SOURCE: The St. Petersburg Times
DATE: Issue #1483 (45), Tuesday, June 16, 2009
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TITLE: Lukashenko Skips
Moscow Summit
AUTHOR: By Nabi Abdullaev
PUBLISHER: The St. Petersburg Times
TEXT: Belarussian President Alexander Lukashenko skipped a key security summit Sunday, raising the stakes in an escalating trade conflict with Moscow. 
Lukashenko’s snub prompted a rebuke from President Dmitry Medvedev, who complained that the Belarussian leader had not even bothered to call himself to explain his absence. 
“I would like to say that leaders should act as partners in such a situation,” Medvedev told reporters. 
“Alexander Grigoryevich Lukashenko did not call me on the telephone and tell me that he had made the decision not to come, but staff from his administration called us,” he said. 
He also said Belarus’ actions “excessively politicized” a technical trade issue. 
Belarus’ Foreign Ministry said Lukashenko decided not to attend because Russia was “openly discriminating” of a ban last week on most Belarussian dairy goods. 
“Such actions objectively undermine the economic security” of Belarus and thus its overall security, the ministry said in a statement on its web site. 
Four leaders of the six-nation Organization of the Collective Security Treaty, or CSTO, agreed at the one-day summit in Moscow to create a collective rapid response force tasked with protecting the territorial integrity, sovereignty and security of the treaty’s member countries. 
The joint military task force was a Russian initiative that Moscow strongly pushed after the military conflict in Georgia last summer. 
The two states that did not sign the agreement were Belarus and Uzbekistan. It was not clear Sunday what prevented Tashkent from approving the document. 
Belarus also was to take over the formal leadership of the CSTO from Armenia at the summit Sunday. Medvedev said Russia would assume the leadership until Belarus resumed its work in the group. 
After the summit, Belarus’ Foreign Ministry said all decisions made at the talks were illegitimate. Ministry spokesman Andrei Belov said Russian officials could not push through the summit agenda without Lukashenko because CSTO rules require the consensus of all member states on issues related to security. 
CSTO consists of Armenia, Belarus, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan. 
Lukashenko has linked the ban on Belarussian dairy products to his reluctance to recognize the independence of Georgia’s Moscow-backed regions of Abkhazia and South Ossetia. Russian authorities say the dairy products simply do not meet Russian quality and sanitary standards. 
The Federal Consumer Protection Service banned about 1,200 dairy products on June 9, leaving just 58 goods available for sale. 
But the economic frictions between the two countries date back to 2007, when Russia increased prices for natural gas and demanded that Minsk cede control of its gas transportation system leading to Europe. 
Gas also has a role in the latest dispute. Deputy Prime Minister Igor Sechin on Thursday inaugurated the second line of the Baltic Pipeline System, which will bypass Belarus in delivering Russian gas to Europe, depriving Minsk of up to $700,000 in annual revenues, or close to 5 percent of the country’s annual budget. 
In response, Lukashenko ordered his government to consider introducing border and customs controls on the Russian border. 
Belarussian officials said Sunday that they are prepared to do this swiftly, Interfax reported. 
Sergei Markov, a State Duma deputy with United Russia, said Sunday that Lukashenko was “blackmailing the Kremlin by freezing his military and political cooperation in order to get economic perks.” 
Lukashenko, who is commonly referred to as the last dictator in Europe, had been making moves recently to break Belarus’ isolation with the West and thus win some leverage in his dealings with Russia. 
He has released political dissents and traveled to the Vatican to meet the pope. 
His efforts apparently have been rewarded. After Russia froze a $500 million loan to Belarus, the International Monetary Fund agreed to issue a $1 billion loan to help the country stabilize its economy amid the crisis.

TITLE: Russia Seeks New Role Ahead of Summit
AUTHOR: By Lyubov Pronina
PUBLISHER: Bloomberg
TEXT: MOSCOW — President Dmitry Medvedev will seek to increase Russia’s role in resolving the conflict in Afghanistan at a regional security summit that may also include talks with reelected Iranian leader Mahmoud Ahmadinejad.
Russia’s contribution may include “giving Afghanistan practical assistance in restoring its economy and expanding the practice of regular political consultations,” Sergei Prikhodko, an aide to Medvedev, told reporters in Moscow yesterday.
Medvedev will meet with his Afghan and Pakistani counterparts, Hamid Karzai and Asif Ali Zardari, during a summit of the Shanghai Cooperation Organization, a six-country security alliance that includes China and four former Central Asian Soviet republics. The two-day forum, which starts today in the Russian city of Yekaterinburg, will be followed late tomorrow by the first summit of the so-called BRIC countries.
Medvedev has repeatedly said Russia is prepared to cooperate with the U.S. to bring order to Afghanistan, where the Soviet army fought a nine-year Afghan war that ended in 1989.
U.S. President Barack Obama is adding 17,000 combat personnel and 4,000 trainers to Afghanistan, a conflict he has called the “central front” of the campaign against terrorism.
Russia won’t send troops to join the United Nations-mandated International Security Assistance Force in Afghanistan, led by the U.S. and its North Atlantic Treaty Organization allies, Prikhodko said, reiterating the Russian government’s position.

Poppies, Cannabis
“It’s quite possible that when the U.S. and NATO realize over the next two years that their efforts in Afghanistan have little chance of succeeding and start looking for a way out, the Shanghai organization will assume greater responsibility and its member countries will have to decide how to tackle these problems,” said Fyodor Lukyanov, an analyst at the Council on Foreign Defense Policy in Moscow.
Russia has called for NATO troops to stem the flood of drugs out of Afghanistan. On May 6, parliament approved a statement urging the United Nations Security Council to tie the presence of NATO forces in the country to the eradication of poppy and cannabis harvests.
Pakistan and India have observer status in the Shanghai organization. Zardari and Indian Prime Minister Manmohan Singh will “meet, shake hands” at the summit, their first direct contact since November terrorist attacks in Mumbai, “but more than that it is hard to predict,” India’s Foreign Secretary Shivshankar Menon said yesterday.
Iran also has observer status, and Prikhodko said Ahmadinejad was expected to attend and hold talks with Medvedev. Mongolia, the fourth observer country, will be represented by First Deputy Prime Minister Norovyn Altankhuyag.
The Shanghai organization was created in 2001, during the first presidential term of Medvedev’s predecessor, Vladimir Putin, who now serves as prime minister.

TITLE: Museum Launches ‘Grand Tour’ of City’s Finest Artworks
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: St. Petersburg’s State Russian Museum on Friday launched a six-month “Open-Air Museum” event on the streets of St. Petersburg and Moscow.
The art event will see the museum displaying copies of 100 highly-acclaimed Russian paintings on facades on boulevards and squares around the cities.
Among the exhibits will be Ilya Repin’s celebrated “Barge Haulers on the Volga River,” “The Ninth Wave” by popular Russian marine painter Ivan Aivazovsky; “Night at the Crossroads” by Viktor Vasnetsov, and Mikhail Vrubel’s “Six-Winged Seraphim.”
Passers-by will be treated to works by Russian artists including Orest Kiprensky, Vasily Polenov, Ivan Shishkin, Silvester Schedrin, and Kuzma Petrov-Vodkin.
“This large-scale project should awaken people’s interest in classic art by literally stepping out into the street to meet them,” the Russian Museum’s press-service said.
The first painting, a copy of Silvester Schedrin’s “New Rome. Castel Sant’Angelo,” was placed on the building of the Mikhailovsky Theater on Friday.
The copy is of the work’s first variation, the original of which is on display at the Russian Museum. In fact, Schedrin repeated the same subject eight times, altering the lighting. Three further variations on the same theme are in Moscow’s Tretyakov Gallery, and the rest are scattered far and wide, in Minsk, Almaty, Baku and Yerevan.
Schedrin was one of Russia’s most famous landscape painters, an artist who drew inspiration from architectural and natural landscapes alike.
The idea behind the outdoor art tours was drawn from the practice of the “Grand Tour,” an obligatory part of any classical education which was intended to expand a young aristocrat’s outlook. In its contemporary incarnation, the Grand Tour will be downsized into a short journey from the copy of a picture to its original — the project’s organizers hope the street exhibition will attract more city residents to visit the Russian Museum and see the real pictures whose copies they have stumbled upon in the street.
The outdoor exhibition includes an updated version of the erstwhile museum tradition of displaying pictures with notes. The plaque accompanying each work will include a telephone number that, when dialed, will give those interested the opportunity to listen to more detailed information about the picture, the artist, and even the option of downloading the picture onto a mobile phone.
An interactive map of the project can be found at www.arttour.org. The map shows the location of the pictures around Moscow and St. Petersburg and allows those interested to plan the route of their own walking tour.
The plaques will also show the phone number of the Russian Museum’s information service.
The copies of the famed art works were made using the latest technologies in the field of wide-format printing. The wide-screen professional printer is specially designed for high quality print works, and provides an accurate color rendition that is key when printing works of art. The resulting prints are hardy enough to resist different weather conditions and other harmful factors. 
Copies of Russian masterpieces will gradually appear at Ulitsa Bolshaya Morskaya 3 (six copies); Nevsky Prospekt 2 (six works); Nevsky Prospekt numbers 4, 8, 7, 10, 14, 18, 17, 21, 29, 31, 34, 38, 40, 50, 52, 37, 39 — the Anichkov Palace (Youth Creativity Palace); Admiralteisky Prospekt 6 (nine copies);  Ulitsa Kazanskaya 1 and 3; and at numbers 6/2, 4, 9, 7 and 5 on the Griboyedov Canal.
Among the displayed pictures will also be “The Merchant’s Wife at Tea” by Boris Kustodiev, “Moscow Yard” by Vasily Polenov, Ivan Shishkin’s “Oak Trees,” and many others.

TITLE: Mariinsky Launches New Program to Reach Youths
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The world-renowned Mariinsky Theater has launched a grand-scale outreach program with the aim of attracting local students and young people to its two performance venues. Valery Gergiev, the company’s indefatigable artistic director, has devised a program that sees local universities distributing tickets to the Mariinsky at special low prices. Gergiev came up with the idea after working with the London Symphony Orchestra, where he serves as principal conductor.
“London has about ten very strong orchestras who find themselves in fierce competition all the time and they all invest titanic efforts into keeping their audiences and winning more listeners,” Gergiev said. “It is a battle that never stops. It is like a jungle.”
Additionally, the theater has prepared a series of 16 reduced-price season tickets targeting young people, children and families, which cost between 700 and 6700 rubles and include 6-7 concerts and performances. Striving to reach out to younger audiences, Gergiev has also developed season tickets for children (a bargain at 600-900 rubles) and families. Season tickets for students cost between 800 and 1,800 rubles. More than 2,200 Mariinsky musicians, singers and dancers will be involved in the project, which starts in the new season. 
The Mariinsky will thus become the first ballet and opera theater in Russia to run this kind of diversified socially-oriented program.
“Nobody gave me any orders or hints to start something like this,” Gergiev said.”Thinking about the future, we simply must devote our efforts to attracting younger audiences  — the people who may have never even been to see a ballet or an opera before. It is our main ambition to turn these people into dedicated theater-goers who grow to love and appreciate opera, ballet and classical music. We are literally ready to fight for every new spectator.”
“We do not expect immediate results; realistically speaking, we may not see any positive changes until three years from now,” the maestro continued. “I have met with a number of rectors of various St. Petersburg universities, and received full understanding and support for our plan.”
Most of the season ticket performances will take place at the Mariinsky’s brand-new, state-of-the-art concert hall, capable of accommodating up to 1,200 spectators. Gergiev stresses that despite the company’s notoriously hectic international touring schedule, and an ever-increasing number of performances in Russia, St. Petersburg will always remain its absolute priority.
“There is a lot of work to be done in promoting the classics; a good indicator of the prevailing taste was, most recently, the New Year concerts and the May 9 concerts,” Gergiev said.  “Ninety-five percent of the material was very light entertainment. I am convinced that classical music deserves a greater share of representation in nationwide festivities — like it does in most European countries. The Mariinsky, for one, has enough talent to be proud of. Take, for instance, Anna Netrebko [soprano] or Vladimir Galuzin [tenor].”
“The next season will serve as a general rehearsal before the launch of the Mariinsky II, when we start operating from three different venues,” Gergiev said. “We currently lose up to $1 million every time we close our historic stage for a week to mount the sets for some of our most technically complicated shows, like “War and Peace” and “Der Ring Des Nibelungen.” Our hands are tied by the limitations of the old stage, and we very much hope to leave this period behind within the next two years.”
By 2011, with three different stages in its possession, the Mariinsky will be able to develop individual policies for each venue. Mariinsky II looks set to host the boldest experiments, while the original stage will host the company’s traditional core repertoire. The concert hall will be for the performance of chamber and symphonic concerts, solo recitals and opera productions designed specifically for the venue, like Alain Maratat’s already very successful production of “The Magic Flute.” Sung in Russian, and performed more than 60 times since it premiered in December 2007, the show has become an unrivaled favorite among families with children.
The growing economic crisis may also have played a role in the company’s initiative. “Many people are now out of work, and there is much insecurity in the air,” Gergiev said. “It is hard to predict how many people will be willing to spend their money on theater tickets.”

TITLE: In Brief
TEXT: <strong>New Mosque, Institute</strong>
ST. PETERSBURG — A new mosque and Islamic institute are set to open their doors in St. Petersburg’s Primorsky district next month, Interfax reported.
According to Jafar Ponchaev, Mufti of St. Petersburg and North-West Russia, the institute will initially cater for up to thirty students studying four-year courses in the Koran, Arabic, Islamic philosophy, and prayer, as well as various non-religious subjects. Ponchaev told Interfax that the institute hoped to recruit tutors from St. Petersburg State University.
The cost of the construction of the new mosque is being covered exclusively by donations from Russian muslims, the cleric explained.
“We don’t approach Islamic states for funding: I know that if we did, we’d be given the money, but then they would dictate what we should do and how we should do it. We don’t need that. Before the formation of the USSR, our forefathers managed to build 14 thousand mosques without any outside help,” Ponchaev told Interfax.
Next year will also mark the centenary of the city’s Great Mosque, which is attended by over 4000 (mainly young) worshippers every Friday.

<strong>Mass Desertion Denied</strong>
ST. PETERSBURG — Interfax yesterday reported that sources from the Leningrad Region army headquarters have denied reports of a mass desertion of new army recruits.
“Reports broadcast this weekend of a mass desertion of new recruits from a Leningrad Oblast army division do not reflect events. In fact, only two soldiers went AWOL from their divisions. Both were recent recruits who had joined up in May of this year and had not yet taken the army oath,” Col. Yuri Klenov, assistant to the commander of the Leningrad Army Region, told Interfax on Monday.
According to Klenov, one of the pair, Private Sergey Fomichev of Kostroma, returned to his division the following day, and the other, drafted from Moscow, is said to have gone back to the capital with his mother. “He had a criminal record prior to being called up, and from the very beginning complained that he did not want to serve,” explained Col. Klenov, Interfax reported.
Reports of a mass desertion had previously made reference to a claim by the Soldiers’ Mothers Committee that a mass desertion had taken place in one of the Leningrad Army Region’s divisions.

<strong>Iranian ‘Wisdom’</strong>
MOSCOW (SPT) — Mahmoud Ahmadinejad, who was re-elected as Iran’s president in a contested vote Friday, should “show more wisdom and understanding” toward the rest of the world, particularly about his country’s nuclear program, a senior State Duma deputy said.
“We hope that the newly elected president will step away from the policy of unilateral betting on military force and the development of a nuclear program and the world will receive clarity regarding Iran, [that it] is not going to boost its nuclear potential in the future,” said Konstantin Kosachev, chairman of the Duma’s International Relations Committee.
Street protests broke out in Iranian cities over the weekend after election officials gave Ahmadinejad a strong victory in the election. 

<strong>Russia-U.S. on Terror</strong>
MOSCOW (AP) — A Kremlin envoy said Russia was ready to expand cooperation with the United States in combating international terrorism.
Anatoly Safonov, the Kremlin’s envoy on the issue, said late last week that President Barack Obama’s visit to Russia in early July should help boost joint U.S.-Russian efforts to combat terrorism. Safonov also said the war in Iraq served as “Harvard for terrorists,” who now might move to Chechnya and other provinces in the North Caucasus. 
(AP)

<strong>Kadyrov Blames U.S.</strong>
MOSCOW (AP) — Chechen President Ramzan Kadyrov said the United States was to blame for the North Caucasus’ problems. 
“It is precisely from the side of America that work is being carried out aimed at the disintegration of the sovereign Russian state. It is not terrorists, not Islamists,” he said, according to a transcript posted last week on his government’s web site.
The Americans “are creating problems for Russia; they want to pull Russia down. ... They have such a system working -- all sorts of social organizations created to spread rumors and gossip, to agitate people; they know that in the Caucasus, the only way to create problems for Russia is on a religious basis,” Kadyrov said.

<strong>Dates for War Games</strong>
MOSCOW (AP) — The Defense Ministry has announced major war games to be held in the North Caucasus, just over the border from Georgia, between June 29 and July 6.
Defense Ministry spokesman Alexander Drobyshevsky said last week that more than 8,000 personnel, 650 tanks and armored vehicles and hundreds of artillery units would be participating in the exercises.

<strong>Abkhazia Warning</strong>
TBILISI, Georgia (SPT) — Failure to extend the United Nation’s monitoring presence in Georgia’s breakaway Abkhazia region will undermine stability and leave ethnic Georgians there unprotected, the mission head said Friday, Reuters reported.
The mission’s mandate expires Monday, and the UN Security Council is split between the West and Russia over the wording of a resolution to extend it.
UN special representative Johan Verbeke did not discuss the chances of a deal, which diplomats say is on a knife-edge. But he cautioned that without the mission, “you end up having a situation where there is no longer the security regime, where there are no longer the monitors and therefore intrinsically a situation where stability is less secured than it is currently.”

TITLE: Anti-Extremist
Police Raid Activist's Apartment
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: The apartment of a political and human rights activist was searched by the police on farfetched grounds last week, the activist said at a press conference held on Thursday at the office of Soldiers’ Mothers, a group that defends the rights of Russian soldiers and their families. 
Maxim Ivantsov, an activist with the Oborona Youth Democratic Movement and the Youth Human Rights Group, said that on June 8 he was visited by three police officers, two of whom were from the “E” (anti-extremism) Center, who searched his apartment and confiscated his computer, a large number of discs and several old notebooks.
“They even took blank discs — everything en masse,” Ivantsov said by phone on Monday.
“They found a disc of Pavel Bardin’s ‘Russia 88’ [a feature film about a Nazi skinhead group] and said it should be examined to determine whether it is extremist. 
“They were happy when they found an unlicensed copy of Windows on a CDR, and told me I would be persecuted for having this, even though only the distribution of unlicensed products is punishable under the law they referred to; there is no responsibility involved in the possession of such products. None of the discs had anything to do with the grounds on which the search was made.”
According to the search warrant, Ivantsov was suspected of “keeping objects prohibited for civil circulation” (a term usually referring to weapons or drugs), he said. The warrant also alleged there were grounds to believe that he knew the “whereabouts of a person wanted for an insult to the state flag.”
Ivantsov, who has taken part in many events protesting against police lawlessness and authored multiple complaints about rights violated by the police, said the police had used the cases as a pretext to harass an opposition activist and search his home.

TITLE: Chernomyrdin Fired as Envoy to Ukraine
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev has dismissed Russia’s long-serving ambassador to Ukraine, Viktor Chernomyrdin, months before the presidential elections in a country that handles most of the Russian gas transit to the European Union. 
Chernomyrdin’s replacement, who hasn’t been named yet, may pursue a tougher Moscow line in relations with Kiev but display more courtesy and be more public in promoting the Russian policy, observers said. 
Medvedev ordered the dismissal Thursday night, appointing 71-year-old Chernomyrdin as special presidential envoy for economic cooperation with the Commonwealth of Independent States, or CIS, the loose group of former Soviet republics. 
In the same decree, Medvedev canceled the position of a special presidential envoy for developing trade and economic ties with Ukraine, which Chernomyrdin also held. 
Russia’s choice for the new ambassador will probably reflect the frostier relations between the two neighbors after the 2004 Orange Revolution that brought more pro-Western political leaders to power in Kiev, said Vladimir Zharikhin, deputy director of the CIS Institute, a think tank. That person will also have to bring a more diplomatic style to the job, as opposed to Chernomyrdin’s colorful but sometimes offensive language and overall lack of public statements and appearances, Zharikhin said. 
“The style will be less about behind-the-scenes stuff and more about openness … and conformity with traditional diplomacy, including ethical rules,” he said Sunday. “An ambassador must be reserved about his feelings and emotions. Aphorisms are all well and good but not enough.” 
Chernomyrdin said in one of his most recent newspaper interviews, in February, that Ukrainian President Viktor Yushchenko and Prime Minister Yulia Tymoshenko “fight like cats and dogs,” prompting an official reprimand from Kiev. 
Russia could appoint a “tougher diplomat” to represent Moscow’s more aggressive foreign policy, said Grigory Perepelitsa, director of the Foreign Policy Institute at the Ukrainian Foreign Ministry’s Diplomatic Academy. 
“For us, the next ambassador will obviously be more difficult and more of a problem than Chernomyrdin,” he said, Interfax reported. 
Chernomyrdin was willing to seek compromises, he said. 
The new ambassador will likely have the task of making clear Russia’s preferences for the next Ukrainian president. The parliament will soon call a presidential election for some time at the end of this year or the start of next year. 
The chairman of the Ukrainian parliament’s international relations committee, Oleh Bilorus, named Russian Deputy Foreign Minister Grigory Karasin as a possible candidate for the posting. 
Interfax, however, cited “well-informed” Russian sources as saying Karasin was not in the running. They declined to give any names. 
Chernomyrdin is a former head of the Soviet gas monopoly that later became Gazprom and a longtime prime minister under former President Boris Yeltsin. 
Despite his history with Gazprom, Chernomyrdin’s role in the recent gas disputes with Ukraine that left European countries without heat during the winter months was limited, at least publicly. 
His stint as ambassador passed the eight-year mark on May 30. 
The dismissal came after vigorous denials in December that he was on his way out. 
Reacting to speculation about Chernomyrdin’s departure, Karasin called it “media brouhaha” and “blatantly offensive.” 
Chernomyrdin bid farewell at a Kiev reception on Thursday dedicated to the Russia Day holiday. 
“My presence here is drawing to an end, but I don’t regret the years that I spent in Ukraine,” he told the guests. “Thank you for everything.”

TITLE: Belgian Envoy Dismissed For Helping Kerimov
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Belgium has dismissed its ambassador to Russia after he helped billionaire Suleiman Kerimov get visas for Thai dancers to attend a party in France.
Ambassador Bertrand de Crombrugghe breached procedural regulations when he lobbied personally at his embassy’s consular section for visas for five Thai women wishing to travel with Kerimov to France, Foreign Minister Karel De Gucht told the Belgian parliament, Agence-France Press reported. 
De Crombrugghe was therefore recalled from his post in Moscow, he said. 
A Belgian Foreign Ministry spokesman confirmed the report but declined to comment further.
De Crombrugghe also flew in a private jet owned by Kerimov to the French Rivera, where he attended a party thrown by the Kremlin-friendly billionaire, De Gucht told a parliamentary hearing Thursday in Brussels.

TITLE: Putin Advises Famous Artist On Painting
AUTHOR: By Ira Iosebashvili
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Prime Minister Vladimir Putin has tried his hand as an art critic, suggesting improvements to a painting that a respected Russian artist completed 36 years ago.
Putin’s attention was drawn to a sword in “Prince Oleg with Igor,” a large painting depicting medieval Russian heroes, when he visited the studio of painter Ilya Glazunov for his 79th birthday last week.
“The sword in his hand is a bit short,” Putin told the artist, who had completed the painting in 1973. “It looks like a pocket knife in his hands.”
Such a weapon “would only be good for slicing sausage,” he added.
Glazunov, whose paintings often glorify Russian culture and who opened a state-run gallery dedicated solely to his works in 2004, told Putin that he had an excellent eye for detail and promised to change the painting.
“I don’t miss a single detail,” Putin agreed.
Putin also questioned why, in a separate painting titled “Eternal Russia,” Glazunov had portrayed Josef Stalin together with his political nemesis Leon Trotsky. 
Glazunov replied that Trotsky had an important role in Russian history as well.
Putin has also played the role of theater critic. In March, after attending a performance of the Alexander Griboyedov play “Woe From Wit,” he complained that the main character cried too much and appeared weak.

TITLE: Awards, Arrests and a Russia Day Blockade
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev presented state awards to people who reached new frontiers in outer space and cyberspace as the country celebrated the Russia Day holiday with a long weekend.
Medvedev handed out awards to 12 people during a ceremony Friday in the Kremlin’s Georgiyevsky Hall, including the first woman in space, Valentina Tereshkova, and Yevgeny Kaspersky, the founder of the eponymous anti-virus software.
Tereshkova, who became the first woman in space in 1963, dedicated her award to Russia’s space program, while Kaspersky called for improvements to the national education system in order to churn out more talented engineers.
“It is possible that this will require 10 to 15 years of hard work, but there is no other way for Russian companies to be competitive in Western and Eastern markets,” Kaspersky said, RIA-Novosti reported.
Medvedev also gave awards to three creators of the “Smeshariki” children’s animated series at the ceremony.
Russia Day marks the date in 1990 that the Congress of the People’s Deputies of the Soviet Russian Republic adopted a declaration of independence from the Soviet Union.
For most people, the holiday is little more than an extra day off work, but for several hundred workers in the North Caucasus it was a chance to block a road to protest small salaries. The workers for a regional provider of resort services, Elbrusturist, blocked a road in Kabardino-Balkaria for the whole day, demanding higher salaries and a majority ownership of the company, RIA-Novosti reported. 
Elsewhere, the Russia Day holiday passed relatively quietly, with about 2,300 people taking part in a pro-Kremlin rally in the Far East city of Khabarovsk, according to the official web site of local authorities, Khabarkrai.ru. Smaller pro-Kremlin rallies took place in other cities.
More than 3 million people participated in Russia Day festivities nationwide, RIA-Novosti reported Saturday, citing an Interior Ministry spokeswoman. In Moscow, 200,000 people took to the streets for the festivities, including 25,000 who watched a concert on Red Square and 25,000 who visited the war memorial at Poklonnaya Gora.
First called Independence Day in 1991, the June 12 holiday was renamed the Day of the Declaration of the Sovereignty of the Russian Federation by then-President Boris Yeltsin in 1994. In 2002, then-President Vladimir Putin gave the holiday its current name, Russia Day.

TITLE: President Medvedev Claims Democracy is Growing in Russia
PUBLISHER: The Associated Press
TEXT: MOSCOW — President Dmitry Medvedev said Russia is taking steps toward greater democracy, defending electoral reforms that Kremlin critics say are just window dressing on the tightly controlled political system that Vladimir Putin put in place as president. 
Medvedev met with leaders of three minor political parties — Yabloko, Patriots of Russia and Right Cause — and offered them hope that they will someday win seats in the State Duma, which is dominated by Putin’s United Russia party. 
Medvedev has spoken out in favor of pluralism and lowered some of the barriers that Putin threw up to keep opponents out of the Duma and other power structures during his eight-year presidency. 
He suggested at the meeting that the changes he has initiated — including a law that will give one or two seats to parties winning 5 percent to 7 percent of the vote in Duma elections instead of shutting them out entirely — marked slow but sure democratic progress. 
“I believe these decisions are aimed to create a modern, more democratic political system,” Medvedev said in televised remarks during the meeting Thursday at his residence outside Moscow. 
“Of course, the formation of the political system is proceeding constantly,” he added, apparently eager to avoid the impression that he was criticizing Putin. Many people believe that Putin still holds the country’s reins. 
Medvedev met with leaders of Yabloko, a liberal party that has been out of the Duma since 2003; the little-known nationalist party Patriots of Russia; and Right Cause, a party created last year with Kremlin support. 
Medvedev used the meeting to strike an inclusive tone in comments shown on state television. He pointed out that the parties have tens of thousands of members and said it was “quite likely” that they will “sooner or later” win seats in the Duma. 
But despite Medvedev’s talk of democracy, critics say the Kremlin has continued to maintain its tight grip over politics, using its clout to keep opponents off television screens and out of public office. 
The political reforms that Medvedev has initiated “absolutely do not change, not an iota, the political construction that Putin has handed over to Medvedev — if he has actually handed it over,” said Nikolai Petrov, an analyst with the Carnegie Moscow Center. 
“These are small, decorative changes whose purpose is to demonstrate that something is changing, something is improving, something is democratizing, but they in no way change the whole political design,” Petrov said.

TITLE: G8 Makes Plans for Unraveling Anti-Crisis Measures
AUTHOR: By Simon Kennedy and Rainer Buergin
PUBLISHER: Bloomberg
TEXT: Group of Eight finance ministers began drawing up contingency plans for rolling back budget deficits and bank bailouts as the economy shows signs of recovery and investors start worrying about inflation.
Officials meeting in Lecce, Italy, over the weekend said it’s prudent to consider what exit strategies to deploy once global growth is secured and asked the International Monetary Fund to examine how to do so without reigniting the two-year crisis. At the same time, they said it’s premature to rein back more than $2 trillion in stimulus packages.
“Growth should remain the principal focus of policy,” U.S. Treasury Secretary Timothy Geithner said after the meeting ended on June 13. “It is too early to shift toward policy restraint.”
Policy makers trod a fine line in the knowledge that withdrawing stimulus measures too soon could choke the recovery before it starts, and allowing them to last too long might push up borrowing costs. They are also trying to reassure markets after the yield on the 10-year U.S. Treasury note rose last week to the highest since October.
“Markets aren’t looking for specific exit strategies now, but want governments to start thinking about them,” said Bill Witherell, chief global economist at Cumberland Advisors Inc. in Vineland, New Jersey, which oversees $1 billion in assets. “They worry that inflation is going to build up if nothing is done to withdraw the stimulus.”
The G-8’s statement made no reference to currencies or interest rates given the absence of central bankers from the meeting.
Treasuries rose for a third day and the dollar gained the most in a week against the euro on Monday after Russian Finance Minister Alexei Kudrin told Bloomberg Television he has full confidence in the U.S. currency. Russia’s central bank drove U.S. bonds and the dollar lower on June 10 by saying it may shift some reserves from Treasuries, pushing the yield on the 10-year security above 4 percent.
“It’s too early to speak of an alternative” to the dollar, Kudrin said in Lecce. IMF Managing Director Dominique Strauss-Kahn said he didn’t see a “weak dollar.”
German Finance Minister Peer Steinbrueck also said he wasn’t concerned by the euro’s 10 percent climb against the dollar in the past four months.
The G-8 ministers delivered their most upbeat outlook since the collapse of Lehman Brothers Holdings Inc. in September amid mounting evidence that the deepest global recession in six decades is moderating.
Economists expect reports on U.S. housing and German investor sentiment to back that case in coming days. 
Home Depot Inc., the world’s largest home-improvement chain, said June 10 that fiscal 2009 profit may decline less than it had projected. Virgin America Inc., an airline partly owned by billionaire Richard Branson, said June 12 its first-quarter net loss narrowed as it filled more seats on planes.
Still, data last week showed the situation is fragile. European industrial production dropped by a record in April and Volkswagen AG, Europe’s largest automaker, said June 12 that “very weak” global car markets aren’t yet recovering. 
There are “signs of stabilization,” though “the situation remains uncertain” as climbing unemployment and volatile commodity prices present obstacles, the ministers said in their statement.
Geithner and U.K. Chancellor of the Exchequer Alistair Darling were among the most vocal in warning officials not to move too soon. Steinbrueck sought a “credible exit strategy” to avoid inflation.
“We’re not there yet,” Darling told reporters. “No one is talking about exiting yet.”
The officials argued over whether Europe is endangering the rebound by refusing to follow the U.S. and subject its banks to individual and public stress tests. 
The G-8 is composed of the U.S., Japan, Germany, France, U.K., Canada, Italy and Russia. Its ministers met to shape an agenda for their leaders’ meeting on July 8-10 in L’Aquila, the Italian town destroyed by an earthquake in April.

TITLE: Suzuki Plant On Hold
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: Japanese automobile concern Suzuki Motor Corp. has postponed the construction of its automobile plant near St. Petersburg.
“We have postponed the project,” Shoji Shigeru, general director of Suzuki Auto Rus, said last week, Interfax reported.
Shigeru, however, did not comment on why the company had made such a decision and when it was planning to begin work again.
St. Petersburg Governor Valentina Matviyenko confirmed that the project had been frozen, RIA Novosti reported.
Matviyenko said however that it was too early to speak about the complete end of the project.
“Suzuki wanted to and do want to build the plant. The crisis will end, and the investors will come back to the project,” Matviyenko said.
Maxim Sokolov, head of the city’s investment and strategic projects committee, said the city was not going to completely stop its cooperation with Suzuki.
“We haven’t received any notice that the agreement with Suzuki has been canceled,” said Sokolov, Fontanka reported. “Therefore we remain strategic partners. When the situation on the market changes we’ll return to our negotiations.”
Sokolov said that City Hall regarded the situation with understanding.
“In today’s economic situation, many investors have to cut their investment; some of them have even gone bankrupt,” he said.
At the same time, the location allocated by the St. Petersburg authorities for the Suzuki plant could be given to other investors.
“If the territory in Shushary is not required by Suzuki, it can be passed on to another interested company,” Sokolov said.
Sokolov said City Hall had its last meeting with Suzuki’s representatives at the end of May. At that time, Suzuki was having difficulties with the site allocated for the construction of the plant in the industrial zone of Shushary due to the presence of large peat bogs. The administration held active negotiations to solve the problems, and possibly to change the plant’s layout, Interfax said.
“We prepared our offers and sent them to Suzuki. We haven’t received any information that Suzuki would not consider such offers,” Sokolov said.
Suzuki began having problems in the middle of last year. In summer 2008, the city administration signed a new budget for the construction of the plant, increasing the volume of investment by 1.2 billion rubles ($39 million) to 4.2 billion rubles ($136 million).
The additional investment was required in order to deal with two billion cubic meters of peat that was unexpectedly found at the site. Experts began to speculate that Suzuki might reject the more expensive project.
Experts now believe that Suzuki’s main difficulties were not the higher costs involved, but a decrease in the carmaker’s sales. The European Business Association said this year that Suzuki’s sales dropped lower than average market sales, decreasing 61 percent in the first quarter of the year and 71 percent in April, compared to an average drop of 44 percent, Fontanka reported.
Suzuki Motor Corp. had planned to launch the plant in the middle of 2010 to produce its Grand Vitara and SX4 models. In 2011, production of new versions of these models had been scheduled to begin.
The projected capacity of the plant was initially 30,000 cars a year.

TITLE: Russia Still Has Place In BRIC
AUTHOR: By Courtney Weaver
PUBLISHER: The St. Petersburg Times
TEXT: Trailing behind its emerging market peers in terms of capital inflows and facing a sharp economic contraction at a time when China and India are continuing to see growth, Russia is having a hard time making the case that fundamentals are driving its market rally and that it has the financial architecture to sustain these gains much longer. 
Brazil, Russia, India and China — collectively known as BRIC, an acronym coined by Goldman Sachs chief economist Jim O’Neill in 2001 — will hold their first summit Tuesday in Yekaterinburg and are heralding their purchase of International Monetary Fund bonds as a signal that the countries are financial forces to be reckoned with. 
But while China and India’s economies both experienced growth of about 6 percent in the first quarter and Brazil saw its gross domestic product shrink 1.7 percent in the same period, Russia seems to be in a league of its own, with its economy shrinking 9.8 percent. 
Similarly, Russia’s equity markets are significantly lagging behind the rest of the group. The MICEX Index dropped more than 70 percent from its pre-crisis high in May 2008 to its low in October. Meanwhile, stock markets in Brazil, India and China experienced milder losses, losing between 40 and 50 percent before starting on a slow but steady recovery. 
The disparity between Russia and Brazil has prompted some to question Russia’s placement in the group and has led to speculation that BRIC may soon turn into BIC. 
The underdevelopment of Russia’s domestic financial system remains the country’s Achilles heel, said Christopher Granville, manager director of Trusted Sources, an emerging markets resource service in London. “They really failed to develop the country’s financial sector successfully, and they’re paying for it,” he added. 
By contrast, Brazil, having largely shaken off its astronomical budget deficits and sky-high inflation rates, now has a properly developed financial sector and very grown-up monetary regime, Granville said. 
Nevertheless, so long as China and India continue to be locomotives of growth, it may be too early to talk about Russia’s exit. 
“Both Brazil and Russia happen to be long of a lot of things China and India both need, so this is quite a natural grouping,” O’Neil wrote in a recent note. “Linked to this, trade between the BRIC countries has grown even faster than the explosion of world trade this decade.” 
In addition, all four countries are in a position to use their giant forex reserves to gain clout in the international financial arena. Brazil’s Finance Minister Guido Mantega said last week that Brazil and Russia would each lend the IMF $10 billion and that China would offer the fund $50 billion as part of a united effort to help fight the crisis globally. 
The fact that these three countries are in the position to make such a generous offer shows just how far they have come in the past decade, said Nigel Rendell, an emerging markets strategist at RBC Capital in London. “Five or 10 years ago, the IMF was lending money to most of these countries. Now, it’s the other way around,” he said. “The BRICs are seen as trying to save the world from economic problems.” 
But there is at least one good reason why that goal may still be within Russia’s reach: “Russia follows oil, and it is going up,” O’Neill said in the note.

TITLE: Primorye Paves Way For State Control of Miner
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: The Primorye region on Sunday brokered the handover of miner Russian Tungsten to new owners following a year of protests over wage arrears at the company and a Kremlin warning that Far East political leaders should resolve the dispute. 
The company will cede control of production sites and allow an as-yet undetermined state firm to operate them for five years, according to an agreement signed by Governor Sergei Darkin, a representative of Russian Tungsten, and a representative of the workers. Miners will start work again on July 1, following an eight-month stoppage. 
The government has made fighting unpaid wages a priority after residents of the Leningrad region town Pikalyovo blocked a federal road earlier this month to protest unpaid salaries. Prime Minister Vladimir Putin visited several days later to berate the owners of the town’s three factories, including billionaire Oleg Deripaska, and lawmakers are considering a bill to nationalize the plants. 
With about 240 workers, Russian Tungsten is the largest employer in the town of Svetlogorye. Most of the plant’s workers had not been paid since this winter, and earlier this month they received letters about their forthcoming dismissal. 
Following in the footsteps of the Pikalyovo residents, Russian Tungsten employees sent a letter to Putin last week. “Do we need to block a federal highway to receive our salaries? We won’t survive another hungry winter,” the letter said, according to Interfax. 
And while Pikalyovo residents could turn their ire toward their high-profile employers, the situation around Russian Tungsten has been less clear. 
Previous manager Alexander Martynov sold the miner to Seychelles-registered Granit Capital Management, regional newspapers reported last week. An unidentified representative for the owner of Russian Tungsten signed the agreement Sunday. 
Medvedev mentioned Russian Tungsten in a video conference with his federal envoys on Wednesday, saying he was concerned by what he had read online about the factory. He ordered his envoy to the Far East, Viktor Ishayev, to “see these issues to their resolution.” 
The following day, the regional administration said the workers were paid the 6.3 million ruble ($203,400) debt by an unidentified commercial bank, which issued the sum on Darkin’s guarantee. 
The regional branch of ruling party United Russia will oversee efforts to restart mining operations together with the trade union, Sunday’s statement said. 
Darkin also promised to open three timber processing sites in Svetlogorye, employ locals for road reconstruction and lower their electricity prices. 
Social tensions in the town boiled over last June, when dozens of Russian Tungsten workers went on a hunger strike over unpaid wages. In April, most of Svetlogorye’s 1,600 residents turned out for protests over the situation, telling the media that they only survived last winter by eating potato peels.

TITLE: Assistance With Opel Welcome
PUBLISHER: Bloomberg
TEXT: LECCE, Italy — German Finance Minister Peer Steinbrueck said Canadian and Russian officials support German assistance for Magna International’s planned takeover of General Motors’s Opel unit.
Steinbrueck, his Canadian counterpart Jim Flaherty and Russia’s Alexei Kudrin attended a two-day meeting of finance ministers from the Group of Eight countries in Lecce, Italy.
 “I’ve spoken to Kudrin about it and also with Jim Flaherty,” Steinbrueck said Saturday, referring to talks held Friday. “Both made it clear that they welcome the model of this solution and want to be helpful within their means.”
Germany has said it favors a joint bid from Magna, Canada’s biggest car-parts maker, and partner Sberbank, Russia’s biggest lender, for Opel. GM is selling Opel as it reorganizes its business under protection from creditors. Germany is involved in the transaction because it’s financing Opel’s sale.
Under the proposal, Sberbank would get 35 percent of Opel, matching the stake GM would retain, while Magna would receive 20 percent. Employees of Opel and Vauxhall would take a 10 percent holding in exchange for agreeing to cost cuts.

TITLE: In Brief
TEXT: <strong>Hotel Group Eyes City</strong>
ST. PETERSBURG (SPT) — The international luxury hotel group Hotels&Preference said at a presentation held in the city at the end of last month that it would focus on St. Petersburg.
“St. Petersburg will become one of the group’s main partners in the near future,” said Nicolas Dubois, the group’s commercial director.
Representatives from the hotel group met with local tourism industry professionals including representatives from tour operators, the city’s leading hotels and local media.
H&P comprises small luxury hotels in nine countries including Russia, Finland, Sweden, England and the U.S.

<strong>Export Duty May Rise</strong>
MOSCOW (Bloomberg) — Russia’s government may raise the export duty on crude oil by 39 percent on July 1, the Finance Ministry said.
The duty will probably rise to $212.60 a metric ton ($29 a barrel) from $152.80, Alexander Sakovich, deputy head of the ministry’s customs payment department, said in an interview Monday.
Russia sets the export duty by using the average price of Russia’s Urals exports from the 15th day of each month to the 14th day of the next. Urals averaged $63.66 a barrel from May 15 to June 14, Sakovich said. The state sets the tax officially at the end of the month.

<strong>VEB to Get Chinese Aid</strong>
MOSCOW (Bloomberg) — China Development Bank Corp. will lend $1.3 billion to Vnesheconombank, Russia’s state development bank, to finance investment projects in Russia.
China Development Bank agreed to lend $1 billion for projects by Chinese companies in Russia, Moscow-based Vnesheconombank said in an e-mailed statement Monday.
The two banks signed another contract on a $310 million loan to fund a cement plant in the St. Petersburg region, according to a separate statement. The plant will produce more than 1.8 million tons of cement a year and will create 450 jobs.

<strong>Lebedev Seeks Paper</strong>
LONDON (Bloomberg) — Russian oligarch Alexander Lebedev, who bought London’s Evening Standard newspaper this year, is in final talks to acquire The Independent, according to a MediaWeek report, citing sources.
Executives at the Independent’s owner, Independent News & Media Plc, have held talks with Lebedev over a possible sale of the U.K. national newspaper, among other options, according to the trade journal. A nominal offer for The Independent and Independent on Sunday newspapers was tabled and a deal may come by the end of the month, MediaWeek said.
Lebedev and Independent News & Media have held talks since last month, when the Independent newspapers moved into the London building that houses the Evening Standard’s publisher, Associated Newspapers, MediaWeek reported.

<strong>Politicians to Join Mill?</strong>
MOSCOW (Bloomberg) — Two deputy prime ministers may join the board of Baikalsk Paper and Pulp Mills, controlled by billionaire Oleg Deripaska, after the Russian government sought a greater role in the running of the facility.
Igor Shuvalov, a first deputy prime minister, and Igor Sechin, a deputy prime minister, may join the board together with Deripaska, Continental Management, part of Deripaska’s Basic Element holding company, said Thursday.

TITLE: GDP Down 9.8% As Production Plunges
AUTHOR: By Paul Abelsky
PUBLISHER: Bloomberg
TEXT: Russia’s economy contracted the most in 15 years in the first quarter after industrial production plunged and the government’s 3 trillion rubles ($97 billion) in stimulus spending failed to boost companies and banks.
Gross domestic product tumbled an annual 9.8 percent, compared with growth of 1.2 percent in the previous quarter, the State Statistics Service said Sunday. The preliminary estimate on May 15 was a 9.5 percent contraction.
“The government may be forced to devalue the ruble further to bolster exporters and spend its stimulus package more aggressively,” said Danila Levchenko, chief economist at Otkritie. “The results are worse than any forecasts as the economy is being derailed by a slump in manufacturing and property development.”
Russia is falling into its first recession in a decade after the global slowdown sapped demand for its commodities and companies struggled to find funds. The government’s stimulus package has failed to spur bank lending, even as the Central Bank cut its main interest rates three times since April.
“Aggressive cuts in official interest rates over the past six months have not fed through to lower borrowing costs,” Neil Shearing, an analyst at Capital Economics, wrote in a report last week. “A sustained recovery is unlikely much before the second half of next year.”
GDP may slump as much as 8 percent in 2009, Economic Development Minister Elvira Nabiullina said last month, after growth of 5.6 percent in 2008 and 8.1 percent the year before.
President Dmitry Medvedev said June 6 that the economy will rebound “more quickly than had perhaps been expected.”
The economy contracted in May at the slowest pace since October, shrinking 6.8 percent from a year earlier, as slumps in manufacturing and service industries eased after record declines in April, according to VTB Capital.
The deficit, Russia’s first in a decade, may reach 10 percent of GDP this year amid falling oil prices, according to the Finance Ministry. 
Urals crude, Russia’s chief export blend, has averaged $49.43 a barrel this year. The country’s revised 2009 budget is based on an average price of $41.
The recovery in oil prices is unlikely to bolster Russia’s economic performance, Rory MacFarquhar, an economist at Goldman Sachs, said in a report last week.
“We have long argued that oil prices do not have a direct impact on activity since they are almost entirely taxed away by the state,” he wrote. “In the past, high oil prices were accompanied by strong credit inflows, which do have a stimulative impact. 
“But we do not expect a rebound in credit under current circumstances given the damage already suffered by both domestic and foreign lenders.”

TITLE: Local Bank Plans Sale Of Shares
PUBLISHER: Bloomberg
TEXT: Bank St. Petersburg, the biggest private lender in northwestern Russia, may sell between $50 million and $100 million of preferred shares to boost capital as it faces an increase of non-performing loans.
The board the St. Petersburg-based lender will make a decision on the issue in September, Deputy Chairman Konstantin Balandin told investors on a conference call Thursday. Overdue debt at the bank rose to 4.3 percent of total loans from 0.7 percent on Jan. 1, the lender said Thursday in an e-mailed statement. Assets rose 1.6 percent since Jan. 1 to 219.2 billion rubles and first-quarter net interest income climbed 42 percent to 2.3 billion rubles from a year earlier.
Bank St. Petersburg may also request a second subordinated loan from the state-run bailout bank Vnesheconombank, which already approved a subordinated loan of 1.5 billion rubles ($47 million) in May, Balandin said.
The bank said its first-quarter profit plunged 62 percent after it increased bad-loan provisions and the share of delinquent debt rose almost sixfold.
Net income fell to 240.4 million rubles ($7.8 million), the St. Petersburg, Russia-based lender said in an e-mailed statement Thursday, without providing year-earlier figures.
“We have focused our efforts on cost cutting and asset quality,” Chairman Alexander Savelyev said in the statement. “Accordingly, we have increased the provision rate for loan impairment which quite naturally affected our first-quarter financial results.”

TITLE: Change Blowing in From the 2nd World
AUTHOR: By Peter Rutland
TEXT: On Tuesday, the leaders of Brazil, Russia, India and China will be meeting in Yekaterinburg for the first summit of the BRIC powers. It remains unclear what the BRIC leaders have in common, and what — if anything — they expect to achieve in Yekaterinburg. But there is no doubt that the international system is in a critical condition, while political elites around the world are facing severe domestic challenges. Maybe, just maybe, the BRIC initiative will produce a new approach. 
Since 2006, the BRIC foreign ministers have met three times on the edges of other international gatherings. They held their first formal meeting in Yekaterinburg in May 2008. This week will be the first summit of BRIC national leaders: Indian Prime Minister Manmohan Singh and Presidents Hu Jintao of China, Luiz Inacio Lula da Silva of Brazil and Dmitry Medevedev. The BRIC summit will follow a meeting of the Shanghai Cooperation Organization, a group led by China and Russia that promotes security coordination in Central Asia.
Back in 2001, Goldman Sachs analyst Jim O’Neill coined the BRIC acronym to identify the four largest emerging market economies. The original goal was simply to interest Western companies in selling and investing in these growing consumer markets. The idea struck a broader chord, signaling that globalization was in the process of producing tectonic shifts in the world economy. 
The 2008 financial crisis threw a harsh light on the gap between the growing interdependency of national economies and the inadequacy of international institutions to deal with global problems ranging from climate change to the volatility of the financial system. The United States proved unable or willing to lead international efforts to tackle these challenges. (Even if enlightened U.S. leadership had been forthcoming, the other states would have mistrusted U.S. goals and faced a strong incentive to either free ride or actively subvert U.S. initiatives.) Likewise, the European Union has not matured as an institution capable of filling the leadership gap. With the rejection of the constitution in 2005 and subsequent stalling of the Lisbon Treaty, its potential has been set back for several more years. 
So, attention has shifted to what Parag Khanna has termed the “second world” of middle-sized powers. Maybe the larger members of the G20 — Brazil, Russia, India and China — can step up to the plate and provide the international leadership that is lacking from the United States, the EU and Japan. The BRIC countries account for close to half the world’s population and one-fifth of the global economy.
The BRIC leaders see the group not only as a framework to promote economic growth but also potentially as a vehicle to assert their own political goals in a world that has been increasingly dominated by the United States.
One problem, of course, is the striking asymmetries between the group’s members. It includes two vibrant democracies and two authoritarian regimes; two resource-rich and two resource-poor economies. On any particular policy issue, the national interests are likely to pull in very different directions. What they have in common is that they have been excluded from the decision-making institutions that have shaped the global economic system. 
Their first point of agreement seems to be to push for a greater role in the International Monetary Fund combined with a concerted effort to reduce the role of the dollar as the global reserve currency. This is fine as far as it goes, but the IMF’s role in the latest financial crash was little more than a bystander, since private capital flows dwarf the funds at their disposal. The BRIC nations have not yet shown any great enthusiasm — nor specific proposals — for stepping up the regulation of international financial transactions. 
Climate change looks a bit more promising, with talk of coordinating their positions in the run-up to the Copenhagen talks in December of this year. But this is likely to be coordination of a position that merely calls on the developed economies to dig deeper into their pockets — coordination that will delay rather than facilitate a solution to this urgent problem. Russia is also pushing for a common position on energy policy that favors long-term contracts to try to rein in speculation and bring stability to oil prices. 
These proposals, or more exactly, ideas about possible proposals, do not amount to much. But economic forces seem to be moving in the BRIC’s direction. China and India continue to post strong growth, while the developed economies languish, and their appetite will revive commodity markets, pulling up Brazil and Russia. Sooner or later, one can expect these countries to make a concerted effort to craft international institutions that are more suited to their interests. Change can come from unexpected directions. The Hague Convention on international peace was convened by the Dutch and Russian governments in 1899, but it did set in motion half a century of efforts that eventually led to the United Nations and the Geneva Conventions. Despite its inauspicious beginnings, the BRIC initiative may prove to be an important step in the direction of broadening the base of international decision making.

Peter Rutland is a professor of government at Wesleyan University in Middletown Connecticut and an associate of the Davis Center for Russian and Eurasian Studies at Harvard University.

TITLE: The Echoes of Cairo
AUTHOR: By Richard Lourie
TEXT: Slim as an iPhone and just as adept at communication, U.S. President Barack Obama gave a speech in Cairo that has changed the game. His words were blunt but even-handed. Insincere rhetoric always rings hollow, but truth has its own timbre. People can feel it and they respond to it. 
Afterward, the predictable grumbling was that words are one thing, deeds another. But simply traveling to Cairo was a bold act when he could have just as easily sent a video or invited Egyptian President Hosni Mubarak to the White House. 
There were immediate practical repercussions in the June 7 Lebanese parliamentary elections, where, surprisingly, the pro-U.S. coalition defeated the one led by Hezbollah. His words were also closely heeded by the young Iranian voters who turned out in droves on 
June 12. 
Not all the response has been positive. Osama bin Laden tried to upstage Obama by releasing an audio cassette a few days before the Cairo speech. Some Turkish nationalists, for example, were skeptical, comparing Obama to Napoleon, whom they say also respected Islam but still sought to conquer and dominate it. Obama’s speech may have two distinctly different consequences — it may cause the Muslim majority to shift away from passive, tacit support of radical Islam and for that very reason may motivate the extremists to take even more drastic, polarizing acts.
In this shift of atmosphere and direction, there are dangers and opportunities for Russia. Unlike the United States, which has a less than 1 percent Muslim population, Russia has at least 10 percent, or some 14 million. That community is at the moment hardly serene. Though the campaign against the Chechen separatists has now been officially declared won, as recently as late May, thousands of Chechen policeman accompanied by federal troops were still tracking the “illegal armed formations” in the Assa river valley near Ingushetia, where much of the action has moved. Last Wednesday, an anti-Islamist senior judge there was assassinated across from the kindergarten where she had just dropped off her children. On June 5, Dagestan’s interior minister, a man with many and varied enemies, was assassinated by a sniper at a wedding. 
Street-level Islamophobia continues to run high, with skinhead attacks on Central Asian gastarbeiters hardly ameliorated by the economic crisis. Under pressure from the Russian Orthodox Church and nationalists, the construction of mosques continues to be highly restricted in big cities like Moscow and St. Petersburg, which have burgeoning Muslim populations. This, of course, alienates Muslim moderates, as does the fact that their political representation remains disproportionately low.
The Kremlin’s attempts to re-exert influence on many Central Asian nations that were once part of the Soviet Union have caused them to bypass Russia in favor of the U.S., EU and China. Russia seems to be in the process of alienating both its own Islamic population and its Islamic neighbors.
President Dmitry Medvedev had a perfect opportunity to make a major address to his Muslim constituency in the aftermath of the assassination of Dagestan’s interior minister. Instead of establishing a new level of communication, he fell back into the tired rhetoric of blaming murky unnamed foreign forces. The Russian leadership has yet to realize that it is not enough just to control the means of communication. The Muslim world has shown itself to be avid for a voice that speaks to it and of it. And that includes Russia’s Muslim community. The echoes of Cairo will yet reverberate in Grozny and Kazan. 

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

TITLE: Diverse Russian Art On Show at Venice Biennale
AUTHOR: By Max Seddon
PUBLISHER: The St. Petersburg Times
TEXT: VENICE, Italy — The Venice Biennale, which marked its 53rd installment this year, is something of an artworld cross between the Grammys, the Cannes Film Festival and the Davos economic summit. Every other first week in June, the city is transformed from a tourist trap into the stage on which careers are made and the state of contemporary art worldwide is judged until the next time around. 
Oddly enough, however, this year’s Russian pavilion owed just as much to events nearly a century old as it did to the present day. It takes its title, “Victory Over the Future,” from the 1913 opera “Victory Over the Sun” — a Russian avant-garde landmark with libretto in Alexei Kruchenykh’s “trans-rational” language and set design marking Kazimir Malevich’s first forays into black squares and Suprematism. 
But the real enemy for commissioner Vasili Tsereteli and curator Olga Sviblova was the past. The pavilion in Venice — built a year later by Alexei Shchusev, best known as the architect of Lenin’s tomb — has been in a notorious state of disrepair for many years, with a leaky roof that until relatively recently provided shelter for homeless people and severely restricts what can be displayed under it. 
“My first thought was to do a museum-style retrospective of someone like [legendary nonconformists] Erik Bulatov, Boris Orlov,” said Sviblova. “But with the state the pavilion’s in, you just can’t show works of that quality.” 
Sviblova opted to continue the Russian tradition of going against the general grain and staging a group exhibition of seven artists instead of giving the space over to just one or two. 
A group of Russian art critics were flown over for the opening. “Russian art — whatever fantastic dreams we might have about it — is simply off the radar,” Sviblova explained. “So I think the point of the national pavilion is for us to show that we have diverse artists. It’s always been my strong conviction and belief that the number of square meters within which the artist makes his statement has nothing to do with the strength of that statement.” 
This diversity was reflected in Katya Bochavar’s design, overhauling the pavilion into small rooms and narrow corridors allowing the artists to show independently of each other. Visitors to its top floor were greeted by Anatoly Zhuravlev’s installation of hanging balls, in effect silver Christmas tree ornaments with tiny photographs of 20th-century historical figures stuck onto them. Past that, one could go left to see a “fountain” made out of cheap plastics and what appeared to be an air conditioner by Irina Korina; right to see Andrei Molotkin’s small replicas of the Winged Victory of Samothrace, one with blood pumped through it, the other with oil; or down the middle to see a fresco of a Chechen soccer crowd in ultraviolet paint from Alexei Kallima. 
Russia is, as the old slogan goes, a multiethnic country, but it was unclear how great the Chechen hand in the pavilion was. At the opening, Molotkin’s installation had “Chechen crude oil” and “Blood from survivors of the Chechen war” inscribed over the statues. Rumor was that it was done without Sviblova’s knowledge or approval, and on a repeat visit the walls had been scrubbed clean of them. 
Downstairs was a world several centuries, away from all this. “Psychedelic realist” Pavel Pepperstein presented hallucinatory watercolors of “landscapes of the future,” stretching from a Suprematist Sri Lankan autobahn in 2115 to “artificial clouds” of 3451. Next door, Gosha Ostretsov built a claustrophobic wooden room with moving mechanical hands, a life-size replica of himself scribbling out new ideas and a ringing telephone that screamed untranslatable obscenities when you picked it up. 
Finally, one of the pavilion’s sides hosted a Styrofoam sculpture of a motorcyclist from Sergei Shekhovtsov, bursting as if right out of the wall. Shekhovtsov was perhaps a victim of Sviblova’s square meter belief. His work was originally meant to hang from the pavilion’s facade but for technical reasons had to be moved around the corner; many strolling through the Giardini did not even notice that it was there. 
Ignorance and indifference, still, are far better reactions than the whistles that the Futurist opera got, including whistles even from the sponsors and cries of “Send the author to the madhouse!” But Sviblova was more ambitious than that. “The important thing in Venice is the first impression,” she said. “For different experts with different positions, different artists resonate one way or the other.”

TITLE: Russian Art Fetches $48 Million
AUTHOR: By John Varoli
PUBLISHER: Bloomberg
TEXT: Three auction houses in London sold 29.1 million pounds ($48 million) of Russian art last week, half the total of last year, as sellers held back and prices fell.
Still, the sales at Sotheby’s, Christie’s International and MacDougall’s finished within presale estimates in what dealers said was still a success after a year of economic crisis.
“The Russian market is down from its peak a year ago, but this week’s results show the worse is behind us,” said William MacDougall, co-chairman of MacDougall’s.
A year ago, the sales totaled 63.5 million pounds.
The sales included 19th-century paintings, Russian and Ukrainian postwar and contemporary art, Imperial vases, Faberge works, silver, porcelain, and Orthodox church icons. Ukrainian collectors were among the most vocal bidders and won some of the top lots of the week.
On Thursday MacDougall’s sold 7.1 million pounds of Russian paintings, passing the presale low estimate of 6.5 million pounds. On Monday it sold 500,000 pounds worth of Orthodox icons. In June 2008, it sold 12.5 million pounds of Russian art.
MacDougall’s top lot yesterday was Ilya Repin’s “Portrait of Madame Alisa Rivoir” (1914), which fetched 1.4 million pounds, beating a top estimate of 1.2 million pounds. The second most expensive lot was Kuzma Petrov-Vodkin’s, “Maternity,” (1922), which sold for 1.07 million pounds. Its low estimate was 1.1 million pounds. Both were records for these artists at auction.
“I bought both these paintings because I love art, and thanks to the grace of God I have the means to buy them,” Alina Aivazova, a Ukrainian collector, who attended the auction, said in an interview.
Sotheby’s this week sold 17.7 million pounds of Russian art, beating the low presale estimate of 15 million pounds. Its June 2008 London sale of Russian netted 39.7 million pounds. 
Sotheby’s sold the most expensive artwork of this week, “The Village Fair” (1920), by Boris Kustodiev. It went to a phone bidder for 2.8 million pounds, more than a top estimate of 1.5 million pounds, and a record for the artist at auction. A pair of mid-19th century Imperial vases sold for 2.6 million pounds, more than a top estimate of 1.8 million pounds. 
Sotheby’s evening auction of top paintings on June 8 sold only 17 out of 27 lots, or 63 percent of the total.
“These are more challenging times,” said Mark Poltimore, deputy chairman of Sotheby’s Europe. “At a recalibrated level the market is operating well, in the new reality, demonstrated by the solid result for our Russian sales.”
On June 9, Christie’s sold 128 out of 198 lots, or 65 percent of the total and grossing 4 million pounds, beating a low presale estimate of 3.3 million pounds. In June 2008 Christie’s sold 11.3 million pounds of Russian art.

TITLE: Bryant Leads Lakers to 15th NBA Title
AUTHOR: By Tom Withers
PUBLISHER: The Associated Press
TEXT: ORLANDO, Florida — Kobe Bryant jumped and punched the air. He did it again, seven years of pent up frustration freed in a fit of joy.
This was the one he wanted more than all the others.
The one to top them all.
One year after failing miserably in the finals against Boston, Bryant and the Los Angeles Lakers found redemption. They finished a season they felt was theirs with a 99-86 win over the Orlando Magic on Sunday night in Game 5 to win the 15th NBA title in franchise history.
For Bryant, this was the missing piece from his resume, his fourth championship and first without former teammate Shaquille O’Neal.
“I don’t have to hear that criticism, that idiotic criticism anymore,” said Bryant, the finals MVP. “It was annoying.”
For Lakers coach Phil Jackson, this was title No. 10, moving him past legendary Celtics coach Red Auerbach for the most by a coach in league history.
“I’ll smoke a cigar in honor of Red,” Jackson said. “He was a great guy.”
For Pau Gasol. For Derek Fisher. For Lamar Odom. For Trevor Ariza and for Andrew Bynum and the rest of the Lakers, this was a title to savor.
“It’s a dream come true,” Gasol said. “The completion of a goal.”
Odom scored 17 points, Ariza had 15, Gasol 14 and 15 rebounds, and Fisher, whose two big 3s in Game 4 saved L.A., had 13 points.
It took longer than Bryant expected, but he has stepped from O’Neal’s enormous shadow — at last.
Bryant averaged 32.4 points, 7.4 assists, 5.6 rebounds and more than a dozen cold-blooded glares per game. He wasn’t out to make friends in these finals, he was out for redemption. Throughout the playoffs, he didn’t smile. He just snarled and bared his teeth.
“I was just completely locked in,” he said. “I was grumpy for a while and now I’m just ecstatic, like a kid in a candy store.”
O’Neal, who won three titles with Bryant before the pair had a major falling out, was glad to see his former teammate win another.
“Congratulations kobe, u deserve it,” O’Neal said on his Twitter page. “You played great. Enjoy it my man enjoy it.”
Bryant and Jackson, whose relationship strained and briefly snapped under the weight of success, are again at the top of their games.
Together.
Following the game, the pair shared a long embrace.
Jackson, who once called Bryant “a selfish player” now sees the 30-year-old in a far different light.
“He’s learned how to become a leader in a way in which people want to follow him,” Jackson said. “That’s really important for him to have learned that because he knew that he had to give to get back in return, and so he’s become a giver rather than just a guy that’s a demanding leader. That’s been great for him and great to watch.”
After the final horn, Bryant and his teammates bounced around the floor of Amway Arena. Moments later, Bryant swept his two daughters, both wearing gold Lakers dresses, into his arms.
It was just as he dreamed.
“It finally felt like a big old monkey was off my back,” he said. “It felt so good to be able to have this moment. For this moment to be here and to reflect back on the season and everything that you’ve been through, it’s top of the list, man.”
Bryant had come up short twice in the finals before, in 2004 with O’Neal against Detroit, and again last season against the Celtics in the renewal of the league’s best rivalry. The Lakers were beaten in six games, losing the finale in Boston by 39 points, a humiliating beatdown that Bryant and his teammates had trouble shaking.
They went to training camp with one goal in mind. This was going to be their season, and except for a few minor missteps, it was.
In the locker room afterward, Bryant made sure Jackson got a champagne shower.
“He took his glasses off, threw his head back and soaked it all in because this is a special time,” Bryant said. “For us to be the team that got him that historic 10th championship is special for us.”
Orlando will be haunted by moments in a series that swung on a few plays and had two overtime games.
After losing Game 1 by 25 points, the Magic had their chance in Game 2 but rookie Courtney Lee missed an alley-oop layup in the final second of regulation. In Game 4, Dwight Howard clanged two free throws with 11.1 seconds, and the Magic allowed Derek Fisher to nail a game-tying 3-pointer to force OT.
Howard, the Magic’s superhero center, was hardly a factor in Game 5. He scored 11 points and took just nine shots. Rashard Lewis scored 18 points, but was only 3 of 12 on 3s for Orlando, which after living on the 3, finally died by it.
The Magic went just 8 of 27 from long range.
When the game ended, Howard didn’t move. As his teammates headed to the locker room, Howard stayed on Orlando’s bench and watched as the Lakers celebrated on the Magic’s floor. Jameer Nelson, Orlando’s point guard who came back for the finals after missing four months with a shoulder injury, finally joined him
The two sat stunned.
“What I just told Jameer is look at it, just see how they’re celebrating,” Howard said. “It should motivate us to want to get in the gym, want to get better.”

TITLE: Coalition
Heavyweights Back Speech By Netanyahu
AUTHOR: By Amy Teibel
PUBLISHER: The Associated Press
TEXT: JERUSALEM — Top figures in Prime Minister Benjamin Netanyahu’s hawkish government lined up behind him Monday in support of his endorsement of Palestinian independence.
The hard-liners appeared buoyed by the nationalistic tone of Netanyahu’s speech and tough conditions he attached despite caving to U.S. pressure in the dramatic about-face.
Netanyahu announced on national TV late Sunday that he was prepared to begin negotiations on the establishment of an independent Palestinian state. But he insisted that a future Palestine be demilitarized and rejected the aspirations of Palestinian refugees to return to homes in Israel.
Those conditions, along with demands that Israel retain sovereignty over a united Jerusalem and continue to expand West Bank settlements, enraged the Palestinians but won him support from hard-liners inside his government who historically have been cool to the idea of Palestinian independence.
Foreign Minister Avigdor Lieberman, the most powerful hard-liner in Netanyahu’s government, said the prime minister’s speech outlined “the balance between our aspirations for peace and the aspiration for security.
“Netanyahu opened the door to the Palestinians and the Arab nations to begin peace talks, and we hope the other side will take up the offer to renew negotiations,” Lieberman said after the speech.
Eli Yishai, head of the ultra-Orthodox Jewish Shas party, said Netanyahu “stressed his commitment to plausible peace and security.”
Shas, Lieberman’s Yisrael Beiteinu and the centrist Labor Party are Netanyahu’s main coalition allies. Labor has long endorsed the concept of a Palestinian state.
Netanyahu spoke after months of pressure from Washington to endorse Palestinian statehood, as successive Israeli governments before his have done.
The Palestinians want to establish a state that includes all of the West Bank and east Jerusalem — areas captured by Israel in the 1967 Mideast War. Netanyahu ruled out sharing Jerusalem and made no mention of uprooting Jewish settlements built in the West Bank. Instead, he said existing settlements should be allowed to expand while negotiations proceed.
Palestinian officials denounced Netanyahu’s proposal immediately after he finished his speech, saying the conditions in effect ruled out negotiations on all key issues at the heart of the Israeli-Palestinian conflict.
“Netanyahu’s speech closed the door to permanent status negotiations,” said negotiator Saeb Erekat.
Netanyahu’s spokesman, Mark Regev, said Monday the Israeli leader had merely laid out an opening position that outlined his vision of a future peace agreement.
“These are not preconditions, but they’re essential requirements for success in these talks,” he told reporters.
Even Cabinet Minister Benny Begin, who left Netanyahu’s first government more than a decade ago following territorial concessions to the Palestinians, did not openly clash with him.

TITLE: Iran Supreme Leader Order Vote Fraud Probe
AUTHOR: By Anna Johnson and Ali Akbar Dareini
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — Iran’s supreme leader ordered Monday an investigation into allegations of election fraud, marking a stunning turnaround by the country’s most powerful figure and offering hope to opposition forces who have waged street clashes to protest the re-election of President Mahmoud Ahmadinejad.
State television quoted Ayatollah Ali Khamenei directing a high-level clerical panel, the Guardian Council, to look into charges by pro-reform candidate Mir Hossein Mousavi, who has said he is the rightful winner of Friday’s presidential election.
The decision comes after Mousavi wrote a letter appealing to the Guardian Council and met Sunday with Khamenei, who holds almost limitless power over Iranian affairs. Such an election probe by the 12-member council is uncharted territory and it not immediately clear how it would proceed or how long it would take.
Election results must be authorized by the council, composed of clerics closely allied with the unelected supreme leader. All three of Ahmadinejad’s challengers in the election — Mousavi and two others — have made public allegations of fraud after results showed the president winning by a 2-to-1 margin.
“Issues must be pursued through a legal channel,” state TV quoted Khamenei as saying. The supreme leader said he has “insisted that the Guardian Council carefully probe this letter.”
The day after the election, Khamenei urged the nation to unite behind Ahmadinejad and called the result a “divine assessment.”
The results touched off three days of clashes — the worst unrest in Tehran in a decade. Protesters set fires and battled anti-riot police, including a clash overnight at Tehran University after 3,000 students gathered to oppose the election results.
One of Mousavi’s Web sites said a student protester was killed early Monday during clashes with plainclothes hard-liners in Shiraz, southern Iran. But there was no independent confirmation of the report. There also have been unconfirmed reports of unrest breaking out in other cities across Iran.
Security forces also have struck back with targeted arrests of pro-reform activists and blocks on text messaging and pro-Mousavi Web sites used to rally his supporters.
A top Mousavi aide, Ali Reza Adeli, told The Associated Press that a rally planned for later Monday was delayed. Iran’s Interior Ministry rejected a request from Mousavi to hold the rally and warned any defiance would be “illegal,” state radio said.
But one of Mousavi’s Web sites still accessible in Iran said Mousavi and another candidate, Mahdi Karroubi, planned to walk through Tehran streets to appeal for calm. A third candidate, the conservative Mohsen Rezaei, has also alleged irregularities in the voting.
State TV quoted Khamenei urging Mousavi to try to keep the violence from escalating and saying “it is necessary that activities are done with dignity.”
Mousavi, who served as prime minister during the 1980s, has also threatened to hold a sit-in protest at the mausoleum of the late Ayatollah Ruhollah Khomeini, founder of the 1979 Islamic Revolution. Such an act would place authorities in a difficult spot: embarrassed by a demonstration at the sprawling shrine south of Tehran, but possibly unwilling to risk clashes at the hallowed site.
Overnight, police and hard-line militia stormed the campus at the city’s biggest university, ransacking dormitories and arresting dozens of students angry over what they say was mass election fraud.
The nighttime gathering of about 3,000 students at dormitories of Tehran University started with students chanting “Death to the dictator.” But it quickly erupted into clashes as students threw rocks and Molotov cocktails at police, who fought back with tear gas and plastic bullets, a 25-year-old student who witnessed the fighting told The Associated Press. He would only give one name, Akbar, out of fears for his own safety.
The students set a truck and other vehicles on fire and hurled stones and bricks at the police, he said. Hard-line militia volunteers loyal to the Revolutionary Guard stormed the dormitories, ransacking student rooms and smashing computers and furniture with axes and wooden sticks, Akbar said.
Before leaving around 4 a.m., the police took away memory cards and computer software material, Akbar said, adding that dozens of students were arrested.
He said many students suffered bruises, cuts and broken bones in the scuffling and that there was still smoldering garbage on the campus by midmorning but that the situation had calmed down.
“Many students are now leaving to go home to their families, they are scared,” he said. “But others are staying. The police and militia say they will be back and arrest any students they see.”

TITLE: Ronaldo 
To Transfer To Real For $131 Million
PUBLISHER: The Associated Press
TEXT: LONDON — Manchester United accepted a world-record transfer offer for Cristiano Ronaldo from Real Madrid on Thursday, clearing the World Player of the Year to negotiate personal terms with the Spanish club.
The Premier League champions received an unconditional offer of $131 million for Ronaldo, and unlike last offseason is willing to see its 24-year-old star join a major European rival.
United said: “At Cristiano’s request — who has again expressed his desire to leave — and after discussion with the player’s representatives, United have agreed to give Real Madrid permission to talk to the player.
“Matters are expected to be concluded by 30 June.”
Madrid confirmed the offer for Ronaldo in a statement, saying: “The club hopes to reach an agreement with the player in the coming days.”
The Portugal winger, who joined United from Sporting Lisbon in 2003, spent last June pushing for what he called at the time a “dream move” to Madrid.
An unsuccessful complaint about Madrid’s pursuit was made to soccer’s world governing body FIFA and a move was blocked by United manager Alex Ferguson, who traveled to Lisbon to persuade his player to stay at Old Trafford.
That didn’t stop Ronaldo being linked with Madrid, and Ferguson’s irritation boiled over in December when he said he “wouldn’t sell Madrid a virus,” describing the club as a “mob.”
But now a world-record bid appears too hard to resist for a club whose debts have spiraled to nearly $1 billion.
Ronaldo, who was under contract until 2012, plunged his future into doubt after United lost the Champions League final to Barcelona last month, saying he wasn’t sure if would stay. This came despite his having vowed to remain with United in the buildup to the match and even in a broadcast interview conducted with himself.
The return of Florentino Perez as Madrid’s president has changed things as the billionaire looks to spend lavishly to return the Spanish side to the glory days of its “galactico” era.
Brazilian star Kaka was signed away from AC Milan earlier this week for a reported fee of around $92 million.
But the offer for Ronaldo would eclipse that, as well as the $65 million Madrid paid to lure former France striker Zinedine Zidane away from Juventus in 2001.
Ronaldo’s arrival could strengthen Madrid’s position as world soccer’s richest club based on revenue. According to accountancy firm Deloitte, Madrid earned over $512 million compared to second-place United’s $455 million.
On the pitch, though, Ronaldo would be joining a club which just had its first trophyless season in three years, while United won a third straight Premier League title, the Club World Cup, and the League Cup.

TITLE: Murray Ready to Step Up a Level at Wimbledon
AUTHOR: By Steve Griffiths
PUBLISHER: Agence France Presse
TEXT: LONDON — Andy Murray admits he will have to produce the form of his life to follow his Queen’s triumph with victory at Wimbledon.
Murray clinched his fourth ATP Tour title this year on Sunday as he became the first Briton since Bunny Austin in 1938 to win the pre-Wimbledon warm-up event at Queen’s.
With a first grasscourt trophy secured thanks to his 7-5, 6-4 win over America’s James Blake, Murray can turn his attention to ending an even longer wait for British success at Wimbledon.
For over a decade it was Tim Henman who laboured in vain to hold aloft the famous gold trophy in south-west London. Now it is Murray who has to shoulder the burden of landing Britain’s first men’s singles title since Fred Perry in 1936.
The world number three has enjoyed a superb year and is firmly established as one of the strongest contenders to break Roger Federer and Rafael Nadal’s All-England Club duopoly.
But Murray, 22, knows he will have to raise his game to another level if he wants to take the title from defending champion Nadal.
“I go into every tournament with the mentality that I’m going to win it, but I know I’ll have to play my best tennis ever to do it,” he said.
“I’m not planning on getting caught up in the whole hype because I don’t think that helps. I’m going to try and just concentrate on playing and winning matches.
“A lot of people don’t understand how tough it is. And especially right now with the guys that are in front of me in the rankings, and even the ones that are just behind me.
“In my opinion, Roger and Rafa are the two best ever. I think they’ll have the most Grand Slam titles between them by the time they finish.
“They’ve competed in so many and won so many of the big tournaments the last few years. So I’m going to have to beat them if I want to do it.
“That’s not an easy thing to do. And even if I’m playing great, I can still lose that match.
“That’s why no one in Britain’s done it for such a long time, because it is that difficult.”
Murray’s first Wimbledon appearance in 2005 ended in a five-set defeat to David Nalbandian in which the Scot, visibly wilting as the match went on, squandered a two-set lead.
He was only a callow teenager then, but Murray now possesses one of the most accurate serves in the game and the ability to mix devastating groundstrokes with the subtlety of a more mature player.
Despite his impressive progress, Murray believes he is still some way short of getting the most out of his attributes.
“I think I can still get stronger. In a year and a half’s time I think I’ll be close to my peak, and peaks don’t normally last that long, so I hope that I can make the best use of it,” he said.

TITLE: U.K. Reports Its First Fatal Case Of Swine Flu
PUBLISHER: The Associated Press
TEXT: LONDON — A person with underlying health conditions died of swine flu in Scotland on Sunday — the first reported death from the illness outside the Americas, health officials said.
Britain has been harder hit by the virus — known as H1N1_ than elsewhere in Europe. Earlier Sunday, Britain had reported another 61 cases of swine flu, bringing the U.K. total to 1,226 cases.
“Tragic though today’s death is, I would like to emphasize that the vast majority of those who have H1N1 are suffering from relatively mild symptoms, “ Scottish Health Secretary Nicola Sturgeon said. “I would reiterate that the risk to the general public remains low and we can all play our part in slowing the spread of the virus by following simple hygiene procedures.”
Now that swine flu has officially been declared to be a pandemic, or global outbreak, health authorities expect to see more cases and deaths worldwide. The World Health Organization said last week that the virus has not become any more lethal, but is now unstoppable.

TITLE: Sharapov Beaten By Li in Final In Birmingham
PUBLISHER: Agence France Presse
TEXT: BIRMINGHAM, England — Maria Sharapova’s Wimbledon build-up suffered a setback on Saturday when she was knocked out of the Birmingham grasscourt event 6-4, 6-4 by China’s Li Na.
Sharapova, the champion here in 2004 and 2005, is still feeling her way back after over 10 months out with a shoulder injury and she showed signs of a quick revival by reaching the French Open quarter-finals.
But the unseeded Russian was plagued by errors on Saturday, suffering six breaks of serve in her 90-minute defeat.
“I definitely wasn’t playing with the same intensity I had in the last couple of matches. Some days you have it, some days you don’t,” said Sharapova.

TITLE: Possible Nuke Test Sites Found in N. Korea
AUTHOR: By Hyung-Jin Kim
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea — The U.S. and South Korea have pinpointed 11 underground sites in North Korea where it could conduct a third nuclear test, a newspaper reported Monday ahead of a summit between the two allies on the communist regime’s growing atomic threat.
South Korean President Lee Myung-bak departed on a trip to Washington for summit talks Tuesday with President Barack Obama, which are expected to be dominated by the North’s nuclear and missile programs.
Tension on the Korean peninsula spiked after North Korea declared Saturday it would step up its nuclear bomb-making program by producing more plutonium and uranium, two key ingredients.
The North also threatened war with any country that tries to stop its ships on the high seas as part of new U.N. Security Council sanctions passed in response to Pyongyang’s May 25 nuclear test.
North Korea is believed to have enough weaponized plutonium for at least half a dozen atomic bombs, and a U.S. government official said last week that Pyongyang may be preparing for another nuclear test, its third.
The official spoke on condition of anonymity in order to discuss the unreleased information and provided no details.
U.S. and South Korean intelligence were keeping a close eye on signs of an impending test.
“South Korean and U.S. intelligence authorities have spotted 11 key underground facilities in North Korea and embarked on an intensive lookout,” South Korea’s mass-circulation JoongAng Ilbo newspaper reported.
It quoted an unnamed government intelligence official as saying the allies have mobilized spy satellites and human intelligence networks to check for vehicle movements and other unusual activity.
The mobilization is based on “intelligence that North Korea can conduct a third nuclear test in protest against the U.N. Security Council sanctions,” the paper quoted the official as saying.
Also Monday, Yonhap news agency quoted an unidentified intelligence official as saying the North may have already built two to three underground test sites near its known Punggye-ri site in the remote northeast, where it conducted its first and second tests.
South Korea’s Defense Ministry and National Intelligence Service said they could not confirm the reports.
A news report from Moscow quoted an official in the Russian military general staff as saying there has been a decrease in visible activity around North Korea’s nuclear facilities in recent days.
This could either indicate that the North has prepared for a new underground nuclear test or is taking a break, according to the state-owned RIA-Novosti news agency. It did not name the official, and the general staff could not immediately be reached for comment.
North Korea has also been preparing to fire an intercontinental ballistic missile capable of striking the United States. It says the nuclear and missile programs are a deterrent against the United States.
However, Washington fears that cash-strapped North Korea will sell its nuclear technology to rogue nations, spreading the atomic threat.
The regime has also warned it cannot guarantee the safety of South Korean and U.S. navy ships sailing near the disputed western sea border, raising the specter for a maritime confrontation. The area is the scene of two bloody maritime skirmishes between the Koreas in 1999 and 2002.
South Korea’s navy chief of staff said a maritime skirmish could occur “at any time” and that his forces were prepared.
“We will cut off the enemy’s wrist even if they touch the tip of our finger,” Jung Ok-keun said at a ceremony marking a deadly naval clash with North Korea in 1999.