first year in office that he lacks independence and legitimacy.
One year ago, the fate of Khodorkovsky and his colleagues was seen as the main test for Medvedev’s professed liberalism and independence as a leader, but today it seems that Medvedev has failed that test. He has shown no mercy or leniency to any of the Yukos defendants. If Medvedev had the political will or clout, he could have granted Khodorkovsky amnesty, particularly since he has already served over half of his prison term.
On the other hand, there is a perfectly rational explanation why the Kremlin would like to see Khodorkovsky locked up for as long as possible. One of Khodorkovsky’s former colleagues told me that the ruling elite are extremely afraid that Khodorkovsky will seek revenge after the government duped him on several accounts. First, the authorities had assured Khodorkovsky that he would not be arrested, but he was taken into custody in October 2003. Next, they assured him that the court sentence would be suspended, but he was given eight years. Third, they said he would be allowed to serve his prison time near Moscow, but he was banished to a remote, radioactive Siberian city. Finally, the authorities promised not to auction off Yukos’ most valuable assets such as Yuganskneftegaz, but this company was sold in an “auction” that was concocted in such a way that the assets were handed over to Rosneft for a symbolic payment.
The Kremlin’s desire to keep Khodorkovsky locked up extends to Medvedev as well. It is important to remember that Medvedev was the head of Putin’s presidential administration in 2004 and 2005 — a critical period in the Yukos affair when the Federal Tax Service besieged Yukos, Rosneft effectively expropriated Yuganskneftegaz, and the authorities brought criminal charges against Khodorkovsky. Medvedev had to have played some role in all of that, so he also has reasons to fear setting Khodorkovsky free.
Those who still harbor hope that Medvedev will liberalize Russia should consider whether he has serious intentions of reforming the political system. I recall when Soviet leader Mikhail Gorbachev decided in December 1986 to allow dissident Andrei Sakharov to return to Moscow from his forced internal exile in Gorky. As much as I respect Gorbachev, I am convinced he did not take this step because he was such a great democrat and liberal, but because he wanted to send a clear signal to the world. “This regime is changing,” he effectively declared. “The old Soviet Union is becoming a thing of the past.”
But Russia’s current regime has shown no desire to change. Kremlin deputy chief of staff Vladislav Surkov publicly said as much recently. For his part, Medvedev made a small but significant statement in an interview with Spanish journalists earlier this week. He said, “Overcoming the crisis and developing democratic institutions are two different things and they should not be confused.” 
Thus, it seems that Russia’s leaders will not free Khodorkovsky in the near future. On the other hand, there is still a slight chance that the second trial of Khodorkovsky will end in his acquittal. If, by chance, there will be a fully open and impartial trial and if there will be strict adherence to prescribed court procedures, the defendant would surely be found innocent of the ridiculous charges.
If this happens, it will be similar to the Feb. 19 acquittal of the Chechen defendants in the murder trial of Novaya Gazeta journalist Anna Politkovskaya. But if Khodorkovsky is also acquitted, Russia would send the opposite political message: In the Politkovskaya acquittals, the state looked bad; if Khodorkovsky is acquitted, the state would look good — at least in the West. In this sense, Khodorkovsky’s acquittal may be an ideal victory for Medvedev — not unlike when Gorbachev earned points in the West (and clearly within the Soviet Union as well) after Sakharov was freed from exile. 
Since Medvedev doesn’t have the political will or authority to directly influence the Khodorkovsky affair — by granting amnesty, for example — an acquittal would make Medvedev look good without having to make any politically risky decisions at all.

Yevgeny Kiselyov is a political analyst and hosts a political talk show on Ekho Moskvy radio.

TITLE: A Question of Trust
AUTHOR: By Anna Shcherbakova
TEXT: Like many ills, the ruble devaluation was to be expected, but nevertheless took people unawares. Last spring and summer, the exchange rate of the U.S. dollar to the ruble was extremely low, and everyone from bankers to the deputy prime minister advised people to keep their savings in rubles. According to statistics, many people (or “the population,” as the big cheeses like to say) preferred ruble deposits to foreign currency accounts. Then the national stock market dropped, confirming that Russia, as a part of the international market, cannot remain aloof from the world’s financial difficulties. The word “crisis” came a little later, along with mild panic. 
In the fall, private depositors switched to dollars and euros. For several months, the Russian authorities supported the domestic currency at the cost of one third of reserve stock. In January it finally gave up, and the ruble sank. Now it is worth about three U.S. cents, and is about 30 percent cheaper than it was in the summer. This doesn’t look like the end of the ruble devaluation. More than 90 percent of companies, including subsidiaries of foreign ones, pay ruble-nominated salaries as a result of the dollar’s former decline, so the income of their employees is sadly decreasing. 
Decreasing oil prices and the seizure of global capital markets of course influence the value of the ruble. But there are other factors, more psychological ones, that can be generally described as “trust.” Foreign investors do not trust the Russian economy, which has unpredictable rules and is uncompetitive in most industries except the mining of natural resources. As a result, net private capital outflow from Russia reached $130.5 billion in the fourth quarter of 2008. But the third most unpleasant aspect is a lack of, let’s say, domestic trust. Russian companies prefer to keep their cash in dollars, converting them only when they need national currency for tax payments. Russian depositors, also known as “the population,” do not trust the national currency either. They are not afraid of murky forecasts about the dollar’s decrease. Although the assortment of foreign currencies in which bank deposits can be made in Russia is pretty narrow, banks are targeting growing demand by proposing multi-currency deposits, where the proportion between euros and dollars can be changed quickly and easily. 
The dollar will survive anyway, assured a friend who left St. Petersburg for Maryland ten years ago. One cannot blame him for becoming an American patriot — the country’s financial system is managed rather cleverly. A lot of people there trust the national currency, and American bank deposits are made only in dollars. 
Francis Fukuyama described the system of advanced countries in his book “Trust” as enormous prosperity driven by technology-driven capitalism, which serves as an incubator for a liberal regime of universal and equal rights. I dare to compare real trust in the national currency to honest and unpredictable voting, in which no one knows the result in advance. During its years of prosperity, Russia has become unaccustomed to such voting. People have become a “population” that is to be manipulated or entertained just before the elections and dumped the next day. When there is no fair play in politics, people extend their skepticism to other parts of official state symbols. 

Anna Shcherbakova is the St. Petersburg bureau head of business daily Vedomosti.

TITLE: Urals City Hit by Crisis Sees Small Business as Cure
AUTHOR: By Nadia Popova
PUBLISHER: Staff Writer
TEXT: KRASNOTURYINSK, Sverdlovsk Region — With eight unemployed workers sparring over every job opening in the Sverdlovsk region, laid-off workers are emerging from state-backed retraining programs with dreams of opening their own confectionaries, cell phone repair shops and even McDonald’s restaurants. 
The Sverdlovsk government is offering more than 250 “Start Your Business” seminars across the Urals region for the next two months in the hope of reviving the local economy by convincing people to create their own jobs instead of looking for work. 
But existing small business owners have a word of advice for the would-be private entrepreneurs: The regional government may make it sound attractive to be your own boss, but the grim reality is that the job involves problems with bank loans, profitability and bribes. 
Those concerns seemed far from the minds of the several dozen unemployed Krasnoturyinsk residents who attended a recent “Start Your Business” seminar, desperate for any kind of job. 
“I am thinking about opening an engineering design bureau,” said Nadezhda Molostova, 52, who for 20 years worked in industrial design at Bogoslovsky Aluminum Plant, one of the country’s biggest smelters and owned by United Company RusAl. She lost her job in January. 
“There were about 30 people who were fired with me, and they want to join my firm,” Molostova said after the seminar held at the municipal employment center in Krasnoturyinsk, a town of 65,000 located 450 kilometers north of Yekaterinburg. 
The local trade union said 230 people have been dismissed from the plant and related service companies, while the employment center puts the figure at 424. RusAl’s Moscow office did not reply to repeated requests for clarification. 
The Sverdlovsk government has 60 million rubles ($1.7 million) on hand to spend on the seminars, which they hope will retrain 5,000 people to become private entrepreneurs and provide them with seed capital, up from 3.3 million rubles in 2008, the government’s committee on small and medium-size business development said in an e-mailed answer to questions. It has asked the Economic Development Ministry for an additional 240 million rubles for the program, part of a national jobs stimulus program spearheaded by the federal government. 
“This is sort of an MBA for free and mainly based on practice, with no sophisticated theory,” said Dmitry Postnikov, who is teaching the retraining seminars in Krasnoturyinsk and heads City Hall’s entrepreneurship support fund. “We will also help by providing advice over the next 1 1/2 years.” 
Seminar graduates will be eligible to receive a grant of up to 300,000 ($8,344) rubles by providing a business plan approved by the administration of his city. In addition, the new entrepreneur will receive one year’s worth of unemployment payments — about 70,000 rubles — to invest in his business from the employment center of the city where he lives. 
Similar seminars are to be offered all around the country, the Economic Development Ministry has said. 

Trainees Speak Out 
“This money is not enough to open your own business these days,” complained Alexei Bedrikov, 38, a seminar attendee who repaired melting pots at the Bogoslovsky plant until he was laid off two weeks ago. “I would like to open an inexpensive confectionary because we don’t have one in town. But the money from the government is far from enough.” 
Postnikov, who will be responsible for tracking the use of the money in Krasnoturyinsk, said he knew examples of people opening their own shops for less than 300,000 rubles and acknowledged that starting and managing a business would not be easy during the crisis. 
“I told them not to put on rose-colored glasses,” Postnikov said of the people at his seminar. “Being a businessman is hard work, especially today.” 
It appears to be especially hard to operate small businesses in one-factory towns like Krasnoturyinsk and Tolyatti, where life revolves around the AvtoVAZ carmaker. Russia has about 600 of those towns, and local demand there for many goods and services is close to zero, entrepreneurs said in interviews conducted in five of the towns in recent days. 
Molostova, the woman considering opening an engineering design bureau, said she understood that there would not be many orders from private clients any time soon. “The government has said it would invest in infrastructure to create jobs, so we could design projects for them,” said Molostova, a trim woman wearing glasses and a gray suit. 
Other attendees were more down-to-earth with their ideas. 
“I want to open a business that would make a profit even in times of crisis — a cell phone repair shop,” said Sergei Katkov, 21, who was fired last month from BAZ-SUAL-Remont, a RusAl-controlled company that performs repairs at the Bogoslovsky plant. “I would never think about opening my own business before, but it is a good time now.” 
Katkov said he was also considering opening a McDonald’s but had to analyze how popular the fast-food restaurant would be in the town. 
Some people said they could not afford to wait for retraining to open their own businesses. 
“We wanted to have a plan B,” said Natalya, the 42-year-old wife of a bauxite miner in Kalya, a village located about 20 kilometers from Krasnoturyinsk and populated by workers from RusAl’s bauxite mines. 
“If my husband gets fired, we will have nothing to live on and nowhere to find other work,” said Natalya, standing at the counter of her new shop. She refused to give her last name, saying she didn’t want to draw attention to her husband. 
RusAl has said it would cut aluminum output by 11 percent and production costs by 34 percent. But the company said in an e-mailed statement that it would not dismiss anyone at its bauxite mines, which employ about 5,000 people and supply the Bogoslovsky plant. 
“Since there is a crisis, I have decided to sell something that people will buy no matter what,” Natalya said, showing an assortment of dry goods, including seeds, notebooks, woolen socks and lingerie. 

‘The Future: Small Business’ 
People like Molostova and Natalya are the future of the local economy, said the head of the Krasnoturyinsk employment center, Oksana Ivanova. “We believe that opening a business is the only way to fight unemployment in our region,” Ivanova said. “There will be no other jobs for people fired by the metal plants.” 
The region’s main employers are metals giants like RusAl, Urals Mining and Metallurgical Company and Magnitogorsk Iron and Steel Works, which have laid off hundreds of people and cut the salaries of thousands more as global prices for aluminum, copper and steel have tumbled in recent months. 
The unemployment rate in the Sverdlovsk region grew from 4.8 percent, or 116,600 people, in October to 5.9 percent, or 140,300 people, as of the end of February, according to International Labor Organization standards. The Sverdlovsk government expects unemployment to increase to 190,000 people this year, according to forecasts prepared by the regional employment center. 
The number of job vacancies fell to 13,758 in February from 46,008 in October, and the region’s economy shrank by 25 percent in January, according to the latest data available. 
Hard times mean that people need to think about taking jobs that they never would have considered before, said the speaker of Krasnoturyinsk’s legislature, Valery Koltsov. 
“The crisis is a time of surprise changes,” Koltsov said. “Our mechanics, for example, are becoming milkmen. So why not become a businessman?” 
Koltsov said small and medium-size businesses provided 6 percent to 7 percent of the city’s taxes, and City Hall is pinning its hopes on them. “They are our engine in the crisis,” Koltsov said. “It would be great if every business took on unemployed workers.” 
Nationwide, small businesses generate an estimated 15 percent of gross domestic product. 
The federal government plans to spend a total of 3 billion rubles this year supporting new businesses, which it hopes will create 50,000 new jobs. It has told regional governments to try to convince up to 10 percent of unemployed workers to start small businesses. 
The Sverdlovsk regional government has earmarked 250 million rubles to support small and medium-size businesses this year, up from 85 million rubles in 2008, and has asked the federal government for an additional 589 million rubles. The money is to be spent on state loan guarantees, microloans, loan refinancing and other financial products. 
The focus on private entrepreneurship is a reversal for regional authorities, who have largely ignored small businesses nationwide for years. With this in mind, several Krasnoturyinsk small business owners advised potential entrepreneurs to think twice before opening shop. 

Owners’ Grim Stories 
Karapet Margaryan, owner of the Armenian Cuisine cafe in central Krasnoturyinsk, said his rent was increased nine times to 14,000 rubles in January and his profit halved. “I’ve been here for almost 10 years selling shashlik and khinkali but don’t know what will happen now,” said Margaryan, 49, sitting in his almost empty cafe. 
“I have always been cautious. I did not take out any loans and have been very kind to our customers,” said Margaryan, who has three children to feed. “None of it helps now.” 
Galina Kukina, the owner of two food shops in Krasnoturyinsk, said she had not seen any drop in demand but was in trouble because of her bank loans. She does not have the money to make a final payment of 300,000 rubles on a 2 million ruble loan this month. 
“If I don’t pay, I will spoil my credit history and cut off access to any bank loans, which are vital for my business,” Kukina, 38, said sitting in her small office at the back of one of her shops, a Kopeika. 
Kukina took the loan from Metkombank, a local bank, and planned to refinance it this winter. But she was unable to do so because a national credit crunch forced most banks to essentially close their loan programs. 
Ursa-Bank’s Krasnoturyinsk office is only offering loans to entrepreneurs who sell food — widely seen as the most stable business in a crisis. The interest rates on the loans range from 32 percent to 36 percent, up from about 17 percent before the crisis. 
“I will agree to pay 30 percent or more — it doesn’t matter. Just so the banks give me money,” Kukina said. 
Kukina is waiting for a 700,000 ruble loan from the Urals Bank of Reconstruction and Development, which approved her application in December. But she has not heard back from the bank since then. 
“They call it an express loan,” she said, smiling sadly. “But now, there is a waiting line for the money, and my city’s turn hasn’t come yet.” 
Kukina said local inspectors have not lowered their demands for bribes because of the crisis. “They still come for extra inspections and take their money,” she said. 
Government inspectors from fire, sanitary and other services are notorious for threatening to close small business if they don’t pay bribes. 
Koltsov, the legislature speaker, said City Hall was doing “all it could” to improve life for small businesses but conceded that there was a problem with rising rents and a scarcity of bank loans. “We are working on changing the rent prices but can do nothing with the banks,” Koltsov said. The city owns the land under its central market, but many other shops pay rent to private landlords. 
The government’s promises of support ring hollow to Igor Konyushkin, owner of the Shpilka, or The High Heel, shoe shop in Krasnoturyinsk. “They always promise to help, and then we see nothing,” said Konyushkin, 47. 
Konyushkin said the ruble’s devaluation is forcing him to raise prices significantly on his imported footwear, and he worries that no one will buy. “Who will buy boots for 9,000 rubles now?” he said. 
The ruble has lost a third of its value against the dollar and 24 percent against the euro since November. 
Another problem for entrepreneurs is that some wholesalers are offering a smaller assortment of goods and rationing what they stock, said Yelena Volosatova, who rents a food stall in the pavilion at Krasnoturyinsk’s central market. “I used to buy a wide range of tea at the wholesale store but can only get one kind now, because they are afraid that they won’t sell more,” she said. 
“They give me three boxes a day, but I could buy as much as I wanted before the crisis,” she added. 
Volosatova, 41, opened her shop a year ago after her husband was jailed over a traffic accident, leaving her to raise their 8-year-old child alone. She said she made a net loss in January and a tiny profit of 20,000 rubles in February. “Of my 20,000 ruble profit in February, I paid 12,000 rubles for rent and made additional payments for the pension fund and taxes,” she said. “I have almost nothing left.” 
Nonfood products were barely selling at the market, vendors said. “We sell almost nothing on weekdays and a little on the weekends,” said Yelena, 43, shivering from the cold in a tent-like booth outside the pavilion. “But we have to be optimistic,” she said, smoothing a row of men’s underwear stitched with “U.S.S.R.” in the front. “Times change.”

TITLE: Swiss ‘Gigolo’ in Court in Blackmail Case
AUTHOR: By Karin Matussek
PUBLISHER: Bloomberg
TEXT: MUNICH — A Swiss man confessed to blackmailing Susanne Klatten, Germany’s wealthiest woman and heiress to automaker BMW’s controlling family, with threats to distribute a video taken during their two-month affair.
Helg Sgarbi, 44, told a court in Munich on Monday that he “apologizes” for the harm he caused Klatten and other women. Sgarbi, who worked at Credit Suisse Group from 1992 to 1996, admitted to defrauding Klatten out of 7 million euros ($8.8 million) and two other women of 2.4 million euros.
The indictment against Sgarbi lists Klatten and three other affluent women whom he had affairs with as victims of attempted extortion and fraud. Klatten, 46, married with three children, informed the police about Sgarbi’s actions, starting the case against him.
“I regret it deeply and apologize in public to the victims,” Sgarbi said after the charges were read in court.
Sgarbi threatened to send a video of a tryst to Klatten’s husband, the press and the boards of companies she holds, according to the indictment. Klatten, who had tried to avoid publicity her entire life, was thrust into the spotlight after the investigation was leaked to the press in the fall.
After the confession, the court only heard one witness and then asked prosecution and defense for closing arguments. Prosecutor Thomas Steinkraus-Koch sought nine years in prison for the defendant. Egon Geis, Sgarbi’s attorney, said the court should give a sentence of around five years.
Sgarbi, who holds a Swiss law degree, worked for Credit Suisse in departments including mergers and acquisitions, according to documents read in court. The court will issue a verdict and possible sentence later today.
Klatten owns a 12.6 percent stake in Bayerische Motoren Werke AG as of January, according to Bloomberg data. Along with her mother Johanna Quandt and brother Stefan Quandt, the family owns 46.6 percent of the Munich-based carmaker. Klatten also controls 88.3 percent in chemical maker Altana AG. She ranked 55th on Forbes magazine’s list of the world’s wealthiest people, with a $13.2 billion net worth.
Prosecutors claim Sgarbi systematically approached married women in luxury resorts in Austria and Switzerland with the aim of starting an intimate relationship. After seducing the women, Sgarbi told them he’d gravely injured a child in a car accident and needed to pay millions to get out of trouble, according to the indictment.
“There was a moment of clarity: You’re a victim and you have to fight back,” Klatten told the Financial Times Deutschland in her first ever personal interview in November.
Sgarbi declined to answer questions in court Monday on the whereabouts of the money or the videos. He also didn’t explain the role of his alleged accomplice, Ernano Barretta, who has been charged in Italy. An Italian court will review the charges against him this month.

TITLE: Roddick Secures Another U.S. Victory in Davis Cup
PUBLISHER: The Associated Press
TEXT: BIRMINGHAM, Alabama — The United States turned to Andy Roddick to put away another Davis Cup, and he delivered — as usual.
Roddick swept past Switzerland’s Stanislas Wawrinka in straight sets to give the U.S. an opening round victory Sunday in the best-of-five series, pretty much wiping out any final-day drama.
Roddick, ranked sixth in the world, is now 11-0 with a chance to close out a Davis Cup series. If he felt any pressure from teammate Mike Bryan’s guarantee of a Roddick win a day earlier, it didn’t show on the court.
“I was sitting there putting my shoes on and (Bryan) goes, ‘I guarantee a victory,”’ Roddick said. “I kind of progressively got tighter and tighter as he was talking. But I guess it would have been easy to blame him if I had lost.
“I guess he ended up looking smart.”
Then again, Bryan wasn’t really going out on a limb with Roddick playing with a 2-1 lead.
This win was emphatic: 6-4, 6-4, 6-2 — and 4-1 for the U.S. Next up for the U.S. is Croatia in the quarterfinals on July 10-12, just after Wimbledon.
Roddick wasn’t overly impressed by his perfect record as a closer.
“In order to clinch, your team has to put you up 2-1,” Roddick said. “I’ve always had a chance to play that fourth match. A lot of it is circumstantial and the way the schedule and draw plays out. I’ve gotten a lot of chances to do that.
“I’ve simplified the way I look at it. You come in and regardless of what the score is — everyone makes a big deal about it and obviously it’s extremely relevant, but at the same time I’ve got to come out and try to win a point each day I play.”
Roddick’s 31st Davis Cup win moved him past Andre Agassi into second place on the U.S. list, 10 behind John McEnroe. That accomplishment made more of an impression.
“I’m kind of a nerd about the history of our sport,” he said. “It was kind of in the back of my mind. There’s probably a few moments in your career where you can sit back and be a little impressed.
“When you get mentioned with Andre, who I grew up watching … Andre was always the guy that every one leaned on to come through. To kind of surpass him now is extremely surreal, but it’s definitely one of those fun moments also.”
Dominating with his serve, he faced only one break point during the match and had 14 aces.
The U.S. has won 20 consecutive matches after taking a 2-1 lead. The Americans didn’t have to contend with an absent Roger Federer in this one, since the Swiss star was out with back problems.
U.S. Captain Patrick McEnroe found plenty to be impressed about with Roddick’s game.
“I think he’s improving, which is awesome to see,” McEnroe said. “Obviously he has delivered again in a crucial situation for us.”
James Blake then topped Marco Chiudinelli 6-4, 7-6 (6) in a best-of-three match for the final margin. Blake opted to play even though it wasn’t a live rubber match.
“It’s still the pressure of a Davis Cup,” he said. “You’ve got the big crowd, so I’ll be ready one of these days if there is a live fifth rubber.”
Roddick now has a 21-2 match record at home in the Davis Cup, including nine straight wins. He also breezed by Chiudinelli on Friday.
In other first-round series, Israel, Czech Republic, Russia, Germany and Spain won Sunday to reach the quarterfinals. Croatia and Argentina advanced Saturday.
Israel made the quarters for the first time since 1987, winning both singles matches to oust seven-time champion Sweden 3-2 in Malmo. Harel Levy beat Andreas Vinciguerra 6-4, 4-6, 6-4, 3-6, 8-6 in a series overshadowed by political protests and played in a nearly empty arena. Earlier, Dudi Sela evened the score by edging Thomas Johansson 3-6, 6-1, 4-6, 6-4, 6-2.
Only about 300 guests were allowed to watch because city officials said they couldn’t guarantee security. On Saturday, rock-throwing protesters bent on stopping play clashed with police in an attempt to storm the arena.

TITLE: Beckham Keen for Final World Cup
PUBLISHER: Agence France Presse
TEXT: LONDON — David Beckham has revealed his dream of playing for England in the 2010 World Cup in South Africa was the motivation behind his desire to stay with AC Milan.
After weeks of negotiations, Beckham has extended his loan with Milan from Major League Soccer side LA Galaxy until the end of the Italian season in an attempt to prove to England coach Fabio Capello that he can still perform at the highest level.
The former Manchester United and Real Madrid star is desperate to have one last crack at winning the World Cup in next year’s finals, but he had been reduced to a bit-part role for England since his move to America.
His switch to the San Siro has kept Beckham in Capello’s thoughts and he made a record-equalling 108th England appearance in last month’s friendly against Spain.
Beckham, 33, will return to California to see out the rest of the MLS season after finishing Milan’s campaign. He is set to return to Italy for the 2009-10 season, providing him with a platform to impress Capello, and he believes staying with Milan will help his England ambitions.
“There’s a few reasons for staying with Milan. One is I’m playing with one of the biggest clubs in the world and with some of the best players in the world. I’m passionate about that,” Beckham told the BBC.
“Obviously the one everyone talks about is it gives me a chance to play in the 2010 World Cup. I personally have to do everything I can to be involved in that.
“Everyone knows how passionate I am about playing for my country and if this gives me a better chance of being involved in that squad that’s great.”
Negotiations for Beckham to stay were slowed after Milan baulked at the size of transfer fee demanded by Galaxy, thought to be around 12 million euros.
Beckham hinted that reports he paid three million dollars to make up the difference between the fee Galaxy wanted and the price Milan were prepared to pay were on the mark.
“I’ve done really well in my career and played for so many great clubs. I’ve been able to help myself stay in Milan, if I can put it that way. That is the big thing for me,” he said.
“It’s never been about money for me. It’s been about football and my passion for the game. Hopefully this has shown it.
“Everybody knew how much I wanted this to happen and how much I wanted to stay and play my football in Milan. Obviously the Galaxy have been great and Milan have been great.
“I want to stay in Milan to help the club qualify for the Champions League.
“It also gives me a chance to go back to LA and finish the season. It is something I am very committed to. Then after that we will see.”
Beckham insisted his move to California has not been a mistake.
“People have always asked me if I’ve regretted my decision. Throughout my career I’ve never wanted regrets and I’ve always said no,” he said.
“At the time I felt it was the right thing to do. I’ve had two great years with the Galaxy. We might not have been successful on the field but statistics show the game has grown.”

TITLE: British PM In Ireland After Killing
AUTHOR: By Anne Cadwallader
PUBLISHER: Reuters
TEXT: ANTRIM, Northern Ireland — Prime Minister Gordon Brown visited troops in Northern Ireland on Monday after a republican splinter group killed two British soldiers in the worst attack in the province in a decade.
Police ramped up the hunt for the killers of the two soldiers who were shot dead late on Saturday as they collected pizzas at the gates of an army base near Antrim, a commuter town outside Belfast.
“You never stood a chance, gunned down by cowardly scum,” read one of wreaths of flowers laid outside the barracks.
Brown has promised to “bring the murderers to justice” and on Monday visited the army base where the attack took place. The soldiers were the first British troops to be killed in the province since 1997.
A caller to the Dublin-based Sunday Tribune on Sunday claimed responsibility for the shooting in the name of the South Antrim brigade of the Real IRA.
A splinter group that left the main Irish Republican Army (IRA), the Real IRA wants a united Ireland and the withdrawal of all British troops from the province.
Former foes across the sectarian divide vowed the killings would not plunge the province back into violence seen before a 1998 peace deal ended 30 years of conflict, known as “The Troubles,” which killed over 3,600 people.
The IRA agreed to ceasefires under the 1998 deal.
Despite a power-sharing pact between IRA ally Sinn Fein and the Democratic Unionist Party in 2007, which cemented the 1998 accord, sporadic violence has continued.
“A vast majority of people in Northern Ireland want to stick with the peace, want to stick with the political process,” Home Secretary Jacqui Smith said on Monday.
“It’s extremely important that that happens as well as we catch these people,” Smith told GMTV.
The weekend shooting followed a police warning last week that the threat from IRA splinter groups was again high.
The Real IRA carried out the deadliest single bombing of Northern Ireland’s sectarian violence in the market town of Omagh in August 1998. Twenty-nine people were killed.
At the end of January police defused a 300-pound (140 kg) car bomb been left by dissident republicans in a Northern Irish village.
“Any resumption of violence in Northern Ireland will cause inestimable damage to the peace process, prevent foreign investment and contribute to rising unemployment,” the Dublin-based Irish Times wrote in a editorial.
“There should be no return to the dark days of the past,” it said.
British troops stood down in 2007 after their 38-year role supporting police in the province, ending their longest military operation ever.
A maximum of 5,000 military personnel as part of a “peacetime garrison” is stationed in Northern Ireland. The two soldiers who were killed were in their 20s and due to fly out for duty in Afghanistan.

TITLE: N. Korea Military at Ready As U.S., South Start Exercise
PUBLISHER: Agence France Presse
TEXT: SEOUL — North Korea put its military on combat alert Monday as U.S. and South Korean forces started a major joint exercise which the communist nation has branded as a prelude to invasion.
The North, which is preparing what it calls a satellite launch, also warned that any attempt to shoot down the rocket would be treated as an act of war.
It then severed its last communications channels with South Korea, leaving more than 700 people unable to cross the heavily-fortified border to a joint industrial complex at Kaesong just to its north.
The moves follow a threat last week against South Korean civilian airlines using the North’s airspace, which has forced them to re-route flights.
South Korean President Lee Myung-Bak was briefed Monday by his top security officials on the latest statements.
Pyongyang has repeatedly accused Seoul and Washington of using the annual exercises, which this year will last until March 20, as a pretext to launch an attack on it — a claim denied by the United States and the South.
In a statement carried by the state Korean Central News Agency, the Korean People’s Army described the exercises as “unprecedented in the number of the aggressor forces involved and in their duration.”
“The KPA Supreme Command issued an order to all service persons to be fully combat-ready,” the statement said.
“A war will break out if the U.S. imperialists and the warmongers of the South Korean puppet military hurl the huge troops and sophisticated strike means to mount an attack.”
The North added in a separate statement that it would cut off North-South military communications during the exercises, as maintaining normal channels would be “nonsensical.”
South Koreans cannot cross the border without approval by North Korea via the military communications lines.
“Our government regrets” the measure, unification ministry spokesman Kim Ho-Nyoun said in Seoul, calling on Pyongyang to withdraw it immediately.
The joint exercise involves a U.S. aircraft carrier, 26,000 U.S. soldiers and more than 30,000 South Korean troops.
It comes at a time of high tension with the South and growing pressure on the reclusive North to end its nuclear weapons program and drop any plans to test its longest-range missile.
Although North Korea says it is preparing to fire a rocket for a satellite launch, Seoul and Washington believe the real purpose is to test a Taepodong-2 missile that could theoretically reach Alaska.
The North Korean army’s General Staff said it would retaliate “with prompt counter-strikes by the most powerful military means” if there was any attempt to intercept the satellite.
Japan said last week that it was prepared to shoot down any rocket headed toward its territory, and Admiral Timothy Keating, who commands the U.S. Pacific Command, said interceptor ships were ready “on a moment’s notice.”

TITLE: PAOK Fans Clash With Riot Police At Olympiakos Match
PUBLISHER: The Associated Press
TEXT: THESSALONIKI, Greece — Seven riot policemen and five PAOK fans were injured during clashes before and after Sunday’s game with Olympiakos in the Greek league.
PAOK fans resumed clashes with riot police outside the stadium following the scoreless game, pelting them with rocks and bottles, erecting barricades and burning trash cans. Several arrests were made, police said.
Before the game, three riot police had been injured during an hour-long attack by PAOK fans who threw rocks, bottles and firebombs.
Fans, most of them without tickets, had gathered outside PAOK’s stadium to ambush Olympiakos’s team bus on arrival.
A heavy police presence prevented them from doing so, prompting fans to attack officers. A police vehicle was set on fire and three officers were slightly injured, according to police, who used copious amounts of tear gas to disperse the fans.
PAOK fans also attacked and smashed referee Anastassios Kakos’s car.
Tear gas was also used inside the stadium when PAOK fans threw several projectiles at Olympiakos players who came onto the field to warm up. Some fans left their seats and came onto the field to get away from the tear gas in the stands.
Olympiakos players were eventually able to return to the field as the 28,700-capacity crowd finally settled down. About 1,000 riot police were inside the stadium, with hundreds more patrolling outside.
The game’s start was delayed.
Police concern about violent incidents, which often occur at Greek soccer matches, was heightened after the two teams played in a Greek Cup match last Wednesday.
The potential for violence has led to three prosecutors attending the game to report on any incidents.

TITLE: Tsvangirai Says Car Crash Accidental
PUBLISHER: Reuters
TEXT: HARARE — Zimbabwean Prime Minister Morgan Tsvangirai on Monday ruled out foul play as the cause of a car crash that injured him and killed his wife, easing concerns it may increase tensions in the new government.
The tragedy comes at a difficult time for Tsvangirai, who is under pressure to rescue the shattered economy in a new unity government with President Robert Mugabe, his old rival.
“In such incidents there is always speculation but in this case I want to assure you that if there was any foul play it would probably be one in 1,000,” he told mourners after returning home from medical treatment in Botswana.
“It was an accident which unfortunately took a life. I am sure that life has to go on and I’m sure she would have liked for life to go on,” he said, referring to his late wife Susan.
Many Zimbabweans are suspicious about Friday’s crash on a dangerous potholed highway, neglected like many others during the southern African country’s economic decline.
The driver of the truck that slammed into Tsvangirai’s vehicle and forced it to roll off the road appeared at a court in Chivhu, 150 km south of Harare, on Monday, accompanied by three plain-clothed policemen.
Chinoona Mwanda’s application for bail was granted and he was remanded to return to court on March 23, said his lawyer Chris Mhike.
Tsvangirai’s wife of 31 years, a pillar of strength during 10 often trying years of opposition to Mugabe, is expected to be buried on Wednesday.
“It will be difficult to fill in the gap. We have gone through trials and tribulations together, I know it’s painful, but let’s mourn with hope,” said Tsvangirai, his face swollen from injuries sustained in the crash.
Questions may arise over how quickly Tsvangirai can recover from the loss and get down to the urgent task of easing an economic crisis squeezing millions of Zimbabweans.
“I don’t think this will have any significant impact on the inclusive government and how he operates in it, except that the MDC should now demand higher security for the prime minister,” said political commentator and Mugabe critic John Makumbe.
Mugabe’s ZANU-PF and Tsvangirai’s MDC signed a power-sharing deal in September then formed a government seen as a chance to rescue once prosperous Zimbabwe, ruled by Mugabe since independence from Britain in 1980.
Tsvangirai must find a way to work with Mugabe and win over Western donors who insist on democracy and economic reforms in Zimbabwe before providing crucial aid. The arrest of activists and other issues have created friction between them.
Zimbabweans are suffering from the world’s highest inflation rate and severe food and fuel shortages and they were hoping a new leadership would ease their deepening hardships.