SOURCE: The St. Petersburg Times
DATE: Issue #1477 (39), Tuesday, May 26, 2009
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TITLE: Russia 
Diagnoses
2nd Swine Flu Case
AUTHOR: By Alexandra Odynova
PUBLISHER: The Moscow Times
TEXT: A Kaluga man who returned from his honeymoon in the Dominican Republic has been hospitalized with Russia’s second confirmed case of the A/H1N1 influenza virus, also known as swine flu, health authorities said. 
The man, 25, and his wife flew into Moscow from the Dominican Republic on May 19 and sought medical attention after feeling ill, though he was hospitalized only on Thursday, the Federal Consumer Protection Service said in a statement late Sunday. 
“His wife has been placed under medical observation, but no signs of the virus have been confirmed,” the agency’s chief, Gennady Onishchenko, told Interfax. “The man’s condition is satisfactory.” 
Four of the infected man’s relatives who had contact with him are also undergoing medical examinations, Onishchenko said. 
The announcement came just two days after Onishchenko confirmed the first case of swine in Russia. A 28-year-old man who works at a New York university was hospitalized Wednesday night, two days after he had flown into Moscow from New York to visit his relatives. 
The condition of the patient, a resident of the Moscow region town of Zhukovksy, has improved significantly, and he was to be released from the hospital as early as Monday, Interfax cited an unidentified health official as saying. 
The unidentified man passed a medical check when he arrived at Sheremetyevo Airport last Monday on a Delta Air Lines flight from New York but began to feel unwell Wednesday and was hospitalized that night, said Gennady Onishchenko, the country’s chief epidemiologist. 
Subsequent tests confirmed that he was infected with the virus, Onishchenko said Friday. 
It was unclear how he contracted the virus, which has caused a global health scare and has been linked to nearly 100 deaths. 
The Federal Consumer Protection Service, which Onishchenko heads, said it believed that the patient had come into contact with someone infected with the virus before leaving for Russia. The man is in a satisfactory condition and is under observation at Infectious Clinical Hospital No. 1, Onishchenko said. “He is feeling OK,” he said, Interfax reported. “He is getting adequate treatment. He has no fever, and his condition is satisfactory.” 
Everyone who has come into contact with the patient has been placed under observation, Onishchenko said. 
It was not clear whether that included other passengers on the man’s flight. Delta and Sheremetyevo spokespeople could not be immediately reached for comment Sunday. 
The World Health Organization said Saturday that Russia had notified it about registering its first case of swine flu. 
The WHO recommends Tamiflu and Relenza to treat swine flu, and Russian demand for the medications soared over the weekend in light of the first case, Vedomosti reported. 
Onishchenko said the patient had been working in a New York university since September and that his family lives in Zhukovsky, a Moscow region town 40 kilometers southeast of Moscow. 
“All his relatives are healthy,” Onishchenko said. 
At least 12,022 swine flu cases have been registered in 43 countries, leading to a total of 86 deaths, according to the WHO. More than half of the confirmed flu cases are in the United States. 
Russian officials have been screening flights from the United States, which arrive in Sheremetyevo and Domodedovo airports, even though the WHO has warned that the checks cannot accurately detect ill passengers or curb the spread of the virus. 
Onishchenko said more than 1,805 flights with 133,000 passengers and 12,700 crew members arriving in Russia from abroad have been screened at nine of the country’s airports since swine flu broke out in early May. 
On Friday alone, more than 6,000 people were checked upon arrival from what his agency calls “countries of concern,” including all North and South American countries as well as Spain and Japan. 
Passengers arriving from these countries are having their temperatures checked by remote sensors, and those with high temperatures are being hospitalized and tested for the virus, Onishchenko said. 
More than 20 passengers have been identified as having symptoms similar to swine flu, but all of them have been cleared in subsequent tests, he said. 
Most recently, a man was hospitalized on Saturday after he arrived on a Delta flight from New York. Onishchenko said Sunday that tests had found that the man did not have swine flu, RIA-Novosti reported. 
His agency, though, has instructed Sheremetyevo to expand the number of its medical staff checking passengers in light of the first confirmed swine flu case.

TITLE: No Kremlin Guarantee of Gas for the EU
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia cannot guarantee that there will be no halts in gas supplies to Europe, President Dmitry Medvedev warned at a news conference closing an EU-Russia summit in Khabarovsk on Friday.
Further raising the specter of a new gas shut-off, Prime Minister Vladimir Putin separately indicated that the country would not extend any loans to Ukraine. Ukraine’s failure to pay for Russian gas resulted in the halt of deliveries to more than 20 European countries in January.
“Russia has offered no assurances and will not offer any,” Medvedev said when asked about the possible suspension of gas supplies to Europe later this year. “What for? There are no problems on our part. ... Let the one who pays for the gas offer assurances.”
Adding to the tension, Medvedev said he had doubts about Ukraine’s ability to pay for gas this year. “If the Ukrainian side has got the money, that’s great. But we have got some doubts about the solvency of Ukraine,” he said. 
Ukraine currently needs about $4 billion to pump 19.5 billion cubic meters of gas into its underground reserves, Medvedev said. 
Putin gave different figures later in the day, saying Ukraine needed about $5 billion.
“The gas should be pumped in now, because it will be impossible to pump it in the needed volumes later,” Putin said in the Kazakh capital, Astana, after talks with Ukrainian Prime Minister Yulia Tymoshenko. The prime ministers met on the sidelines of a CIS summit. 
Asked to explain the discrepancy between Medvedev’s and Putin’s figures, Russian government spokesman Dmitry Peskov said the leaders had rounded off the figures. 
Valentin Zemlyanskiy, a spokesman of Naftogaz, Ukraine’s state-controlled gas monopoly responsible for filling the reserves, did not answer his cell phone Sunday. 
Moscow has previously indicated that it was willing to lend the money to Kiev as an advance on gas transit fees for the next five years. But Putin said Friday that Ukrainian President Viktor Yushchenko “considers the form of payment unacceptable and almost illegal.”
“We will hardly be able to solve this problem under such a regime,” Putin said, according to a transcript of his remarks posted on the government’s web site. 
Medvedev said in Khabarovsk that Russia wanted to help Ukraine but expected the European Union to share a considerable part of the burden. “In other words, if the talk is about loans, let’s help the Ukrainian state obtain the amount of money it needs. It is not us who have problems with solvency, after all,” he said, according to a transcript on the Kremlin’s web site.
But Putin suggested that no loans would be forthcoming. “We have applied to the European Commission with this question” of providing financial support to Ukraine, Putin said. “We got the answer through a minister of finance, ‘We have no money for Ukraine.’” 
“Supplies for domestic consumers in Ukraine is a very important condition for gas transit to the European consumers,” Putin said. “No one should pretend it doesn’t concern them.” 
EU officials attending the summit in Khabarovsk expressed concerns about possible gas disruptions. “There should be no more suspensions in the gas supplies,” European Commission President Jose Manuel Barroso said at the news conference. “We ask Russia and Ukraine to do everything in their power to prevent another crisis next year.”
Medvedev, however, maintained that the Energy Charter — the current legal framework that regulates energy supplies in EU countries and establishes rules for resolving disputes — was not enough to prevent disruptions. “Ukraine ... is a member of the Energy Charter, and so what? They did what they wanted to do. They spat on the Energy Charter,” Medvedev said. “It means that some other instruments are needed.” 
Medvedev has suggested a new energy charter that would replace the current one adopted in 1991 and signed by 51 countries. Russia signed the charter in 1994 but never ratified the document, which it now calls “outdated.”
“We consider some of these ideas very useful,” Barroso said, adding, though, that the EU would “rather build on existing agreements.” 
European Energy Commissioner Andris Piebalgs said in Khabarovsk that the EU was ready to consider incorporating some Russian proposals into the existing charter, Bloomberg reported. Russia, however, has insisted on a full overhaul of the document rather than spotty changes.
Turning to another thorny issue, the Eastern Partnership program, Medvedev said EU officials had “failed to persuade” him that it would not harm Russia’s interests. “What confuses me is that some states ... take this partnership as a partnership against Russia,” he said.

TITLE: Finnish Diplomat In Custody Scandal May Face Penalties
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The Finnish diplomat who helped Finnish citizen Paavo Salonen to take his five-year-old son Anton out of Russia may face criminal charges, Interfax reported on Friday, citing an anonymous source in Moscow.
Simo Pietilyanen, a former employee of the Finnish Consulate in St. Petersburg, may also be declared a persona non grata in Russia, the news agency reported.
“If Pietilyanen took the child out of Russia secretly on his own initiative, as the Finnish side has said, then at that moment he had no right to use diplomatic immunity,” the source said.
On Thursday, Andrei Nesterenko, a representative of the Russian Foreign Affairs Ministry, said that the Russian Embassy in Helsinki had passed on a letter to the Foreign Affairs Ministry of Finland with a request to specify whether or not Pietilyanen was on duty when transporting the child and his father to Finland on May 8.
The Foreign Affairs Ministry of Finland however considers the incident to be closed.
“The question of the kidnapping of the child is no longer under consideration. The child, who has Finnish citizenship, is in the charge of his legal guardian. The Foreign Affairs Ministry of Finland has no further need to consider the issue,” the Foreign Affairs Ministry of Finland said, Komsomoskaya Pravda daily reported.
The Finnish side recognized that Pietilyanen helped to drive the child out of the country through the Russian-Finnish border, but said that he acted on his own initiative.
Various media reports alleged that Pietilyanen drove a car with diplomatic number plates through the border with the child concealed in the trunk.
The incident occurred in early May, when the boy’s father took him out of Russia against the will of Anton’s mother with the help of the Finnish diplomatic employee, causing serious tensions between the upper diplomatic services of the two neighboring countries last week.
Russian officials said that the father’s actions were illegal, while the Finnish diplomats said that it was Anton’s mother who had initially taken the child illegally out of Finland.
The Foreign Affairs Ministry of Finland said earlier that it believed that the motive for the diplomat’s action was the interests of the child and the situation of his guardian.
However, it said that the employee would not come back to work in St. Petersburg.
Sergei Lavrov, head of the Russian Foreign Affairs Ministry, called his Finnish counterpart Alexander Stubb last week and lodged a protest in regard to the fact that Salonen had taken his son to Finland against the will of the boy’s Russian mother. 
Lavrov called the incident “an outrageous violation of the Vienna Convention on diplomatic relations that stipulates strict observance of the legislation of the host country by representatives of diplomatic offices”.
In its turn, the Finnish side reminded its Russian colleagues that Russia is still not a participant of the Gaaga Convention on Civil Aspects of International Kidnapping, and nor do Russia and Finland have a bilateral agreement on the matter. Therefore, since there are no international agreements governing the issue between the two countries, solving such situations is very difficult, the Foreign Affairs Ministry of Finland said.
In his conversation with Lavrov, Stubb underlined the importance of developing an agreement mechanism to regulate cases of child kidnapping, the report said.

TITLE: Duma Passes Draft Bill On Constitutional Court
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The State Duma on Friday passed in a third and final reading a Kremlin-drafted bill that would tighten control over the selection of the Constitutional Court’s president and double the length of the judge’s term.
Analysts said the Kremlin appeared to be cementing its control out of fear and that the court could block early elections to return Vladimir Putin to the presidency.
The amendments, approved by a vote of 352-57, would curb the right of the 19 Constitutional Court judges to elect their own president for a three-year term. 
Communist and Liberal Democratic Party deputies opposed the bill. United Russia deputies are “defying” current laws and the Constitution with their approval of the bill, Communist Deputy Sergei Reshulsky said at the Duma session Friday.
Both the Communists and the Liberal Democrats criticized the haste with which the bill was passed. President Dmitry Medvedev submitted the bill to the Duma earlier this month, and it was passed in a first reading on Wednesday.
The Duma passed the bill in both a second and third reading on Friday. It will now be sent to the Federation Council for consideration, and then sent to Medvedev to be signed into law.
Medvedev currently nominates judges to the 19-member court, who must be then be ratified by the Federation Council. Currently, however, the judges alone select their president. The bill also extends the length of the term of the Constitutional Court’s president from three to six years. Medvedev said the term extension is aimed at bringing it line with the length of the terms served by the heads of the Supreme Court and the Supreme Arbitration Court, RIA-Novosti reported Friday.
The bill “contradicts the principle of independence of judicial power,” Constitutional Court judge Gadis Gadzhiyev told Kommersant.
“This is a clear decrease in the level of democracy and the level of independence in the Constitutional Court,” a retired deputy chairwoman of the Constitutional Court, Tamara Morshchakova, told Ekho Moskvy radio earlier this month.

TITLE: Moscow Fumes at OSCE Choice of Russian for Post
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Central Election Commission is fuming that the Organization for Security and Cooperation in Europe’s election watchdog has appointed a Russian citizen to head its observer mission in upcoming European Parliament elections.
Commission member Igor Borisov said the watchdog, the Office for Democratic Institutions and Human Rights, or ODIHR, should have asked for permission before appointing Vadim Zhdanovich to head the mission that will assess the elections on June 4 to 7.
“This is a loophole that needs to be fixed — an international organization appoints a citizen of one of its member states without asking permission from that state’s representatives,” Borisov said Friday, Interfax reported.
The OSCE denied that it had to get approval for the appointment and argued that it had chosen election observers from non-EU countries to give its mission an independent character. 
“Vadim Zhdanovich is a very experienced elections expert who has for many years worked at the Office for Democratic Institutions and Human Rights,” ODIHR spokesman Jens-Hagen Eschenbucher said.
“The Russian elections commission knows that our experts never act as representatives of their countries of origin,” the spokesman said by telephone from Warsaw.

TITLE: Artist Gets 22 Days for Air Rage
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A U.S. court has convicted a Russian-born artist of assault in a bizarre incident aboard a plane in which she drank a bottle of liquid hand soap and attempted to bite the flight crew.
A court in Bangor, Maine, convicted Galina Rusanova, 54, on three counts of assault and sentenced her to 22 days in jail for her drunken outburst last month aboard a London-bound United Airlines flight from Los Angeles, the Bangor Daily News reported.
Rusanova, who has a British passport and lives in London, was released after her conviction Thursday because she had already spent 22 days in custody while awaiting trial, the report said.
Roughly three hours into the April 29 flight, the plane had to be diverted to Bangor after an intoxicated Rusanova became unruly and scuffled with flight attendants. 
According to an FBI report, she began punching and kicking until she fell to the floor of the cabin, at which point she began “snapping like a dog” while attempting to bite a crew member’s leg. 
Court papers revealed that Rusanova ran into the bathroom and consumed an entire container of liquid soap while a flight attendant looked on.
After spending the night in the Eastern Maine Medical Center for observation, Rusanova was arrested and interrogated by the FBI. 
According to investigators, she was in the United States to visit a man she met on the Internet. She said that because of a fear of flying, she consumed sleeping pills, antidepressants and wine, thus sparking her erratic behavior. 
“It’s typical of me. I sometimes do crazy things,” she told investigators, the Bangor Daily News reported.
Rusanova did not challenge the charges in court.
“I plead very guilty,” she told U.S. Magistrate Judge Margaret Kravchuck. “I went to Los Angeles looking for happiness, and now I’m here. I’ve been punished enough. Don’t punish me more, please.”
After a short trial in which Rusanova cried several times, Kravchuck addressed her in Russian after handing down the sentence, telling her, “Good luck and goodbye.”
Rusanova had faced up to 20 years in prison on a charge of interfering with a flight crew, but the charge was dropped.
U.S. immigration officials were expected to escort Rusanova back to London in two to three days.

TITLE: Alcohol in Breast Milk Kills Baby in Chita Region
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A baby in the Chita region died from his drunken mother’s breast milk after she downed half a liter of ethanol before feeding him, the region’s Investigative Committee said after sentencing the woman, Reuters reported.
Yelena Sinitsyna was handed a one-year suspended sentence and a three-year probation period last week for death by negligence of her 4-month-old son in the small town of Sretensk, near the border with China in eastern Siberia.
“On April 3 between 2 and 3 p.m., she drank half a liter of spirit alcohol. In her drunken state, she then breastfed her son,” the Investigative Committee said on its web site, Zabsledkom.chita.ru.
“The immediate cause of the child’s death, according to a forensic examination of the corpse, was acute ethanol poisoning,” the Investigative Committee said.
Sinitsyna was given a relatively light sentence because she must care for her surviving toddler, it added.
Eighty percent of crimes committed in Russia are connected to alcohol consumption, the Interior Ministry said Friday, citing a report that it will publish soon. A spokesman at the ministry declined to comment on the Sinitsyna case.
The Chita court said Sinitsyna, if found to be an alcoholic, would receive treatment.

TITLE: In Brief
TEXT: <strong>Poisoned Migrants</strong>
ST. PETERSBURG (SPT) — The bodies of two Uzbek migrant workers were found in a workmen’s shack on a building site in Pushkin, just outside St. Petersburg, on Saturday, Interfax reported. Four more of their colleagues, also of Uzbek origin, have been hospitalized with acute cases of poisoning.
“Two bodies were discovered during the day on Saturday, with no signs of any external injuries. Another four were taken to an emergency medical research center in a serious condition, suffering from poisoning caused by an unspecified neurotropic agent,” according to a police source.
Investigators working at the crime-scene recovered three canisters containing chemical fluids, several packets of instant noodles, and liquid from a kettle, all of which have been sent for expert analysis. The case is being treated as death by misadventure.

<strong>Swine Flu Misdiagnosed</strong>
ST. PETERSBURG (SPT) — Tests for the H1N1 flu virus have proved negative in the cases of four St. Petersburg residents, according to the Influenza Institute of the Russian Academy of Medicine, Interfax reported.
“We’ve had some suspected cases; one person returned from a business trip in Mexico, we tested him, and the results came back negative. It turned out it was a case of common hayfever. Three more patients were tested at the Botkin Hospital, and their results were also negative,” said a spokesman from the institute.
The representative emphasized that anyone who is even vaguely suspected of having the H1N1 infection is being sent for testing. “Everyone’s on the lookout. We’re keeping an eye on every breath.”
Two cases of swine flu have so far been confirmed in Russia, one in Moscow, and one in Kaluga Oblast.

<strong>Traffic Fines Up</strong>
ST. PETERSBURG (SPT) — Fines for infringement of various traffic laws were raised over the weekend, bringing into force a new law ratified by President Dmitry Medvedev on May 8, Fontanka.ru reported.
Fines for failing to give way to pedestrians, cyclists and other drivers with priority have risen from 100 rubles ($3.22) to 1,000 rubles ($32.22). The fine for transporting a child without an appropriate children’s car seat has risen from 100 rubles ($3.22) to 500 rubles ($16.11), and illegal parking on a pedestrian crossing or pavement now incurs a 300 ruble ($9.67) penalty.
Fontanka also reported that fines for pedestrians breaking road use rules have doubled to 200 rubles ($6.44).

<strong>Jet in Emergency Stop</strong>
MOSCOW (SPT) — A Red Wings Tu-204 jet flying Russian vacationers to Turkey was forced to make an emergency landing Sunday because of problems with its fuel system, RIA-Novosti reported.
The plane, carrying 206 passengers and 11 crew members, was flying from Perm to Ankara and was diverted to the Krasnodar city airport, the report said. No one was injured, and arrangements were being made to place the passengers on another plane.
Another plane operated by Moscow-based Red Wings made an emergency landing in Sochi on April 25 after experiencing engine failure on a flight from Moscow to the Egyptian resort of Sharm el-Sheikh, RIA-Novosti said. 

<strong>Would-Be Robber Killed</strong>
MOSCOW (SPT) — A gunman opened fire on an armored vehicle in central Moscow on Friday, leading to a shootout with guards that left him dead, Interfax reported.
One guard was injured when the unidentified assailant fired at him as he transferred cash from one vehicle to another near a bank on Bolshoi Predtechensky Pereulok at about 1 p.m., the report said. 
Several guards fired back, killing the attacker. 

<strong>Courier Robbed</strong>
MOSCOW (SPT) — Three unidentified men in a sleek black Mercedes robbed a courier in a simple Moskvich of 2 million rubles ($64,400) on Friday, Interfax reported. 
The robbers, wearing motorcycle helmets, fired a traumatic gun at the courier’s car as he was driving on Montazhnaya Ulitsa in eastern Moscow on Friday morning, lightly injuring the courier on the back, the report said.
The courier’s car hit a bus, and the attackers then got out of their Mercedes, broke the windows of the Moskvich and stole a bag with the money from the back seat. They fled in the Mercedes. 

<strong>Mother to Be Extradited</strong>
MOSCOW (SPT) — A Russian woman will be extradited from Hungary to France on Wednesday to face charges of kidnapping her 3-year-old daughter from her French ex-husband, RIA-Novosti reported.
Irina Belenkaya, who was detained in Hungary on April 13 as she attempted to take her daughter across the border to Ukraine, will probably be released from custody once she arrives in France and might be allowed to return to Russia, the news report said, citing a French prosecutor’s aide.
Belenkaya and her former husband, who now has the child, have been embroiled in a custody dispute that has seen one parent snatch the child from the other three times over the past two years. 

<strong>Lavrov Meets Hamas</strong>
DAMASCUS, Syria (SPT) —?Russia believes in the need to maintain contacts with the Palestinian group Hamas, Foreign Minister Sergei Lavrov said Saturday, despite a cooling of ties between the two sides, Reuters reported.
“We are certain that this is needed,” Lavrov said after meeting Hamas leader Khaled Meshaal in the Syrian capital, where he lives in exile, Interfax reported.
Diplomats in Damascus said new Middle East peace moves by U.S. President Barack Obama may have helped spur the meeting between Lavrov and Meshaal amid tension between Hamas and Russia over the last few months.

<strong>‘Help for Taliban’</strong>
ISLAMABAD, Pakistan —?Pakistani authorities said fighters from Chechnya are among foreign forces helping the Taliban battle the army in the northwestern Swat Valley.
“There is no doubt that some Uzbeks, Chechens and people of other nationalities were found involved with their designs to create an insurgency in Swat,” Information Minister Qamar Zaman Kaira said last week, according to the Associated Press of Pakistan.

<strong>Consul Under Fire</strong>
SOFIA, Bulgaria (Bloomberg) —?Russia’s honorary consul to the Bulgarian Black Sea city of Burgas has been again accused of sexual harassment.
Lyubomira Kirilova, 26, a former employee now on maternity leave, said she was sexually abused by consul and businessman Tonko Fotev in July 2007 and will file a complaint with prosecutors.
Earlier in the year, Anna Zartova, a model and daughter of Fotev’s former business partner and friend, accused Fotev of aggressive sexual advances. 
Fotev has denied the allegations, saying they are an attempt to discredit him amid a business dispute with his former partner. (Bloomberg)

<strong>Estonia Sells Flat</strong>
MOSCOW (SPT) — The global economic crisis has hit Estonia so hard that it has decided to sell the residence of its ambassador to London, RIA-Novosti reported Friday.
The 145-square-meter Kensington apartment, purchased by Estonia shortly after its independence from the Soviet Union in 1991, is expected to fetch $1.4 million, the report said, citing Estonia’s Foreign Ministry.

TITLE: Lukashenko Critical Ahead of Putin Visit
PUBLISHER: Reuters
TEXT: MINSK — Belarussian President Alexander Lukashenko criticized Russia on Friday for failing to carry out decisions on integrating the two states a week before Prime Minister Vladimir Putin is due to visit.
The two countries have talked for more than a decade about a “union state” bringing the countries closer together, even though Lukashenko has sought a rapprochement with the West after years of isolation and accusations of human right abuses.
Despite talks of adopting the Russian ruble for trade, Minsk has been frustrated by what it sees as unequal access to Russian markets as both ex-Soviet countries grapple with the global economic downturn. 
“Everything that we agreed, that we discussed at the supreme state council, the appropriate documents that we signed — all of this has been blocked,” Lukashenko said, the official BelTA news agency reported.
“If we are going to be blocking each other on such issues and Russia starts denying us access to its markets, then who needs this so-called integration process?” he said. “The presidents take decisions, and the Russian government fails” to implement them.
Lukashenko said he would discuss these issues when Putin visits on Thursday. The two are also expected to discuss the release of a $500 million Russian loan to Belarus and the idea of a currency swap, which would allow Belarus to move to the ruble in its trade accounts.
Lukashenko has to perform a balancing act between Russia, a traditional ally that is kinder to Lukashenko’s style of rule and supplies Belarus’ energy, and the EU, which can offer modernization and investment.
Lukashenko began moving away from Russia after a 2007 dispute over gas prices. Accused by the West of flouting human rights, Minsk has now taken steps toward the European Union such as releasing the last of what the bloc called political prisoners.
The EU suspended a travel ban on Lukashenko, and Belarus was invited to join the bloc’s Eastern Partnership, an initiative to bring former Soviet states apart from Russia closer to the EU.
“It’s not my fault that we’re not moving toward integration, that we are developing a bridge to the West, that we have entered the Eastern Partnership and so on. … In which direction are we supposed to move?” Lukashenko said.
Minsk is under pressure from Moscow to recognize as independent states the Georgian regions of South Ossetia and Abkhazia after Russian forces drove the Georgian army out last summer. The EU has made it clear that such a move would unravel any progress being made with Belarus.

TITLE: Georgia Arrests 33 In Mutiny
PUBLISHER: The Associated Press
TEXT: TBILISI, Georgia — Georgian police have arrested nearly three dozen people in connection with a recent mutiny led by tank battalion officers, a senior lawmaker said Saturday.
Gigi Targamadze, a pro-government lawmaker who heads the parliament’s defense committee, told Rustavi-2 TV that 20 of the 33 arrested are military personnel and the rest are civilians.
His comments came two days after police shot and killed a former military officer and wounded two others suspected of plotting the May 5 mutiny, which embarrassed President Mikhail Saakashvili’s government and fueled opposition demands for him to resign.
The two wounded officers, Koba Otanadze and Levan Ameridze, were jailed without bail Saturday for two months while the investigation continues, defense lawyer Onise Mebonia said.
Government officials initially claimed that the short-lived mutiny was part of a Russian-backed plot to bring down the government but later backtracked and said its apparent aim was to disrupt NATO military exercises under way in Georgia. Russia has criticized the exercises, which end June 1.
Saakashvili, a staunch U.S. ally, has faced weeks of street protests by opposition forces pressing for him to step aside over August’s disastrous war with Russia and allegations of authoritarian rule. Opposition leaders say they doubt the government’s account of the mutiny and accuse Saakashvili of using it to draw attention away from the protests and problems facing the country.
n?Heavy rains have led to the deaths of at least three people in Georgia, the Emergency Situations Ministry said Sunday. The victims were killed late Saturday when their car was swept off a flooded road and down a steep incline in the east of the country, it said.

TITLE: Big Names Back Nuclear ‘Bank’
PUBLISHER: The Associated Press
TEXT: VIENNA — Buffett’s bankroll, Obama’s clout and the partnership of a savvy former Soviet strongman may turn the steppes of Central Asia into a nuclear mecca, a go-to place for “safe” uranium fuel in an increasingly nervous atomic age.
The $150 million idea, with seed money from U.S. billionaire Warren Buffett, must still navigate the tricky maze of global nuclear politics, along with a parallel Russian plan. But the notion of such fuel banks is moving higher on the world’s agenda as a way to keep ultimate weapons out of many more hands. Decisions may come as early as next month here in Vienna.
The half-century-old vision, to establish international control over the technology fueling atom bombs, was resurrected in 2003, when Iran alarmed many by announcing that it would develop fuel installations — for nuclear power, it insisted. Mohamed ElBaradei, the UN nuclear chief, said then that the time had come to “multinationalize” the technology to stop its spread to individual countries.
Last month, the new U.S. president gave the idea its biggest boost.
In a speech in Prague, Barack Obama detailed an aggressive plan for arms control, including setting up an international fuel bank “so that countries can access peaceful power without increasing the risks of proliferation.”
That’s the fear: The centrifuges that enrich uranium with its fissionable isotope U-235, to produce power-plant fuel, can be left spinning to enrich it much more, producing fissile, highly enriched uranium for nuclear bombs.
Only a dozen nations have enrichment plants, but ElBaradei’s Vienna-based International Atomic Energy Agency, or IAEA, foresees nuclear power use almost doubling in the next 20 years. More and more governments may want the fuel-making capability.
“The real risk is that highly enriched uranium could be acquired by, say, terrorist groups,” Russian government adviser Alexander Konovalov told a conference in Rome on nuclear dangers. “All they need is 50 kilograms of enriched uranium. All the rest [to make a bomb] can be found on the Internet.”
The IAEA’s 35-nation board of governors is expected to address the issue at its June meeting. A raft of proposals has surfaced, including a German idea to build an IAEA enrichment plant on “internationalized” soil somewhere to sell fuel to countries committed to nuclear nonproliferation. “Assurance” is the byword — a desire to assure future Irans that there won’t be politically motivated cutoffs of nuclear fuel supplies so they needn’t build, at huge cost, their own enrichment plants.
Only one proposal has money behind it already, however — the idea advanced by the Nuclear Threat Initiative, a Washington-based organization founded by philanthropist Ted Turner and former U.S. Senator Sam Nunn.
Calling it an “investment in a safer world,” investor and initiative adviser Buffett pledged $50 million to such a bank, provided that governments put up an additional $100 million. That threshold was passed in March, with most of the money coming from the United States and the European Union.
The $150 million would buy enough low-enriched uranium to fuel a 1,000-megawatt power plant, jump-starting a constantly replenished fuel stockpile that would be owned and sold by the IAEA at market prices and on a nondiscriminatory basis.
On April 6, the day after Obama’s address, another piece of that picture fell into place when another president spoke in Astana, the capital of Kazakhstan. “If a nuclear fuel bank for nuclear energy was created, then Kazakhstan would consider hosting it,” Kazakh President Nursultan Nazarbayev said.
Nazarbayev is eager to develop his nuclear industry, which is based on Soviet-era facilities and Kazakhstan’s large uranium deposits. 
“It has a lot of qualifications,” Nunn said of Kazakhstan. “It would be highly symbolic to put the fuel bank in a country that got rid of nuclear weapons.”
He said he first approached the Kazakh leader about hosting a fuel bank “a couple of years ago.” By this May 5, Nazarbayev’s foreign minister was in Washington discussing the plan with Obama’s national security adviser.
Most intriguing, perhaps, is the fact that Nazarbayev’s announcement came with Iran’s visiting president, Mahmoud Ahmadinejad, standing at his side. The Iranian called the fuel bank “a very good proposal.” 
Iran isn’t likely to give up its controversial fuel facilities, which some fear could lead to an Iranian bomb. But Nunn said a Kazakh or other multinational fuel bank, by involving Iran in an enterprise with international oversight, “could be a very useful tool, not the whole answer, but part of an answer” to what he called “the Iranian challenge.”
The Nuclear Threat Initiative proposal may be put on hold until September while IAEA governors next month consider a Russian plan that is more developed and less ambitious, since it doesn’t put the IAEA into the fuel sales business. Instead, the Russians would maintain their own fuel stockpile at a Siberian enrichment plant, which they would make available via the IAEA, “depoliticizing” sales by leaving it to the UN agency to certify buyers.
ElBaradei, meanwhile, views these as early steps in a longer process that eventually would bring all new enrichment facilities under some multinational control. “It’s a bold agenda,” he said in March. “It’s going to take some time, but I think we need to start.”

TITLE: Experts Claim Kustodiev Painting Is $3M Forgery
AUTHOR: By John Varoli
PUBLISHER: Bloomberg
TEXT: Russian art experts have listed as a fake a painting that Christie’s International sold as a $3 million work by Boris Kustodiev.
The picture is on the latest installment of a list of 900 works identified as fraudulent by a Russian government culture agency. The 100 new additions include three allegedly by Russian masters sold by Christie’s and rival Sotheby’s over the past decade. Christie’s said it had returned money for a second work. Sotheby’s said it had heard nothing from the buyer of the third.
For the past 18 months, Russia’s art market has faced its worst crisis of confidence in the post-Soviet era as five volumes of “The Catalog of Fraudulent Art Works” were published, said dealers. Some experts say that fakes now comprise the majority of artworks they are asked to evaluate.
“Every month I’m asked to look at 10 paintings and nine are fakes,” said London-based Russian art dealer James Butterwick. “Many Russian collectors buy without asking competent experts. If a work is credible then it has a provenance that can be easily checked out.”
Prices have also tumbled as the financial crisis cuts collectors’ appetite for art. Combined sales at Russian art auctions in New York at Sotheby’s and Christie’s in April were about 40 percent of the volume sold in 2008.
Rosokhran-Kultura, the government’s cultural watchdog, released the latest issue of the fakes catalog last month. It contained the most expensive item sold at Christie’s November 2005 auction of Russian paintings in London. It was listed as “Odalisque,” painted in 1919 by Kustodiev.
“There’s no doubt ‘Odalisque’ is a fake, and that’s why we included it,” said the catalogue’s co-author Vladimir Roschin.
Roschin didn’t identify the current owner of the 14-inch-by-18.5-inch painting which features a nude woman reclining in bed. The painting is signed in Cyrillic, “B. Kustodiev, 1919.” It had an estimate of 180,000 pounds to 220,000 pounds, and sold for 1.69 million pounds ($2.93 million at the time).
“I have expert conclusions saying it’s a fake from the leading authorities: the State Tretyakov Gallery, the State Russian Museum, the State Grabar Art Scientific Restoration Centre, and a private expert, Vladimir Petrov,” said Roshchin.
The Christie’s catalog for the sale says “Odalisque” “appears to have been based on a charcoal drawing, ‘Reclining Nude,’ dated 1915.” It also said the painting came from the collection of Leo Maskovskii, a Russian refugee who bought art while living in the 1920s in the Baltic countries.
Christie’s gives a five-year authenticity guarantee on works it sells. Within that time, if the buyer presents the conclusions of two experts acceptable to the buyer and Christie’s, then the auction house is willing to annul the sale.
“We are aware of the reports of the Grabar Art Scientific Restoration Centre and Vladimir Petrov prepared for the Buyer,” Christie’s said in an e-mailed statement. “We wish to conduct our own investigation but, to date, we have been denied access to the painting. Once we have the opportunity to do so, we will carefully review all the evidence that is available and reach an objective conclusion.”
Many of the works listed in the fakes catalog are 19th-century Western European paintings doctored by criminals to look like 19th-century Russian artworks. Over the past decade, the latter have been fetching much higher prices as Russian collectors snap up items from their national heritage.
The frauds in these volumes were compiled by Vladimir Petrov, who admitted in 2005 to having inadvertently authenticated 20 fraudulent paintings. He called on his colleagues to admit their mistakes.
Such errors are possible because many Russian realist painters followed European trends, said Roshchin. They used the same techniques, subject matter, and sometimes had the same teachers.
The Confederation of Art and Antique Dealers, a Moscow-based association, says the catalog and its sponsors are “destabilizing the market” and “destroying consumer confidence.”
The latest catalog also includes “Winter Light in the Evergreen Forest,” attributed to the Russian landscape painter Andrei Schilder, which sold at Christie’s in July 2000. Christie’s said it has already settled this matter.
“Shortly after the sale, concerns about its authenticity were raised,” Christie’s said in an e-mailed statement. “The matter was resolved on 30 May 2001 with a cancellation of the sale.”
The new catalog also lists an artwork sold by Sotheby’s in May 2002, “Summer Fishing in a Forest Lake,” allegedly by the Russian painter Ilya Ostroukhov.
“Sotheby’s is not aware of any issue raised about the attribution of this work, either at the time of the auction in 2002 or since,” the auction house said in a statement.
Butterwick, the London art dealer, feels the auction houses will be able to retain the confidence of Russian collectors. 
“The one thing the auction houses have going for them is a buyer can return an artwork if it’s found to be a fake,” he said.

TITLE: Hotel Expands Into Reconstructed Historic Buildings
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: A refined Art Deco lobby and lavish ballroom are some of the impressive new features of the Corinthia St. Petersburg Hotel, which has just completed a large-scale expansion and refurbishment project at a cost of 100 million euros of foreign investment.
The five-star property, which since 2002 has belonged to the Maltese company International Hotel Investments that specializes in investment, construction and management in the hospitality sphere, is part of Corinthia Hotels and was formerly known as the Nevskij Palace hotel. The group has properties in Malta, St. Petersburg, Budapest, Prague, Lisbon and Tripoli and is currently working on a hotel in London in the proximity of Trafalgar Square.
During the past two years, International Hotel Investments has put around 100 million euros into the hotel’s expansion and refurbishment.  According to Alfred Pisani, the company’s founder and chairman of the board of directors, 70 percent of the work has been completed, while the remainder is due to be finished in the near future. 
The expansion has been formidable. Now, in addition to the hotel’s main property at 57 Nevsky Prospekt, the complex includes two adjacent buildings at numbers 55 and 59. Nevsky 59 is now home to 107 new rooms and a modern conference center, including a large multifunctional space covering 500 square meters with a seating capacity of up to 600 people. Nevsky 55 will soon play host to modern offices and a top-flight retail center, complete with boutiques and shopping galleries. With a car park, spa and large gym also planned for the near future, the hotel will soon boast more facilities under one roof than any other luxury hotel in town, Pisani said.
In 2007, after more than a year spent in negotiations, the company bought both buildings from the city government in a state of disrepair. After it was decided that reconstruction would not be possible, the new owners demolished both properties and built high-quality replicas in their place.
The decision to demolish the buildings caused a major outcry among local pressure groups that fight against what they see as “the disfigurement of the architectural landscape of St. Petersburg” and “depriving the city of its unique appearance”. Alexander Prokhorenko, head of City Hall’s External Relations Committee, responded boldly to the criticism and insists reconstruction was impossible in this case for technical reasons. 
“The work that was done on both buildings is impeccable,” Prokhorenko said. “Interestingly, before the three Corinthia buildings became a hotel complex, they were ordinary residential housing, largely full of the infamous communal apartments. Now, Corinthia is actually turning back the centuries, because before the Bolshevik revolution, Nevsky Prospekt was first and foremost a business avenue, adorned with offices, hotels and shops.”
The spacious, comfortable new rooms have modern designs in warm, rich tones, including pistachio and mauve. The hotel’s largest and, as expected, most luxurious room, totalling 250 square meters, is still being shaped up. The room will cost between 164,500 and 282,000 rubles ($5,288 to $9,065) per night, depending on the time of year. Room prices vary depending on the season and number of guests. For example, a superior room will cost 17,390 rubles ($559) for single occupancy (18,800 as a double) in low season, and 24,440 rubles in top season (25,850 for double occupancy). An executive room will cost 23,500 rubles ($755) in low season as a single (24,910 as a double). In top season, the room will cost 30,550 rubles (31,960 with two people staying).
The U.K. company GA Design International, a leading interior and architectural design consultant, is responsible for the hotel’s new sophisticated design. The bureau’s earlier projects include Strings Hotel Tokyo, Crowne Plaza Blackfriars London, Hotel Bel-Air Cap Ferrat in France, Dead Sea Resort Movenpick Hotel in Jordan and a number of restaurants around the world.

TITLE: Volume of Imported Cars Plummets
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The volume of cars imported to St. Petersburg decreased by more than three times in the first quarter of 2009.
In January to March of this year, 1,467 cars were imported to St. Petersburg — 3.3 times fewer compared to the same period last year, Interfax reported.
The proportion of foreign cars produced in St. Petersburg out of the total number manufactured in Russia from January to April was 5.5 percent. St. Petersburg currently has two plants that produce foreign brand cars — General Motors and Toyota.
During the first four months of the year, the city’s automobile manufacturing plants produced 5,100 cars, Fontanka reported.
“The indexes of automobile manufacturing in St. Petersburg depend on the figures of the global car industry trends,” said Sergei Fiveisky, deputy head of St. Petersburg’s Economic Development, Industrial Policy and Trade Committee.
“The plants have temporarily stopped production and are working to a shortened schedule, and the volume of car sales continues to decrease. As a result, the car manufacturers have to react to these dynamics,” Fiveisky said, Interfax reported.
“At this stage, even the cars produced in or imported to Russia and St. Petersburg in 2008 have not yet been sold,” he said. “At the same time, a decrease in production goes alongside a decrease in imported cars. An increase in production volume may be possible if the brand models for which the state offers subsidies for interest rates on loans is extended to include foreign car brands,” he said.
In January to April this year, car production in Russia decreased by 60.9 percent, down to 183,000 cars. The percentage of cars manufactured in St. Petersburg during the same period was 2.8 percent, according to the committee.
The production of foreign car brands in Russia decreased by 50 percent to 92,000 cars.
Meanwhile, the Ford plant in the Leningrad Oblast stopped production from Monday until June 5, Yekaterina Kulinenko, spokeswoman for Ford Russia said, Interfax reported.
The plant is temporarily stopping work to decrease the volume of production due to the general drop of sales on the car manufacturing market.
Ford is also switching to a four-day working week beginning June 8 and due to last until Oct. 5. The decision was an alternative to making staff redundancies at the plant, its management said.

TITLE: Ford Assembly Line Halts for 2 Weeks
PUBLISHER: The St. Petersburg Times
TEXT: Ford stopped production at its Russian factory just outside St. Petersburg on Monday until June 5 because of falling sales, spokeswoman Yekaterina Kulinenko said, Interfax reported.
The factory, which opened in Vsevolozhsk in the Leningrad Oblast in 2002, produces Focus and Mondeo models and employs about 200,000 people.
“We are announcing a temporary work stoppage from May 25 to June 5. We are forced to cut our production volume because sales have fallen. Sales of the Ford Focus fell 16 percent in April,” Kulinenko said.
When the plant resumes production in June, it will continue with its four-day workweek until Oct. 8. Workers say this will result in a 20 percent pay cut from their average 27,000 ruble ($869) salary.
The factory’s union protested in front of the plant last week, voicing its opposition to a shortened workweek.

TITLE: Food Prices Climbing Faster Than in EU
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: Prices for food products in Russia grew ten times more than in the European Union from January to April, according to the Federal Statistics Service.
Prices for food in Russia grew by 5.8 percent — 10 times higher than in EU countries, where they grew by 0.6 percent.
In April, food products in Russia became 0.5 percent more expensive, while in EU countries, food decreased in price by an average of 0.1 percent.
Last month, the biggest growth in food prices in Russia was for vegetables — at 2.4 percent. In the EU on the other hand, vegetables became 0.1 percent cheaper. Prices for fish and seafood products in Russia grew by 1.8 percent; for sugar, jam, honey, chocolate and sweets by 0.9 percent; and by 0.6 percent for bread items. In the EU, prices for that group of products remained virtually unchanged.
In Russia, prices for fruit decreased 2.1 percent and for butter by 1.2 percent, while in the EU, fruit prices grew by 0.8 percent.
Compared to the beginning of the year, prices in Russia grew most of all on fruit — by 17 percent. In EU countries, growth stood at 1.9 percent. Prices for sugar, jam, honey, chocolate and sweets in Russia grew by 12.7 percent, while in Europe they grew by 1.5 percent. Vegetables in Russia now cost 11.6 percent more than last year, while this figure in Europe is 4.6 percent.
Fish and seafood products became 9.4 percent more expensive in Russia, while in Europe, they became one percent cheaper. Prices for meat and meat products here grew by 4.6 percent; on bread and cereals by 3.5 percent; and on dairy products, cheese and eggs by 0.7 percent.
The overall inflation rate in Russia from January to April stood at 6.2 percent, which also exceeded price growth in Europe by 10 times.

TITLE: In Brief
TEXT: <strong>TMK Talks to EBRD</strong>
MOSCOW (Bloomberg) — TMK, the world’s second-largest pipemaker for the oil and gas industry, is in talks with the European Bank for Reconstruction and Development on a $200 million loan, Vedomosti said, citing an unidentified person familiar with the negotiations.
Vladimir Shmatovich, vice president of strategy, said on May 16 in London that the company was talking with the EBRD, without specifying the amount of the loan.

<strong>Oil Exports to Decrease</strong>
LONDON (Bloomberg) — Russia, the world’s second-biggest oil exporter, plans a one percent decrease in daily shipments of Urals and Siberian Light crude from six Baltic and Black Sea ports in June.
Russia will ship about 2.81 million barrels a day of crude oil from the Baltic ports of Primorsk and Gdansk and from Novorossiysk, Yuzhny, Odessa and Tuapse in the Black Sea, according to the preliminary loading schedule of Transneft, Russia’s oil-pipeline operator. Exports were originally scheduled at 2.84 million barrels a day in May.
Crude shipments will total 84.2 million barrels in June, compared with 87.9 million barrels this month.

<strong>Slovenia Gets On-Side</strong>
LJUBLJANA (Bloomberg) — Slovenia and Russia will sign an agreement on the South Stream natural-gas pipeline next month, STA reported, citing Slovenian Economy Minister Matej Lahovnik.
Slovenia wants to be “on-side” and is working with Russia on the “tax issues involved,” Lahovnik said, according to the Slovenian newswire.
Gazprom, Russia’s gas exporter, is lining up partners for its South Stream project, a 900-kilometer (560-mile) pipeline that will run under the Black Sea to Bulgaria, where it will split into northern and southern routes.

<strong>Sainsbury Eyes Russia</strong>
MOSCOW (Bloomberg) — J Sainsbury Plc, the U.K.’s third-largest supermarket chain, may open stores in Russia, Kommersant reported, citing an unidentified Russian retailer.
Top officials of the London-based company last week met with representatives of Russian supermarket operators, including X5 Retail Group NV, the newspaper said.
Sainsbury may take a decision within three months, Kommersant said. Goldman Sachs Group Inc. is advising the British chain on its expansion plan, the newspaper added.

<strong>Gazprom Output Down</strong>
MOSCOW (Bloomberg) — Gazprom may cut production to as low as 450 billion cubic meters of natural gas this year because of declining demand, Deputy Chief Executive Officer Alexander Ananenkov said.
Output, given the real consumption on the market, could be between 450 billion and 510 billion cubic meters, he said, according to the Interfax news service. Sergei Kupriyanov, Gazprom’s spokesman, confirmed the remarks.
Gazprom’s production in 2008 reached 549.7 billion cubic meters, according to Interfax.

<strong>Oil Prices for Budget Set</strong>
MOSCOW (Bloomberg) — Russian Finance Minister Alexei Kudrin said the government plans to base the 2010 budget on oil at $50 a barrel and the following year’s budget at $52 a barrel.
The 2012 budget will be based on a price of $53 a barrel of crude, Kudrin told reporters in Moscow on Monday.

TITLE: Ruble Rally Reaches 13th Week as Investors Return
PUBLISHER: Bloomberg
TEXT: MOSCOW — The ruble climbed to a four-month high against the dollar last week, headed for its longest run of weekly gains in almost two years as surging oil prices lured investors to the country. 
The ruble jumped to as strong as 31.16 per dollar on Friday, the most since Jan. 14, and is poised for a 2.8 percent gain in the week, its sixth weekly advance and the longest rally since September 2007. 
The Central Bank bought the most foreign currency on the market in almost a year last week as it sought to control the advance, said Mikhail Galkin, head of fixed-income and credit research at MDM-Bank. 
“Oil at $60 is just very good news for the ruble,” said Beat Siegenthaler, chief emerging-markets strategist in London at TD Securities. “Investors are questioning again which currencies can get them some yield, and at the moment Russia has one of the highest yields you can get.” 
The ruble added 0.2 percent to 36.74 against its target basket on Friday and is poised to gain 1.4 percent versus the mechanism this week, extending its record weekly advance to 13 weeks. 
The ruble was little changed at 43.50 per euro Friday, also steady in the week. 
Crude gained 0.5 percent to $61.36 a barrel in New York on Friday, bound for a 8.9 percent jump in the week as the dollar’s 3.2 percent drop against the euro encouraged investors to buy commodity futures as a hedge against inflation. Urals rose 1.4 percent to $59.56, the highest since Nov. 5. 
Russia’s key interest rates, which have been cut twice since April 24, still exceed those of Europe, the United States, Japan and other emerging markets. 
The country’s refinancing rate is 12 percent, and the repurchase rate charged on Central Bank loans is 11 percent. That compares with the euro region’s 1 percent, the target rate of 0.25 percent in the United States and even Brazil’s 10.25 percent benchmark borrowing rate. Japan’s rate is 0.1 percent. 
“The carry trade is back,” said Siegenthaler, referring to the practice where investors borrow funds in a country with lower rates of interest and then invest the money in a place where the returns are higher, such as Russia. 
The Central Bank bought about $6.5 billion of dollars and euros last week in a bid to limit the ruble’s volatility, the most foreign exchange purchased since summer 2008, when the ruble jumped to a record 23.06 per dollar, MDM’s Galkin said. 
It bought $3.5 billion last week and $5.5 billion the week before, Galkin said. 
The Central Bank has already purchased more than $700 million on Friday and is holding the 36.70 basket level, he added. 
“The oil price rally is forcing an increasing number of local players to take profits on their foreign-currency dollar and euro holdings,” Galkin said. “Plus, we see a buildup of carry-trade positions from foreigners betting on the ruble.”

TITLE: Jobless Rate Reaches 9-Year High
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian retail sales fell the most in more than nine years in April as unemployment reached a nine-year high.
Sales dropped an annual 5.3 percent, the biggest decline since September 1999, after a four percent decrease in March, the Federal Statistics Service said in an e-mailed statement on Friday.
The median forecast of 10 economists surveyed by Bloomberg was for a 5.2 percent fall. Retail sales were down 0.2 percent on the month.
Russians flocked to stores including Ikea, Zara and Benetton as average wages rose sixfold over the past decade in the economic recovery from the debt default and ruble devaluation of 1998. Rising consumer borrowing helped retail sales increase at an average annual rate of about 13 percent.
The worst financial crisis since the Great Depression has forced households to curb spending as lending stalls and companies slash jobs and wages.
The economy of the world’s biggest energy exporter shrank an annual 9.5 percent in the first quarter, the worst contraction in 15 years.
Russia’s unemployment rate rose in April to 7.7 million people, or 10.2 percent of the working population, as companies cut staff to reduce costs as sales dwindled. The average monthly wage declined an annual 3 percent in April, while real disposable incomes dropped 0.1 percent.
Russian companies from metals producers to banks and advertisers are cutting staff to rein in spending as sales fall and they struggle to pay back loans. President Dmitry Medvedev has called unemployment Russia’s “biggest problem” as the country faces its first recession in a decade.
Joblessness topped the list of concerns, according to a poll released on April 26 by the All-Russian Center for the Study of Public Opinion, or VTsIOM. It’s the first time the issue led the list in five surveys since December, the pollster said. Unemployment was named by about 7 percent of respondents.

TITLE: Increased Demand Gives Platinum a Boost
AUTHOR: By Courtney Weaver
PUBLISHER: The St. Petersburg Times
TEXT: Things are looking up for Russia’s platinum producers as prices for the precious metal have started to reclaim pre-October levels thanks to new demand from investors and China’s growing jewelry market.
After a volatile 2008, during which the metal fell to a low of $771 per ounce in October from a high of $2,250 in May, platinum now looks poised to enjoy a six-month period of strong but stable prices, the metals and chemicals company Johnson Matthey said last week in its annual platinum market report.
Johnson Matthey said platinum could reach as high as $1,350 an ounce in the next half year while staying above $950 an ounce on the low end. Platinum traded at $1,153 an ounce Friday.
Platinum suffered some of its biggest setbacks last year during the decline of the U.S. and European auto industries, two of the metal’s biggest consumers. Auto industry demand declined for the first time in over a decade in 2008, falling 8.2 percent to 3.81 million ounces. 
While increased demand from bullish investors and jewelers may help offset some of the shortfall, it is more likely that a full recovery will only arrive when carmakers see a turnaround.
“I think the major driver right now for the price is the strength in investment demand, which refers partially to the slack in industrial demand,” said Mikhail Stiskin, a metals analyst at Troika Dialog. “That’s what’s keeping platinum at these prices.” 
In 2008, 47 percent of platinum demand came from the auto sector, down from 49 percent in 2007, said David Jollie, one of the Johnson and Matthey report authors.
Forecasting demand from the sector this year remains difficult, Jollie said, given the uncertainty in the industry and producers’ increasing preference for cheaper palladium for autocatalysts. 
“Historically, you have platinum-only catalysts, and now you have platinum-palladium catalysts as well. People are introducing those at a faster rate because it’s economically attractive to do so,” he said.
Platinum demand fell 5 percent to 6.35 million ounces last year, compared with that for palladium, which grew 15,000 ounces, or 0.2 percent, to 6.85 million ounces.
Johnson and Matthey forecasts that palladium will trade between $180 and $280 during the next six months but said it expected to see a decrease in demand because of auto industry travails.
Palladium output could fall this year, the company said, if sales from Russian state reserves continue to decline like they did last year.
Norilsk Nickel, the world’s top palladium producer, reported last month that production of the metal fell 1.2 percent year on year in the first quarter to 590,000 ounces, while platinum production rose 2.2 percent to 141,000 ounces.
Despite a rough 2008, Norilsk continues to have some advantages over competitors, Stiskin said. “Norilsk Nickel has a very low cost base, so it’s been operating very well under the current market conditions so far,” he said.
Norilsk gained 8.4 percent on the week to close at 3402.12 rubles on Friday. That beat the market, with MICEX increasing 5.2 percent to close at 1054.02, and the dollar-denominated RTS put on 8.2 percent to finish off the week at 1013.37.
For now, the rally that Norilsk Nickel and platinum producers are seeing may continue to depend on Chinese jewelry demand, which looks to hold out for at least the near future, Jollie said. 
“You can expect flows of metal into China for jewelry to soften a little bit later in the year ... but still I think it will be a very successful year in terms of demand, because there is a lot of consumer interest in the jewelry,” he said.

TITLE: Vekselberg Tipped for TNK-BP CEO
TEXT: MOSCOW (Bloomberg) — BP Plc said it’s considering candidates to take over as head of its joint venture in Russia after a newspaper reported one of the oil company’s billionaire partners could take the post.
Viktor Vekselberg, currently TNK-BP’s executive director for gas development, is a candidate to become chief executive officer for as long as two years, Vedomosti reported Monday, citing an unidentified person. He would replace interim head Tim Summers, whose term expires on June 1, the newspaper said.
 “We’re studying different options,” Vladimir Buyanov, a spokesman for BP, said by telephone from Moscow on Monday. 
Russia’s third-largest oil producer is looking for a new head after BP and AAR, a group that represents the U.K. crude producer’s billionaire partners in the venture, ended a power struggle that forced the departure of CEO Robert Dudley in December.
Dudley, a U.S. citizen, left Russia on July 24 citing “sustained harassment” during the dispute between BP and shareholders Mikhail Fridman, Len Blavatnik, German Khan and Vekselberg.

TITLE: Gazprom Neft Wants Bigger Stake in Sibir
AUTHOR: By Ira Iosebashvili
PUBLISHER: The St. Petersburg Times
TEXT: Gazprom Neft, the country’s fifth-largest oil producer, launched a new offer to raise its stake in Sibir Energy to as much as 30 percent, a bank representing the company in the buyout said Friday. 
Meanwhile, rumors swirled that the state-owned corporation would purchase an additional stake from a major shareholder, effectively taking over the company. 
Renaissance Capital, which is acting as Gazprom Neft’s agent in the transaction, said the company would increase its position to no more than 30 percent of the British company’s shares. Under British law, a stake of 30 percent would force Gazprom Neft to initiate a formal takeover of the company. 
Gazprom Neft already owns a 16.95 percent stake in Sibir after snapping up 16 percent in April. Sibir’s London-listed shares stopped trading in February after it became known that Shalva Chigirinsky, one of the firm’s major private shareholders, owed the company $325 million.
A 30 percent stake would make Gazprom Neft the single largest shareholder in the company. Renaissance Capital said on Friday that it would begin buying the shares for Gazprom Neft immediately, without saying at what price the shares would be purchased.
Sibir later said in a statement that the previous purchase by Gazprom Neft, which took place last month, was conducted at 500 pence per share and encouraged shareholders to seek that price.
While Gazprom Neft has maintained that it only intends to be a minority shareholder in Sibir, Interfax reported Friday that the state-owned company planned to purchase a 23.3 percent stake in Sibir owned by businessman Igor Kesayev that has been held as collateral by Sberbank. 
In addition to a stake in the Moscow Refinery, Sibir owns half of Salym Petroleum Development, a joint venture with Royal Dutch Shell that has been ramping up production at its Siberian field.
The Moscow government owns an 18 percent stake in Sibir Energy, while about 18 percent of the company’s stock is in free float.
??Chigirinsky has handed over his French Riviera villa and a London mansion to Sibir, which is suing him for $400 million, Reuters reported Friday.
Sibir said Friday that it had “received a charge” over shares in the company, which controls Villa Marina Irina on France’s Cap Martin, and a pledge of future profits from the sale of Hugh House in London’s upscale Belgravia district.
Hugh House was listed for sale on an exclusive British property web site at 45 million pounds ($71.08 million).
Sotheby’s could not comment immediately on Hugh House.
Sibir suggested that the property and shares handed over to the company would not cover the full amount owed, saying it was seeking further security from Chigirinsky.

TITLE: Sberbank Seeks 35% of Opel
PUBLISHER: Combined Reports
TEXT: BERLIN — Canadian auto parts maker Magna International Inc. says it is joining forces with Russia’s biggest lender, Sberbank, in a bid to take a majority stake in General Motors Corp.’s Opel unit.
In a statement released late Friday, Aurora, Ontario-based Magna for the first time offered details of its bid, one of three from companies interested in Opel.
Magna and Sberbank propose to invest a total of $977 million in Opel, based in Ruesselsheim, Germany. An unspecified portion of that would be guaranteed by the German government, the statement said.
A possible deal would leave Magna with 20 percent of Opel and state-controlled Sberbank with 35 percent, while parent GM would retain 35 percent and 10 percent would go to Opel employees, it added.
The brief statement did not offer further details of the bid or say what the implications might be for jobs or production sites.
Magna submitted its proposal for Opel on Wednesday, along with rival bids from Italy’s Fiat SpA and New York-based buyout firm Ripplewood Holdings LLC.
Fiat has said it wants to wrap GM Europe, including Opel and British sister brand Vauxhall, into a global car-making powerhouse along with Chrysler LLC. It says its offer calls for fewer than 10,000 job cuts across Europe.
On Saturday, German Economy Minister Karl-Theodor zu Guttenberg said that Fiat had made adjustments to its plan. He said the changes involved aspects such as risk-sharing and capital contributions, but did not give details.
Ripplewood has not given details of its bid.
Two governors of German states that have Opel plants said Friday they see Magna’s bid as the most promising, but a third termed it unacceptable, arguing that it would lead to too many job cuts in his state.
Frank-Walter Steinmeier, Germany’s center-left vice chancellor, signaled that Magna should be given priority, but Guttenberg, the conservative economy minister, named no favorite.
“Magna has put forward a very solid concept,” Steinmeier was quoted as telling the Bild daily Saturday. “Now the last questions of detail must be cleared up quickly with GM and Magna so that as many jobs as possible can be preserved.”
GM faces a June 1 deadline to restructure or file for bankruptcy. Berlin is keen to ensure the future of Adam Opel GmbH — which employs some 25,000 people in Germany.
German officials stress that it is up to GM to choose Opel’s investor, while Berlin will decide whether and how to lend state support to the selected bidder.
German Chancellor Angela Merkel spoke by telephone to Russian Prime Minister Vladimir Putin on Saturday and met with Magna’s co-CEO Siegfried Wolf and chairman Frank Stronach on Sunday. She will meet Fiat CEO Sergio Marchionne in the “first half” of the week, a government spokesman in Berlin said.
“You can expect the need for decisions to reach a kind of climax around mid-week,” Merkel told reporters in Berlin.
(AP, Bloomberg)

TITLE: Competing for Privilege
AUTHOR: By Dmitry Trenin
TEXT: Sooner or later, it was bound to happen. While Russia was determined to create a center of power in the Commonwealth of Independent States, the enlarged European Union started paying more attention not only to the “new Eastern Europe” (Belarus, Moldova and Ukraine), but also to the South Caucasus and Central Asia — all areas of what is still being called, with decreasing validity, the former Soviet Union. Europe’s Eastern Partnership with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine is the clearest statement so far of its capability and willingness to project its soft power onto what Moscow regards as its hereditary sphere of influence. 
Few in Moscow were amused by the EU’s move, sponsored as it was by Stockholm and Warsaw and presented in Prague. The Kremlin sees the Eastern Partnership — under the guise of innocent-enough goals that few could oppose, such as increased trade and cooperation — as yet another geopolitical attempt by the West to wean these countries away from Moscow’s orbit. The tension was seen at the EU-Russia summit on Friday in Khabarovsk, despite the smiles and friendly protocol that was observed. 
For some, the only solace is that Eastern Partnership may be too weak and unsustainable for a real breakthrough. With just a few hundred million euros in the bank and no prospect of EU membership for any of the six former Soviet republics in the foreseeable future, the initiative might as well fizzle out after the Swedish EU presidency in the second half of 2009. When it comes to relations with Russia, the EU is notoriously disunited. 
Whether apprehensive or dismissive, Moscow sees the situation in terms of a geopolitical competition between itself (“defending its birthright”) and an assertive West (“expanding its influence.”) Some may even remember the mock warnings heard from some U.S. observers a decade ago: For Russia, NATO’s enlargement to the east will have very “light” consequences compared with the EU’s. To those Russians who at the time took the position of “anything but NATO,” they quoted the old Chinese curse, “be careful what you wish for.” Now, these warnings are being vindicated. 
The Russians are right about increased competition in their neighborhood but wrong about its nature and its drivers. The name of the game is not dominance and allegiance but freedom and models of development. The new Eastern Europeans and nations of the South Caucasus are not a prize to be won or lost in a global geopolitical game. They decide for themselves who they want to align themselves with — the EU, Russia or perhaps some combination of the two. 
The choice is not a simple “switching of alliances.” For all the talk of a Brussels diktat, the six countries — just like the Central Europeans before them — feel much more comfortable dealing with a nonhegemonic EU than a heavy-handed Moscow. Europe may see the six nations as backward and requiring economic assistance, but it treats them as independent. Moscow, by contrast, unabashedly views the neighbors as its own “zone of interests” (or “privileged interests,” as President Dmitry Medvedev called it.) This creates apprehension in those countries that remember very well what it is like to spend decades under Moscow’s control. It is noteworthy that in the aftermath of the Georgia war last August, not a single Russian ally or integration partner followed Moscow in recognizing Abkhazia or South Ossetia. They all refused not out of any affection or sympathy for Georgia or President Mikheil Saakashvili. They were simply sending a Moscow a distinct message: We are independent states, not adjuncts of a former superpower. 
The issue is not just money either. Although money is important, especially in a crisis, it is the opportunity that the world’s largest economy generates that motivates Russia’s neighbors. By contrast, Russia remains an economy largely built on energy and raw material resources, and once it phased out subsidies for its gas deliveries and started using economic sanctions for political ends, its power of attraction diminished greatly. Countries that seek paths to faster development and economic modernization look to the West, not to Moscow.
Whether the six Eastern Partnership countries succeed or fail makes a lot of difference to themselves, the EU and Russia. They need all the support and attention from Brussels and the EU member states that they can get. Ukraine, in particular, is crucial. Putting the divisive NATO issue to one side, Kiev and Brussels need to focus on the EU to help modernize the largest country in Eastern Europe. Moldova, one of the EU’s smallest and poorest new partners, requires urgent attention in Brussels to prevent a social and economic meltdown on Europe’s doorstep. In Moldova and the South Caucasus, the EU needs to become more present and effective as Russia’s partner in resolving the many conflicts. And as Europe diversifies its energy imports, it will need to become more seriously involved with the countries in the Caspian region. This calls for a long-term EU strategy and a coordinated foreign policy. This is a tall order, but if successful it will be a quantum leap for Europe. 
Ironically, Russia is likely to benefit from Europe’s cohesion and its neighbors’ success. Moscow’s obsession with the 19th-century notions of geopolitics is a drag on its own post-imperial adjustment. Only when it is fully divested of these hang-ups will it be able to find a fitting place and a useful role for itself in the globalized environment. 
In the long term, Russia will probably not follow its neighbors into the EU, although joining a pan-European economic area and a European-Atlantic security compact would make a lot of sense. Russia will stay as a separate unit, but it will recognize the EU not as its geopolitical rival, but as a regional leader and a rich source of modernization. The Kremlin will live to enjoy the proximity and learn to profit from the occasional friction. Finally, it will also learn the art of dealing with smaller neighbors through methods other than dominating, bullying or punishing them. 
By 2030, United Europe for Russia may begin just beyond Belgorod and Bryansk. This will be a huge relief for a country whose standing in the world will be decided not by what occurs in Europe but by what happens in Asia. 

Dmitry Trenin is director of the Carnegie Moscow Center.

TITLE: Socialism With a Truly Humane Face
AUTHOR: By Alexei Bayer
TEXT: I confess: I welcome the global economic crisis at some level. If anything, it has curbed unbridled free-market triumphalism and cast doubt on the notion that greed is the driving force of progress. It may be temporary, but attitudes that have compelled the best and the brightest to flock to the financial services industry are changing. Concepts such as government regulation and public spending to promote the common good and social welfare are enjoying a resurgence. 
But even as old certainties about free-market capitalism are questioned, socialism remains unlikely to be rehabilitated. The Soviet experience can be credited with that. Indeed, the late unlamented Soviet Union delivered on virtually none of its extravagant promises. Its economic model, declared to be the way of the future, never worked properly and collapsed under the weight of its own inefficiency. It created some of the world’s worst pollution and left a legacy of some of the sickliest nations on earth. 
While claiming a moral high ground, it actually bred cynicism, deception and duplicity. Millions were murdered or perished as a result of its political terror, social experimentation and suppression of dissent. Even its few successes, from industrialization to public education and high literacy, could have been achieved at a far lower cost, as many newly industrialized countries in Asia have demonstrated. 
Soviet socialism had catastrophic consequences for Russia and the many nations that fell into its orbit. 
Yet if you step away from the Soviet deformities, there are many other normal, healthy forms of socialism. Take Israel, for example, which was created by some of the same people who plotted a socialist revolution in Russia and helped shape the ideology upon which the Soviet Union was built. Israel had socialism but without Lenin or Stalin. Leftist Zionists were remarkably tolerant of dissent. They didn’t persecute Vladimir Jabotinsky’s revisionist Zionists. While secular and atheistic, they lived side by side with the ultra-orthodox. They even welcomed Jews who opposed Zionism. Their kibbutzim, unlike Soviet collective farms, were truly voluntary. There was no suppression of entrepreneurs or confiscation of private property. 
Israel’s socialism has been transformed over the years, which is yet another sign of its flexibility. The kibbutzim movement is in a deep and possibly terminal crisis, and the country has adopted a more American entrepreneurial model. But even though the Labor party, which created modern Israel, has lost much of its strength, Israel retains many of its socialist features, which over a million recent Soviet immigrants experienced firsthand by getting free Hebrew lessons, absorption assistance, subsidies, social services and other perks from the state. 
Socialist perks are something that newcomers from the Soviet Union relish. What they seem to like a lot less, being the products of Soviet socialism, is the camaraderie and tolerance that still unites at least the Jewish population of Israel. That the Russian-speaking Our Home Is Israel party, led by former Moldovan Avigdor Lieberman, is seething with visceral, Stalinesque hatred toward Israel’s Arab minority is not surprising. But it is equally eager to pick fights with other Jews. As befits Lenin’s heirs, Lieberman’s party reserves its strongest dislike for those who share its views, such as Shas, another right-wing party that happens to be religious and mainly Sephardic. 
Ironically, even Israel’s example of a healthy, functioning socialism is in danger of being undermined by the Soviet version of the creed. 

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

TITLE: A World-Beating Soviet Sound
AUTHOR: By Elmira Kuznetsova
PUBLISHER: Special to The St. Petersburg Times
TEXT: There is a music shop in Yekaterinburg that gets letters every year from all over Europe about an instrument that it doesn’t sell. 
The reason they write is Vladimir Kuzmin, the man behind the Polivoks synthesizer, an instrument with a design based on Soviet military radio that was once one of the least coolest in Soviet times but is now one of the hippest amongst Western bands. 
Franz Ferdinand’s latest album “Tonight” is only one of many foreign acts, including Goldfrapp and Rammstein, to have used the distinctive sound of the synthesizer. 
Franz Ferdinand said in interviews to publicize their latest album that they were fascinated with the synthesizer once they saw its strange design and even stranger sounds. It is a “machine that looks like the control panel of a Soviet tank, with big knobs and dials, Cyrillic labels everywhere,” said bandleader Alex Kapranos. 
Synthesizers became popular in the late 1970s in the Soviet Union as Western music began to filter through the Iron Curtain. There was little chance of buying foreign instruments, which is where Kuzmin, a circuit designer in Yekaterinburg, came in. 
His design was produced by the Vector plant in the Urals as a synthesizer for nonprofessional musicians that could recreate the sound heard on foreign LPs of that time. 
Polivoks production began in 1982, costing a huge 920 rubles, the equivalent of 8 months’ salary at the time. Despite the price, the demand for the Polivoks was huge. By 1990 when production stopped, more than 100,000 instruments had been sold. 
In the 1980s, the Soviet Union began to open up, and musicians could buy American and Japanese synthesizers, with the Polivoks losing any sheen that it had possessed. 
“It was considered absolutely uncool to play a Polivoks because it was so cheap and Soviet and uncivilized, and everyone was dreaming about a Yamaha DX-7,” said rock critic and historian Artemy Troitsky. 
Today, the Polivoks has found a new generation of fans among famous foreign acts because of two things, said Troitsky. “One, it is really cool to use rare and vintage analog synthesizers, and reason No. 2 is that a Polivoks produces very weird sounds that you cannot produce on any Western instruments.” 
It is also loved by less-famous foreign musicians who buy secondhand copies on the Internet. 
“The sound is strangely off, something I haven’t heard from other synths and haven’t been able to really emulate on virtual analogs,” said Kai Niggemann, an electronic musician from Nordrhein-Westfalen in Germany who bought his Polivoks in a Polish pawn shop for the equivalent of 70 euros. “I love the feel of the buttons and knobs.” 
“It is full of surprises and errors,” said Mark Bihler, a music engineer from Berlin, who spent 800 euros on eBay for his Polivoks, which he received from Saratov with the help of a friendly train conductor. “Perfection is not interesting. Character is what triggers creativity. And the Polivoks has so much character. It never sounds sweet and clear, it sounds nasty and aggressive.” 
By comparison, Russian musicians retain a degree of suspicion. “It burns down after five minutes of working,” and “Russians are just not any good in building instruments” are just two of the comments on music forums. 
Kuzmin does not sell the Polivoks in his shop but is proud when letters from Finland, France and Germany arrive asking about his creation. 
“Polivoks has a mellow and aggressive sound, which turned out to be very timely for contemporary music,” he said in a telephone interview from Yekaterinburg. 
“There are wide opportunities of creating original sounds, a showy design — my wife Olimpiada is the author of the design. I guess that’s why it has remained popular throughout the years.”

TITLE: Commission to Guard Against False History
AUTHOR: By Nabi Abdullaev
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev has ordered the creation of a new commission tasked with countering attempts to rewrite history to the detriment of Russia’s interests, the Kremlin said Tuesday. 
The presidential decree establishing the commission follows a May 8 video address posted on Medvedev’s web site in which the president complained that attempts to falsify history were becoming “increasingly harsh, depraved and aggressive.” 
The initiative appears to be part of a Kremlin drive to defend its vision of the country’s 20th-century history. 
The Kremlin has bristled at Ukraine’s efforts to get the Stalin-era Holodomor famine to be declared as genocide and the Baltic states’ anti-Soviet positions on World War II. 
At the same time, Russian historians have repeatedly accused the Kremlin of trying to whitewash Soviet history in school textbooks and elsewhere. 
Medvedev’s chief of staff, Sergei Naryshkin, is to head the 28-member commission, which is charged with collecting and analyzing information about attempts to diminish Russia’s prestige by falsifying history, according to the decree signed by Medvedev last week and published Tuesday. 
The commission, which is to meet at least twice annually, is also to coordinate the government’s efforts to combat such falsifications, the decree says. 
In his May 8 video address on the eve of the Victory Day holiday celebrating the defeat of Nazi Germany in World War II, Medvedev said Russians find themselves “in a situation in which we have to defend the historical truth and once again prove facts that not so long ago seemed most clear. 
“It is difficult and sometimes even creepy. But it is necessary to do,” he said. 
Members of the new commission include senior officials — primarily deputy ministers and security service officials — historians, Kremlin spin doctors and State Duma deputies. 
Alexei Makarkin, a political analyst with the Center for Political Technologies, welcomed the initiative, saying it could help the state formulate a coherent policy toward Soviet history and lead to the opening of archives for researchers. 
Should Russia’s historical archives — many of which are maintained by the military and the secret services — remain closed, the entire campaign would degenerate into a “defense of the historical myth about Russia in the interests of the country’s rulers,” said Dmitry Oreshkin, an analyst with the Mercator think tank. 
The creation of the new commission comes on the heels of a bill submitted to the Duma by a group of deputies from the ruling United Russia party that would criminalize attempts to rehabilitate Nazism in former Soviet republics. 
Under the bill, which is likely to sail easily through both houses of the parliament, Russian and foreign citizens could be sent to prison for up to three years for accusing the Red Army of atrocities or illegal occupation during World War II, an allegation commonly lodged in the Baltic countries. 
If such accusations are made by an official or disseminated in the media, the crime would be punishable by up to five years in prison, according to the legislation. 
The bill, spearheaded by Emergency Situations Minister Sergei Shoigu, also calls for severing ties with countries that officially revise the history of World War II and barring the leaders of such countries from entering Russia.

TITLE: Komodo Dragons Attack In Indonesia
AUTHOR: Irwan Firdaus
PUBLISHER: The Associated Press
TEXT: KOMODO ISLAND, Indonesia — Komodo dragons have shark-like teeth and poisonous venom that can kill a person within hours of a bite. Yet villagers who have lived for generations alongside the world’s largest lizard were not afraid — until the dragons started to attack.
The stories spread quickly across this smattering of tropical islands in southeastern Indonesia, the only place the endangered reptiles can still be found in the wild: Two people have been killed since 2007 — a young boy and a fisherman — and others were badly wounded after being attacked unprovoked.
Komodo dragon attacks are still rare, experts note. But fear is swirling through the fishing villages, along with questions on how best to live with the dragons in the future.
Main, a 46-year-old park ranger, who like many Indonesians goes by a single name, was doing paperwork when a dragon slithered up the stairs of his wooden hut in Komodo National Park and went for his ankles dangling beneath the desk. When the ranger tried to pry open the beast’s powerful jaws, it locked its teeth into his hand.
“I thought I wouldn’t survive... I’ve spent half my life working with Komodos and have never seen anything like it,” said Main, pointing to his jagged gashes, sewn up with 55 stitches and still swollen three months later. “Luckily, my friends heard my screams and got me to hospital in time.”
Komodos, which are popular zoos in both the United States and Europe, grow to be 10 feet (3 meters) long and 150 pounds (70 kilograms). All of the estimated 2,500 left in the wild can be found within the 700-square-mile (1,810-square-kilometer) Komodo National Park, mostly on its two largest islands, Komodo and Rinca. The lizards on neighboring Padar were wiped out in the 1980s when hunters killed their main prey, deer.
Though poaching is illegal, the sheer size of the park — and a shortage of rangers — makes it almost impossible to patrol, said Heru Rudiharto, a biologist and reptile expert. Villagers say the dragons are hungry and more aggressive toward humans because their food is being poached, though park officials are quick to disagree.
The giant lizards have always been dangerous, said Rudiharto. However tame they may appear, lounging beneath trees and gazing at the sea from white-sand beaches, they are fast, strong and deadly.
The animals are believed to be descended from a larger lizard on Indonesia’s main island Java or Australia around 30,000 years ago. They can reach speeds of up to 18 miles (nearly 30 kilometers) per hour, their legs winding around their low, square shoulders like egg beaters.
When they catch their prey, they carry out a frenzied biting spree that releases venom, according to a new study this month in the journal Proceedings of the National Academy of Sciences. The authors, who used surgically excised glands from a terminally ill dragon at the Singapore Zoo, dismissed the theory that prey die from blood poisoning caused by toxic bacteria in the lizard’s mouth.

TITLE: Safina Humbles Outclassed Briton
AUTHOR: By Howard Fendrich
PUBLISHER: The Associated Press
TEXT: PARIS — Lleyton Hewitt lunged and whiffed at some serves, his racket hitting only air. He simply stood and watched other balls whirr past.
Over and over and over again Sunday, Hewitt’s opponent in the French Open’s first round, the 6-foot-10 Ivo Karlovic, smacked aces from on high, finishing with a tournament-record 55. Those easy points helped Karlovic take the first two sets — and made Hewitt think back to the day in 2003 when he was the defending champion at Wimbledon and lost his opening match to the tallest player in tour history.
“The angle he gets, you can’t touch a lot of his serves,” Hewitt said. “It’s physically impossible.”
This time, as the 26th-seeded Karlovic tired in heat that topped 80 degrees, Hewitt grew more and more comfortable, and the two-time major champion’s bothersome hip looked fine while he climbed all the way back for a 6-7 (1), 6-7 (4), 7-6 (4), 6-4, 6-3 victory.
How could a player who compiles 55 aces possibly lose?
“Don’t know,” was Hewitt’s simple reply.
Karlovic was similarly befuddled, saying: “It is difficult to explain.”
Theirs amounted to the most riveting match of Day 1 at the only Grand Slam tournament that starts on a Sunday. 
Otherwise, there were straight-set wins for defending champion Ana Ivanovic, Andy Murray and Marat Safin — who is appearing in his final French Open, but please be sure not to ask him about that — and straight-set exits for 2004 champion Gaston Gaudio and two-time major winner Amelie Mauresmo.
No. 16 Mauresmo and No. 19 Kaia Kanepi were the seeded women who lost, while Karlovic was the only seeded man who departed. No. 9 Victoria Azarenka and No. 11 Nadia Petrova — who beat Lauren Embree of Marco Island, Fla. — won, as did No. 7 Gilles Simon, No. 8 Fernando Verdasco, No. 13 Marin Cilic and No. 14 David Ferrer.
Safin is seeded 20th, and his talent and temperament long have conspired to make him as capable of reaching the semifinals at Roland Garros, something he did in 2002, as he is of falling in the first round, something he did in 2006.
He reached the second round this year by defeating Alexandre Sidorenko of France 6-4, 6-4, 6-4. When the 29-year-old brother of the tournament’s top-seeded woman, Dinara Safina, walked off the court, he was asked by a French TV interviewer whether this is his last appearance at Roland Garros. Safin replied: “I’m tired of talking about this.”
Pressed, he said: “Well, yeah, I decided, I think, to stop. I had my 12 years of my career. It was a great experience, but it’s time to move on.”
Like Safin, Hewitt has been ranked No. 1 and has won a U.S. Open title. Hewitt, who is a year younger, has given no indication he plans to walk away from the sport anytime soon.

TITLE: Shearer Warns Newcastle May Nose Dive Further
PUBLISHER: Agence France Presse
TEXT: BIRMINGHAM, England — Alan Shearer has warned owner Mike Ashley that Newcastle risk repeating a Leeds United style nose-dive into oblivion unless he sorts out the host of problems destroying the club.
Ashley was at Villa Park on Sunday to watch Newcastle surrender their 16-year membership of the Premier League thanks to an own goal from Damien Duff.
Now he will meet with Shearer this week to discover whether the former Newcastle striker is willing to take the manager’s job full-time.
Shearer admits he has been bitten by the managerial bug and would like to remain at the helm to try to regain Premier League status at the first attempt next season.
But he has seen so many things wrong at the club in the past few months, and for long periods before that, that he fears the club could implode completely, like Leeds who are now in League One, unless major changes are made.
“There are a million things wrong with this club that need to be sorted out. I know people will make comparisons with Leeds United and I understand that. The people who are in charge have to decide what they want to do and what direction they want the club to go,” Shearer said.
“I have my own ideas on what needs to be done and I can see why people say management is addictive. There has to be a major overhaul and players need to go out and players need to come in. The football club has to decide where it wants to go from here.”
Shearer is expected to meet with Ashley in the next 48 hours and in the aftermath of the defeat at Villa Park he refused to elaborate on his future.
“I know everyone wants to know what I am going to do. You won’t believe me when I say I have not had time to really think about it,” he said.
“But we need to have the meeting sooner rather than later and make decisions. It does not take a genius to see what is wrong with the club.
“Those guys have some major decisions to make. There are millions of questions to be answered. I will give them my thoughts but they might not ask me to be the manager.”
Shearer admits he was shocked at the state of disrepair he found the club in when he took over eight games ago and he feels certain members of the playing staff have let the club down.
He certainly felt short-changed by the lack of passion and desire at Villa Park.
“I am not too sure everyone has played to their maximum. I have told them all that they can look for all the excuses they like. They might not think I have been good enough, Mike Ashley has not been good enough, or Kevin Keegan, Joe Kinnear and Chris Houghton, but it is what is in the dressing room that has not been good enough,” added Shearer.
“There are huge problems at Newcastle. It has been going on for several seasons. The worst three teams get relegated and unfortunately for me Newcastle are one of them.
“I am hurting and I am raw inside right now. We have let down our fantastic supporters and there are a hell of a lot of things that have gone wrong.”

TITLE: N. Korea Declares It Conducted Nuclear Tests
AUTHOR: By Jean Lee
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea — North Korea claimed it carried out a powerful underground nuclear test Monday — much larger than the one conducted in 2006 — in a major provocation in the escalating international standoff over its rogue nuclear and missile programs.
The country’s official Korean Central News Agency said the regime “successfully conducted one more underground nuclear test on May 25 as part of measures to bolster its nuclear deterrent for self-defense.”
Russia’s Defense Ministry confirmed an atomic explosion at 9:54 a.m. (0054 GMT) in northeastern North Korea, estimating the blast’s yield at 10 to 20 kilotons — comparable to the bombs that flattened Hiroshima and Nagasaki.
Hours later, the regime test-fired three short-range, ground-to-air missiles, the Yonhap news agency reported, citing unnamed sources. UN Security Council resolutions bar North Korea from engaging in any ballistic missile-related activity.
President Barack Obama called the moves “blatant defiance” of the Security Council and a violation of international law that would only further isolate North Korea.
North Korea’s claims “are a matter of grave concern to all nations,” he said, calling for international action in a statement from Washington. “North Korea’s attempts to develop nuclear weapons, as well as its ballistic missile program, constitute a threat to international peace and security.”
British Prime Minister Gordon Brown condemned the test as “erroneous, misguided and a danger to the world.”
Japanese Prime Minister Taro Aso said the Security Council will meet at 4:30 p.m. Monday in New York.
“North Korea’s nuclear test poses a grave challenge to nuclear nonproliferation and clearly violates U.N. Security Council resolutions,” he said in Tokyo. “We are not tolerating this at all.”
Even China, North Korea’s traditional ally, issued rare criticism of Pyongyang, with the Foreign Ministry saying in a statement posted on its Web site that Beijing was “resolutely opposed” to the test.
North Korea’s bold defiance raises the stakes in the standoff over its nuclear program. In the past two months, Pyongyang has launched a rocket despite international calls for restraint; abandoned international nuclear negotiations; restarted its nuclear plants; and warned it would carry out the atomic test as well as long-range missile tests.
The rise in tensions comes amid questions about who will succeed impoverished North Korea’s authoritarian leader, 67-year-old Kim Jong Il, who is believed to have suffered a stroke last August. North Korea also has custody of two American journalists — accused of entering the country illegally and engaging in “hostile acts” — who are set to stand trial in Pyongyang on June 4.
“This is a political act more than a military act,” said Jim Walsh, an international security expert at the Massachusetts Institute of Technology.
Walsh said domestic factors related to North Korea’s political transition were likely to be the main factor.
Monday’s atomic test was conducted about 50 miles (80 kilometers) northwest of the northern city of Kilju, Russian Defense Ministry spokesman Alexander Drobyshevsky said, speaking on state-run Rossiya television.
Kilju, in the northeastern province of North Hamgyong, is where North Korea conducted its first nuclear test in October 2006 in a surprise move that also angered China and drew wide-ranging sanctions from the Security Council.
An emergency siren sounded in the Chinese border city of Yanji, 130 miles (200 kilometers) to the northwest. A receptionist at Yanji’s International Hotel said she and several hotel guests felt the ground tremble.
North Korea boasted that Monday’s test was conducted “on a new, higher level in terms of its explosive power and technology of its control” than in 2006.
Pyongyang is believed to have enough weaponized plutonium for at least a half-dozen atomic bombs. However, experts say scientists have not yet mastered the miniaturization needed to mount a nuclear device onto a long-range missile.
Ten to 20 kilotons would be far more than North Korea managed in 2006. U.S. intelligence officials said the 2006 test measured less than a kiloton; 1 kiloton is equal to the force produced by 1,000 tons of TNT. 
However, Russia estimated the force of the 2006 blast at 5 to 15 kilotons, far higher than other estimates at the time.

TITLE: Isolated Myanmar Lashes Out Over Trial of Suu Kyi
PUBLISHER: Agence France Presse
TEXT: YANGON — Myanmar’s military regime on Monday lashed out at international criticism of the trial of Aung San Suu Kyi, as the European Union called for the immediate release of the pro-democracy leader.
As the trial of the Nobel Peace Prize winner entered its second week, the increasingly isolated junta gave an apparent concession when it said it would reopen the court to diplomats and journalists for one day on Tuesday.
Aung San Suu Kyi is set to testify at the trial at the notorious Insein prison on the same day, her party spokesman Nyan Win said.
“She will testify tomorrow, she will be questioned by the judge,” Nyan Win, who is also one of her lawyers, told reporters. “This was a surprise to us because we need more time to discuss the case with Daw Aung San Suu Kyi.”
Aung San Suu Kyi faces up to five years in jail if convicted of breaching her house arrest over an incident in which an American man, John Yettaw, swam to her lakeside house because he thought she was going to be assassinated.

TITLE: Howard's 24 Lead Magic Past Cavaliers for 2-1 Lead
AUTHOR: By Tom Withers
PUBLISHER: The Associated Press
TEXT: ORLANDO, Florida — LeBron James had no shot. Dwight Howard scored 24 points — 14 on free throws — and Rafer Alston added 18 as the Orlando Magic, sick of seeing replays of James’ dramatic Game 2 buzzer-beater, downed the Cleveland Cavaliers 99-89 on Sunday night to take a 2-1 lead in an Eastern Conference finals getting nastier by the minute.
James scored 41 on just 11-of-28 shooting and missed five free throws in the fourth quarter. But once again, Cleveland’s superstar didn’t get enough help from his teammates. Mo Williams, who needed four stitches to close two gashes around his left eye after being elbowed in the first half, Delonte West and Zydrunas Ilgauskas shot a combined 13-of-37.
Game 4 is Tuesday night.
The first two games of the series in Cleveland were each decided by one point. This one was resolved by elbows, shoves and hard fouls.
Howard, Ilgauskas and Cleveland’s Anderson Varejao all fouled out as the officials called 58 personals, handed out two technicals, a flagrant and spent half the night stepping between players on both sides as tempers flared inside an overheated Amway Arena.
“We just kept fighting. That’s what we've got to do, we fight to the end,” Howard said. “We can’t worry about nothing, we can’t worry about the calls, can’t worry about nobody else. We just got to get out there and play.”
When the referees weren’t making peace, they were sending players to the free-throw line.
Unlike Games 1 and 2, the Magic didn’t fall behind by double digits and need to rally. They got out fast, stayed close despite Howard’s early foul trouble and put the Cavs away at the line.
Howard, a notoriously poor foul shooter, went 14-of-19 from the line and the Magic made 39 of 51 attempts. In the fourth quarter alone, Orlando made 19 of 23 to hold off the top-seeded Cavaliers, who began the playoffs with eight straight wins and have now dropped two of their last three.
Cleveland better figure out a way to win in steamy Florida fast. The Cavs, who were thumped here by 29 on April 3, have six lost six of their last seven in Orlando.
The Magic seem to have a spell over the Cavs.
Despite his lack of help, James kept Cleveland within striking distance in the fourth and scored on a three-point play while getting Howard’s fifth foul with 2:34 to play to pull the Cavs to 90-86.

TITLE: Powell Fires Back in Debate on GOP’s Future
AUTHOR: By Douglass Daniel
PUBLISHER: The Associated Press
TEXT: WASHINGTON — Moderate Republicans to conservative Republicans: Turn down the volume — especially on Rush Limbaugh — and open your minds. The party’s future might be at stake.
Such warnings about the GOP’s right wing, along with finger wagging about a “shrill” and “judgmental” tone, marked the moderate response in the latest back-and-forth within the Republican Party.
Colin Powell and Tom Ridge argued on television’s Sunday talk shows that conservatives are steering the GOP too far to the right and not listening to other views within the party. Newt Gingrich, seen as a potential presidential candidate in 2012, agreed about broadening the base while political guru Karl Rove challenged Powell to lay out his vision and “back it up” by helping elect Republicans.
“I believe we should build on the base because the nation needs two parties, two parties debating each other,” said Powell, the nation’s top military officer under President George H.W. Bush and secretary of state for President George W. Bush.
“But what we have to do is debate and define who we are and what we are and not just listen to dictates that come down from the right wing of the party,” he said.
Former Vice President Dick Cheney and Limbaugh, the king of talk radio, have openly mocked Powell as a Republican in name only, citing his endorsement of Democrat Barack Obama over Republican John McCain in last year’s presidential race.
Powell reaffirmed that he is a solid Republican and said the GOP must be more inclusive or risk giving Democrats and independents the chance to scoop up disaffected moderate Republicans. He detailed his presidential voting history — yes to GOP nominees Ronald Reagan through the younger Bush, but yes also to Democrats John F. Kennedy, Lyndon Johnson and Jimmy Carter.
“If we don’t reach out more, the party is going to be sitting on a very, very narrow base. You can only do two things with a base. You can sit on it and watch the world go by, or you can build on the base,” Powell said.
Fellow GOP moderate Ridge, the former Pennsylvania governor and homeland security secretary under George W. Bush, said if the GOP wants “to restore itself, not as a regional party, but as a national party, we have to be far less judgmental about disagreements within the party and far more judgmental about our disagreement with our friends on the other side of the aisle.”
Gingrich, the former House speaker, insisted he didn’t want to pick a fight with Cheney. But he offered this advice: “I think Republicans are going to be very foolish if they run around deciding they’re going to see how much they can purge us down to the smallest possible base.”
Cheney, defense secretary when Powell was Joint Chiefs of Staff chairman during the Gulf War in 1991, has made clear that he would rather follow broadcaster Limbaugh than Powell into political battle over the GOP’s future. “I didn’t know he was still a Republican,” Cheney said in a television interview two weeks ago.
Limbaugh has called Powell “just another liberal,” said he should become a Democrat and charged that Powell endorsed Obama based on race. Powell and Obama are black.
In remarks to business leaders in Boston this past week, Powell took on such high-profile criticism, saying, “I may be out of their version of the Republican Party, but there’s another version of the Republican Party waiting to emerge once again.”
Like Cheney, Rove said he would pick Limbaugh over Powell, but said it’s moot. “Neither one of those are going to be people who are offering themselves for office. ... This is a false debate that Washington loves.”