SOURCE: The St. Petersburg Times
DATE: Issue #1509 (71), Tuesday, September 15, 2009
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TITLE: Medvedev Puts Limits On Alcohol  Can Sizes
AUTHOR: By Maria Antonova and Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev on Friday gave teeth to his calls for a crackdown on alcoholism, ordering the government to limit the can sizes of low-alcohol beverages and to place larger health warnings on all types of alcohol. 
Medvedev also told the government to come up with a national strategy to fight alcoholism by Dec. 15, the latest in a series of recent high-profile comments about the country’s drinking problem.
Russia’s per capita consumption of pure alcohol is 18 liters per year, “including babies,” Medvedev said during a meeting with government and regional officials to discuss alcohol consumption, citing Health and Social Development Ministry statistics. 
The government’s goal is to reduce that number to 14 liters by 2012, Health and Social Development Minister Tatyana Golikova told Medvedev in August.
The order also said all alcohol would need to be marked with health warnings covering at least one-fifth of their packaging by Dec. 1.
Medvedev also proposed introducing state control of alcohol sales, asking the government to discuss a state monopoly on the sale of spirits and a minimum price for a bottle of vodka, based on production costs and a tax on alcohol.
The government, already struggling to fill a growing budget deficit, has stepped up efforts to collect tax revenue from alcohol producers. 
First Deputy Prime Minister Viktor Zubkov said in July that revenue from the alcohol tax had fallen 13 percent since last year and that the newly created Federal Alcohol Market Regulatory Service would soon be ready to start overseeing the industry.
Currently, the tax for a half-liter bottle of vodka should be 37 rubles ($1.20), said Natalya Zagvozdina, a retail analyst at Renaissance Capital. 
Vodka accounts for 56 percent of total alcohol consumption in Russia. 
But about 51 percent of vodka is so-called “gray” production, which is made at licensed plants that circumvent the tax payments. Untaxed vodka will account for 1.17 billion liters of the 2.28 billion-liter market this year and be worth about 100 billion rubles ($3.3 billion), Zagvozdina said.
She said it was hard to evaluate the proposed measures, since “it’s not clear what the goal is: to decrease alcohol consumption or to raise money for the budget.” 
The campaign echoes Soviet leader Mikhail Gorbachev’s notoriously unpopular attempt to cut down on drinking in the mid-1980s, which included restrictions on alcohol stores’ opening hours and the destruction of Crimean vineyards.
In July, Medvedev praised Gorbachev’s campaign, saying it led to unprecedented demographic growth. “The alcohol consumption we have is colossal,” Medvedev said at the time, adding that he was “astonished” that Russians drink more now than in the 1990s.
A report in The Lancet medical journal in June said alcohol-related diseases caused about half of all deaths of Russians between the ages of 15 and 54 in the 1990s.
By Dec. 1, the government must “limit the volume of consumer packaging of low-alcohol drinks to 330 milliliters,” according to Medvedev’s order, a copy of which was published on the Kremlin web site. 
The rules would apply to beverages with an alcoholic content of up to 7 percent of total volume.
Beer, frequently sold in plastic bottles as big as 5 liters, is not affected by the measure, said Yulia Khramaikova, a spokeswoman for the Russian Beer Union. 
Khramaikova said Russian law categorizes beer separately from low-alcohol drinks, such as cocktails and alcopops. 
The union, whose members produce 95 percent of Russia’s beer, “supports many of the measures, such as increasing punishments for selling alcohol to minors,” according to an e-mailed statement.
Russia’s low-alcohol drinks market was about 430 million liters in 2008, down 19 percent from a year earlier, according to a market research company Business Analytica. 
In the first half of 2009, only 22 percent of the market was packaged in 330 milliliters cans or less, it said. The rest was sold in bigger cans, including 14 percent in packaging of more than 600 ml.
Medvedev told the government to form its anti-alcoholism strategy in consultation with religious groups and nongovernmental organizations.
“I think this is a sign of the good relations between the president and Patriarch Kirill,” said Alexei Makarkin, deputy head of the Center for Political Technologies, a think tank. 
He cited recent decisions to allow Orthodox religious education in schools and to reintroduce official chaplains in the armed forces.

TITLE: Putin Weighs War, U.S. and 2012 Election
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: NOVO-OGARYOVO, Moscow Region — Prime Minister Vladimir Putin passed on bread and hardly touched his wine Friday as he gave a passionate lecture on World War II and spoke about the incumbent U.S. president during a sweeping lunchtime discussion with Western experts on Russia. 
The 2 1/2-hour meal with the Valdai Club of leading Western reporters and scholars specializing in Russia — most of it behind closed doors — was a routine annual meeting seeking to give them firsthand knowledge of Moscow’s thinking on key local and international issues. Unlike the previous two encounters, which revolved largely around the Georgian war and Putin’s plans to step down as president, this rendezvous covered a greater variety of topics, the participants said.
Asked about U.S.-Russian ties, Putin said there hadn’t been much progress since a July summit in Moscow, which he attributed to President Barack Obama’s preoccupation with health care reform, said Angela Stent, head of the Russia and Eurasia department at Georgetown University.
“If he’s able to do that, then he will be able to move forward,” she recalled Putin as saying about Obama. “His popularity will rise and he will be able to deal more with Russia.”
In response to another question, Putin reiterated that Russia would continue efforts to diversify its economy away from a reliance on oil and gas exports, despite the economic crisis.
Putin also restated his intention to sit down with President Dmitry Medvedev to decide on their presidential ambitions in the next election, in 2012, said Nikolai Zlobin, director of Russian and Asian programs at the World Security Institute, a think tank in Washington.
Zlobin quoted Putin as saying the two leaders would take into account the political and economic conditions, including the popularity of United Russia, the ruling party chaired by Putin.
The prime minister did not directly answer whether he or Medvedev was the boss in Russia, but he repeated that he was comfortable with the amount of power bestowed on him as head of the government, Zlobin said.
Putin, who had spoken at length about the economy and politics, livened up when Zlobin asked him the two questions about his relations with Medvedev. 
“He apparently had fun,” Zlobin said. “He wanted personal questions.”
On his way out of the meeting, Putin shook hands with Zlobin, despite hurrying to have a telephone conversation with Turkish Prime Minister Recep Erdogan.
Valdai Club members are scheduled to meet Medvedev on Tuesday, a day after his 44th birthday. 
Putin joked at times, including when Zlobin began asking his questions, which he framed as “requests” to dispel stereotypes. After the word “requests,” Putin jumped in. “Nikolai, we are tight on money.”
Fielding a question about Russia’s gas trade, Putin said Turkey could replace Ukraine as the main transit route for its westbound gas, said Alexander Rahr, a Russia expert at the German Council on Foreign Relations.
Rahr, who has written a biography of Putin, noted that Putin ignored his bread and only tasted the main course.
“He apparently looks after his athletic figure,” Rahr said. 
Putin took no more than a couple of sips of his white wine, and waiters didn’t pour him any red, he said.
Another participant noted that Putin was keen for Russia to engage in closer cooperation with Europe in terms of trade in military equipment.
“It seemed interesting to me that he said for the first time that Russia wasn’t afraid of cooperating with the West in the area of defense industry and manufacture of military systems,” said Oksana Antonenko, program director for Russia and Eurasia at the International Institute for Strategic Studies, a think tank in London. 
“It’s the West that’s afraid of it,” Antonenko.
She speculated that Russia’s intention to buy a French frigate was an effort to start such interaction.
Colonel General Nikolai Makarov, chief of the Armed Forces’ General Staff, said last month that the military planned to buy a Mistral-class helicopter carrier and then jointly produce three or four additional carriers with France in Russian shipyards. The contract could be signed before the year’s end, he said. 
Antonenko said Russia could potentially sell its military cargo planes to the West.
Opening the meeting, Putin noted that the crisis hadn’t affected his 52 visitors’ wellbeing. 
“Everyone looks nourished and well-dressed,” Putin commented to polite laughter.

TITLE: Okhta Center Opponents Accuse Authorities of Foul Play
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Opponents of the Okhta Center (Gazprom Tower) have lost a case in court, but say that further evidence of multiple violations on the part of the developer and city officials came to light during the two-week trial. 
On Friday, Judge Lyudmila Golovkina of the Krasnogvardeisky District Court ruled that the demands of the plaintiffs were not to be satisfied. On the same day, City Hall banned an anti-tower picket scheduled for Wednesday.
The Okhta Center’s opponents claim that the developer deliberately organized the recent public hearing for 9 a.m. on Sept. 1, which is celebrated as the Day of Knowledge in Russia, when schools and universities open after the summer holidays, in order to make it difficult for protesters to attend the event. They say that in their haste to secure that date, officials and the developer, ODTs Okhta, violated a number of laws and regulations, rendering the hearing invalid.
The subject of the hearing was the exemption of the planned tower, a 396-meter skyscraper, from the city’s law on height regulations that only allows 100-meter tall buildings in that area. ODTs Okhta claims that it has not broken any laws or regulations. 
The tower is to house the headquarters of Gazprom Neft, a subsidiary of the Russian state energy giant Gazprom.
Yevgeny Kozlov, chairman of the coordinating committee of the Movement of Civil Initiatives (DGI), and Tatyana Krasavina, the leader of preservationist movement Okhtinskaya Duga, filed a lawsuit against the Krasnogvardeisky District’s Land Use and Development Commission (KZZ) on Aug. 27 — before the hearing took place — asking the court to declare the preparatory work done for the Sept. 1 public hearing by this state body “illegal” and consequently, to cancel the hearing. 
“We found out that no proper session of the District’s Land Use and Development Commission was held on Aug. 12; there was only a meeting led by [the district’s head Maria] Shcherbakova,” Kozlov said by phone on Monday.
“There was an attempt to present a dubious photocopy from the City’s Commission register, which could be qualified as attempted forgery. The City’s Commission gave the documentation to the District’s Commission on Aug. 19, rather than on Aug. 12, as they had tried to convince us.”
The plaintiffs received proof that the developer’s documentation was incomplete, since it lacked a conclusion regarding the visibility evaluation of the object and its effect on views of the city, which by law should have been completed before the public hearings were held, Kozlov said.
The plaintiffs also alleged that the public was not informed about the hearing, which was held at Hotel Karelia, properly and in good time — 20 days in advance, as required by law. A notice was published anonymously in the Nevskoye Vremya newspaper’s Russian-Georgian war anniversary special, which was published on the morning of Aug. 13 — 19 days before the hearing. The developer, however, claimed a number of newspapers had been distributed on Aug. 12.
“We found out how they distributed the paper,” Kozlov said. “Giving away two packs of newspapers at the Okhta tram stops doesn’t mean that the public was officially informed about the hearing.”
Kozlov said all the materials that the opponents gained access to during the course of the trial will be used in letters to the Prosecutor, the City’s Land Use and Development Commission and the Legislative Assembly’s deputies as well as further lawsuits.
“As well as all this, I think all this information made it clear to many citizens how such questions are being solved [in St. Petersburg], and how the city and district authorities and Okhta Center regard citizens’ rights and the law,” he said.
Kozlov said he was not surprised by the court’s decision.
“The decision was totally predictable and expected,” he said. “The difficulty of cases like this lies in proving that in breaking the law, they also violated our civil rights.”
The full written verdict will be given to the plaintiffs on Tuesday. Kozlov said that after studying it, they may appeal.
• City Hall banned an anti-tower picket on Friday. The Protect St. Petersburg coalition, which includes a number of pressure groups such as Living City and Okhtinskaya Duga, had informed City Hall, as required by law, that they would picket the City’s Town-Planning Committee (KGA) and Committee for the Use and Preservation of State Monuments (KGIOP) from 11.30 a.m. on Wednesday. 
City Hall cited “planned garden work” as the reason for the ban, and suggested the protesters could gather in the Chernyshevsky Gardens, which are located in a different district of the city.
The Okhta Center will also be the focus of a major annual rally, March for the Preservation of St. Petersburg, due to be held on Oct. 10.

TITLE: Israel Confirms Netanyahu Did Make Secret Trip to Moscow
PUBLISHER: Combined Reports
TEXT: MOSCOW — Israel’s deputy prime minister confirmed Saturday that Prime Minister Benjamin Netanyahu had visited Russia but declined to elaborate on the affair, which has triggered media accusations of official disinformation.
“He was in Russia. It created some controversy about the way it was published in Israel,” Dan Meridor said in Geneva on the sidelines of a conference about global issues hosted by Britain’s International Institute for Strategic Studies.
“The content was not discussed in public. Some things are better discussed [privately],” said Meridor, who is also minister of intelligence and atomic energy.
Reports of the Moscow visit last Monday followed the interception by Russian warships of a cargo ship off West Africa last month. Media reports, denied by Russia, said the Arctic Sea was carrying to Iran S-300 missiles that were detected by Israel.
Prime Minister Vladimir Putin, attending a meeting of foreign experts on Russia on Friday, dodged a question about whether Netanyahu had secretly visited Moscow, including speculation that Netanyahu wanted to warn Russia of an impending strike against Iranian nuclear facilities, participants in the meeting said.
Putin, however, warned against using force or new sanctions against Iran for its defiance over its nuclear program, saying Moscow has no evidence that Tehran is seeking nuclear arms.
“Any use of force, delivering any kind of strike, won’t help, won’t solve the problem. On the contrary, it will hurt the entire region. As for sanctions, they won’t bring the desired effect,” Putin said, according to his spokesman, Dmitry Peskov.  
(SPT, AP)

TITLE: Prosecutors, Citing CIA Hoax,  Pursue NGO for Extremism
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Novorossiisk prosecutors have embraced a fictitious CIA document to justify their case to close a small human rights group on extremism charges.
Prosecutors have asked a Novorossiisk court to outlaw the Committee for Human Rights as extremist because one of its supporters held up a poster reading “Freedom isn’t granted, it’s taken” at an April 4 rally, the group’s deputy head, Vadim Karastelyov, told The St. Petersburg Times.
The slogan was deemed as extremist by two linguistic experts, a historian and a child psychologist, who are cited in the prosecutors’ lawsuit, a copy of which is posted on the rights group’s web site, Komitet23.org.
The historian, Vladimir Rybnikov, identified as an associate professor at the Gelendzhik branch of Kuban State University, wrote in his findings that Karastelyov was “serving the interests of those who want to shatter the socio-political order of modern Russia.”
Rybnikov explained that the slogan was in line with the Dulles Plan, the central document of a conspiracy theory under which CIA chief Allen Dulles wanted to destroy the Soviet Union by secretly corrupting its cultural heritage and moral values. But the text of the plan, which has been cited by prominent Russians like Vladimir Zhirinovsky and Nikita Mikalkov, is widely believed to have originated in the 1971 novel “The Eternal Call” by Anatoly Ivanov, and it was first attributed to Dulles in 1993 by a Russian Orthodox leader.
The other Novorossiisk expert, Svetlana Guzeva, who heads the Dialogue Center, a municipal body providing psychological, educational and medical support for children, said in her findings that the slogan “can be understood” by teenagers to be “an invitation to actively oppose the activities of state bodies.”
The April 4 rally where the slogan was used sought to call attention to the illegality of a Krasnodar region law introducing a curfew for minors, Karastelyov said by telephone Friday. 
The law was illegal for nine months, until a necessary federal law was passed in May, he said.
His group, which is comprised of just two members, Karastelyov and his wife, was registered by local authorities in 2001.
A spokeswoman for the Novorossiisk prosecutor’s office referred requests for comment to the regional prosecutor’s office. A spokesman for that office refused to comment, saying the case was ongoing.
An inquiry submitted by fax to the Oktyabrsky District Court, where the lawsuit was filed, went unanswered Friday.
A preliminary hearing will be held Sept. 17, Karastelyov said.
filing the lawsuit, prosecutors sent three warnings to the group in May, accusing it of provoking minors to anti-social behavior, a phrase used by prosecutors to describe extremist activity, Karastelyov said. The warnings have not come into force because the group is appealing them in court, he said.
Rybnikov’s findings were dated May 29. On Friday, a spokeswoman at the Gelendzhik branch of Kuban State University said Rybnikov no longer worked there. Rybnikov did not reply to an e-mailed request for comment.
Guzeva didn’t reply to a request for comment left with a spokeswoman at her office.
Court rulings on what constitute extremist materials came under fire after they were compiled into a vague and controversial list by the Justice Ministry last month.

TITLE: Prosecutors Probe Alleged Embezzlement at Bolshoi
AUTHOR: By Anastasia Ustinova
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian prosecutors opened a criminal investigation into the possible embezzlement of funds earmarked for the restoration of Moscow’s Bolshoi Theater, founded in 1776.
Auditors uncovered violations in a probe of the Office for Construction, Redevelopment and Restoration, the federal agency that’s in charge of the Bolshoi project, the Investigative Committee of the Russian Prosecutor General’s Office said on its web site Monday.
In August 2003, the agency signed a contract with Kurortproekt to design the second phase of the Bolshoi renovation for 98 million rubles ($3.2 million), investigators said. Under an addendum to the contract, Kurortproekt’s fee rose to 164 million rubles.
“From 2003 to 2009, however, the agency paid Kurortproekt three times for the same design work and documents,” investigators said. The agency paid a total of about 957 million rubles, including 581 million rubles for drawing up documents, investigators said.
The 185-year-old theater closed in 2005 for a planned 21 billion rubles of work on the facade, foundation and main stage to restore the original acoustics lost in a renovation in the 1930s. The project halted when it was 30 percent complete and has been delayed for three years.
Lyubov Yemelyanova, a Kurortproekt spokeswoman, referred questions to the Office for Construction, Redevelopment and Restoration when contacted by Bloomberg News.

TITLE: Rights Group Warns Conscripts
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: As the autumn military draft draws closer — it begins on Oct. 1 — the Soldiers’ Mothers human rights group is campaigning to stop the illegal practice of military commissions confiscating the passports of those being conscripted.
“Confiscation of passports has been routine for years, and it is completely illegal,” said Ella Polyakova, the chairwoman of the St. Petersburg-based Soldiers’ Mothers. She warned potential conscripts and their parents to be cautious, as the confiscations may have adverse consequences.
Human rights advocates say the confiscation of passports is carried out for several reasons.
“First of all, it makes it easy to send conscripts on missions to other countries; for example, that happened a lot  during the conflict between Georgia and South Ossetia,” Polyakova said. “Our organization knows of at least 300 young men whose passports were taken and who were promptly sent to South Ossetia.”
“Hundreds of young men were sent to the war zone with no documents whatsoever on them,” Polyakova said. “In such a situation, their participation in military action cannot be proven. The men were risking their lives, without being payed and without even being awarded the official status of someone who has been sent on a military mission.”
The Soldiers’ Mothers organization says this illegal practice of passport confiscation also helps military authorities to force conscripts to go into contract service when they have finished serving their obligatory conscription periods.
The organization routinely receives complaints from recruits who are forced or tricked into signing contracts with the army and then have trouble getting out of them.
A couple of years ago, in a widely publicized case in Pskov, around 500 young men were signed up by force. “This happens because Russia’s Defense Ministry sends illegal orders to various regions demanding certain numbers of contracts be signed by a specific deadline,” said Polyakova. “Regional commanders struggle to follow these orders.” 
The Russian army is struggling to get recruits. In 2008 a group of draftees serving with a detachment in a district on the outskirts of St. Petersburg tried to sue its commanders after allegedly being forced to sign up for regular service.
Polyakova said that such practices, complete with threats and promises of nonexistent benefits, are commonplace in the Russian army.
Soldiers’ Mothers submitted an official enquiry to the authorities of the Leningrad Military District asking officials to investigate the claims. The district military prosecutor’s office conducted a rapid investigation but nothing came of it.
Andrei Kalikh, a leading expert at the Center for Democratic Development and Human Rights, said the confiscation of passports also makes it easier to send recruits into forced labor. This corrupt practice whereby recruits are sent off to build private summer houses or other constructions belonging to military chiefs or their civilian friends has long been the focus of investigations by organizations such as Soldiers’ Mothers and the Center for Democratic Development and Human Rights.
“I personally know of one case in which a recruit spent a total of five years in slavery, being literally handed over from one owner to another,” Polyakova said, adding that although slavery is not uncommon, proving such cases in court is usually extremely difficult as victims are afraid to testify.
In the most high profile of such soldier-turned-slave cases, in 2005, Leningrad Military District conscript Maxim Gugayev spent months in forced labor at a farm owned by a retired army officer in Krasnoye Selo. He weighed less than 40 kilograms and was suffering from concussion, bruised internal organs and burns to his feet caused by acid when he was finally admitted to hospital. Colonel Alexander Pogudin, who arranged Gugayev’s confinement at the farm, was fined 50,000 rubles ($1,600) in a subsequent court case.
At the military hospital, Gugayev first told investigators he had been beaten by unknown assailants. But when he returned to his native Yaroslavl, he wrote an appeal to the St. Petersburg Military Prosecutor’s Office and described his forced confinement. Lawyers used Gugayev’s conflicting testimonies to help the colonel get off with just a fine. 
“Illegal passport confiscation is an integral part of the corrupt structure that is the Russian army — essentially it’s nothing more than yet another powerful state corporation,” Kalikh said.

TITLE: Woman Charged in Dog-for-Vodka Murder
AUTHOR: By Carl Schreck
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Prosecutors in the central Chuvash Republic have wrapped up the investigation of a woman charged with beating her neighbor to death for selling off her boyfriend’s dog in order to buy a half-liter of vodka.
The events unfolded on the evening of June 5 in the regional capital, Cheboksary, when the suspect, 22, discovered that the neighbor had sold the dog to buy the vodka, regional investigators said in a statement.
Enraged, she went out looking for the thief and ran into him two hours later as she was returning home. What ensued, prosecutors said, was a brutal assault in which the woman landed at least 40 punches and kicks to various parts of the man’s body, including the head.
The neighbor, 53, died at the scene of his injuries shortly thereafter, regional Investigative Committee official Oleg Dmitriyev told Regnum.ru.
Dmitriyev said the damage from the suspect’s kicks was magnified by the fact that she was wearing high heels at the time, the web site reported. Furthermore, the victim was reportedly extremely drunk at the time, rendering him incapable of defending himself.
The suspect is set to go on trial at the Leninsky District Court in Cheboksary. She stands charged with aggravated deadly assault, punishable by up to 15 years in prison.

TITLE: Putin Praises Choice Of Sberbank-Magna
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: NOVO-OGARYOVO, Moscow Region — General Motors made the “right, market-based choice” by agreeing to sell its Opel unit to a half-Russian consortium, Prime Minister Vladimir Putin said Friday in his first public comments on the deal.
The decision, announced a day earlier, will be the first substantial step in integrating the economies of Russia and Western Europe, Putin said at a meeting with the Valdai Club of Western experts on Russia.
As a result of the sale, Sberbank and Canadian auto parts maker Magna International will equally hold a 55 percent stake in the Germany-based carmaker and have access to GM technology. Sberbank has said it could later resell its 27.5 percent holding to either VEB or GAZ, the Canadian-Russian consortium’s industry partner.
Russian leaders including Putin had lobbied hard for the deal in hopes that it could help revive the country’s stagnating auto industry. German Chancellor Angela Merkel also strongly supported the Sberbank-Magna bid.
“It’s a pleasant thing. … I hope it’s one of the first steps that will lead us to a real integration of the European economy,” Putin said. “We have to do justice to GM leadership. … They made the right, market-based choice.”
Magna and Sberbank were able to convince the U.S. automaker to let Opel retain access to GM technology, one of the most contentious issues of the deal. Opel will still have the right to use GM licenses, paying a royalty as before, said Christopher Preuss, GM Europe’s vice president for communications, Vedomosti reported Friday.
GM, which will keep a 35 percent stake in Opel, will hold the licenses for Opel’s old designs, but Magna and Sberbank will get the rights to all new Opel engineering achievements, Preuss said.
Accepting the Magna-led offer was also a demonstration of social responsibility, Putin said, because the two companies offered a “sensible” plan to keep as many jobs in Germany as possible. He conceded that certain cuts would ensue, but said Magna and Sberbank would clear the move with Opel’s union. The companies’ managers “are personally meeting union leaders,” he said.
Magna plans to cut 4,100 German jobs at Opel, more than it has announced so far, Der Spiegel reported Sunday. Opel has 25,000 employees in Germany.
Also, more than 600 million euros ($875 million) of the 4.5 billion euros in German state aid planned for Opel will go to modernize the Russian car industry, Opel trustee Dirk Pfeil told the Frankfurt Allgemeine Zeiting in an interview due to be published Monday.
“That means German expertise will soon be transferred to Russia and jobs will be cut here later,” he said.
Putin told the Valdai group that it was easier for Russia to deal with well-established partners like Germany.

TITLE: Ruble Volatility Worries Central Bank
AUTHOR: Paul Abelsky
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s central bank reiterated its concern about greater ruble volatility because of uncertainty over crude oil prices as the global economy recovers.
“As the first signs of a world economic recovery emerge, the physical demand for energy resources remains moderately low, which translates into heightened risks of oil price volatility and, as a result, ruble rate volatility,” the Moscow-based central bank said Monday in a statement accompanying its decision to cut interest rates. Russia is the world’s largest energy exporter.
The currency on Monday weakened for the first time in eight days after oil for October delivery fell as much as $1.27, or 1.8 percent, to $68.02 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
Bank Rossii drained more than a third of Russia’s international reserves in the second half of 2008 to manage a 35 percent decline in the ruble as oil dropped and investors shunned riskier assets. The ruble now trades inside a 26 to 41 band that the bank has pledged to defend.
The currency target basket of dollars and euros, which is used to manage the ruble to limit swings that hurt Russian exporters, is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, and then adding them together.
The ruble exchange rate has stabilized, allowing the central bank to move closer toward its target of having a free-floating currency, Bank Rossii Chairman Sergey Ignatiev said last week. The regulator has previously vowed to abandon its currency management regime by 2011.
“Today’s statement is a warning for companies and banks to hedge their own foreign-currency risks as there may not be enough reserves to manage another devaluation,” Elina Ribakova, chief economist for Citigroup Inc. in Moscow, said by phone on Monday.
Bank Rossii’s plans for allowing the currency to be traded freely had already “virtually” happened, Alexei Ulyukayev, a central bank first deputy chairman, said in an interview with Reuters on Friday.

TITLE: In Brief
TEXT: <strong>BoNY Offers $4 Billion</strong>
MOSCOW (Bloomberg) — Bank of New York Mellon Corp. offered to lend Russia $4 billion to settle the country’s $22.5 billion money-laundering lawsuit against the bank, Kommersant reported, citing an unidentified Finance Ministry official.
BNY Mellon proposed lending Russian banks chosen by the government $400 million every six months at 250 basis points more than the London interbank offered rate, or Libor, the Moscow-based newspaper reported Monday.
Russia’s Federal Customs Service sued Bank of New York Mellon, the world’s biggest custodian of financial assets, in May 2007, accusing it of helping to transfer $7 billion out of the country illegally in the 1990s. In a U.S. investigation, the bank admitted in 2005 that it failed to report suspicious transactions and paid $14 million to end two criminal probes.

<strong>Interest Rates Reduced</strong>
MOSCOW (Bloomberg) — Russia’s central bank lowered its main interest rates by a quarter percentage point after the world’s biggest energy exporter suffered a record economic contraction and as the nation faces a slow recovery.
Bank Rossii cut the refinancing rate to 10.5 percent from 10.75 percent and lowered the repurchase rate charged on central bank loans to 9.5 percent from 9.75 percent, effective from Tuesday. The bank has cut the rates six times since April 24. It last lowered them by a quarter point on Aug. 10.

<strong>$2.4 Billion for Bonds</strong>
MOSCOW (Bloomberg) — The Russian government will allocate an additional 75 billion rubles ($2.4 billion) this year to guarantee infrastructure bonds issued by companies, Finance Ministry official Alexander Novak said during a government meeting in the Tula region Monday.
The government will allocate 100 billion rubles in the 2010 budget for such guarantees, Novak said.
Russia will also provide foreign-currency guarantees amounting to $2.5 billion this year and $3.3 billion in 2010, Novak said.

TITLE: Bankruptcy Law May Be of Little Help to Debtors
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — As State Duma lawmakers reconvened for the fall session last week, one of the top bills that they are expected to consider is the country’s first personal bankruptcy law.
Coming a year after the economic crisis rolled over Russia, it might seem high time for a law offering people relief from their debts.
But it remains unclear whether people would take advantage of such a law, with some banking analysts predicting a flood of bankruptcies and others saying the complicated procedure would discourage filings.
In addition, the legislation contains a Catch-22: Debtors can only file for bankruptcy if they owe 50,000 rubles ($1,570) or more, but to file, they must pay a fee of more than half that amount — money that they probably don’t have if they are seeking bankruptcy.
Only companies can file for bankruptcy under the current law. 
Banks that lend money to individuals cope with the lack of personal bankruptcy laws by offering their own agreements to borrowers that spell out the terms for repayments and possible default. If a client defaults, the bank also often restructures the loan at its own initiative. 
But with each bank setting its own rules, the terms of loans and restructured loans can vary wildly.
The proposed legislation, which was drafted by the Economic Development and Trade Ministry and will be submitted to the Duma this fall, aims to bring some order to the process, a ministry spokesman said by telephone.
Under the bill, a copy of which is posted on the ministry’s web site, debtors who have accumulated more than 50,000 rubles in debt and haven’t been able to make payments for the past six months could ask an arbitration court to declare them bankrupt.
The bill also allows the lender to initiate the bankruptcy procedure. 
If the court rules that the debtor is bankrupt, the debt would be restructured into manageable monthly payments or partly forgiven. 
But the court can still go after the debtor’s property to recover the debt. 
In the United States, an individual who files for bankruptcy is forgiven of his debt but usually finds it more difficult to obtain loans for the next 10 years or so. 
Debtors will be able to file for bankruptcy if they can prove that they can pay the services of a court-appointed bankruptcy commissioner for their property, the bill says.
The services of a bankruptcy commissioner cost about 28,000 rubles ($880), said Mikhail Kubasov, an aide to a bankruptcy commissioner.
Requiring a person who owes 50,000 rubles to pay more than half that amount to declare bankruptcy is a “contradiction” in the legislation, said Olga Belenkaya, a banking analyst with the Sovlink investment company.
“It may make sense to raise the minimum amount of the debt,” Belenkaya said.
The bill places no restrictions on a bankrupt debtor from taking out a new loan, but banks have blacklists of persistent nonpayers and share information with one another. 
The bill does forbid a bankrupt debtor from filing for bankruptcy more than once every five years.
Few debtors and lenders will resort to the bankruptcy legislation because “the procedure is too complicated,” said Oksana Arkhipova, deputy head of Credit Consulting, an agency that helps debtors defend their rights against debt collectors in court.
“Debtors tend to hide from lenders, while lenders find it easier to turn to court marshals,” Arkhipova said.
Kubasov, however, warned that the legislation could unleash a flood of bankruptcy filings that would swamp arbitration courts.
“They will have to pass a new law that will raise the minimum sum of the debt,” Kubasov said.
Kubasov also suggested that business executives might abuse the law to the benefit of their companies by registering themselves as guarantors of their company’s debts and using the law to write off the debts.
But the legislation could also get rid of some commonly used loopholes for evading debt payments, he said. For example, if a debtor reregistered his property in the name of a relative to avoid the confiscation of the property as part of a debt payment, the bankruptcy commissioner would be able to revoke the deal and allow for the property to be confiscated as part of the debt payment. 
Court marshals, who are responsible for collecting debt on court orders, do not have the power to annul deals on the cession of property rights, Kubasov said.
Court marshals had orders to collect 153.5 billion rubles ($5 billion) in bad bank loans as of July 1, Vedomosti reported, citing data from the Federal Court Marshals Service.
The new legislation, however, is unlikely to affect interest rates on loans, even if many people file for bankruptcy, said Mark Rubinstein, a banking analyst with the Metropol investment company. The current rates would probably remain unchanged because they are “already too high” and the number of borrowers has dropped during the crisis, he said.

TITLE: Myths Eclipse Reality
AUTHOR: By Yulia Latynina
TEXT: In an authoritarian society, public opinion surveys are meaningless. The problem isn’t so much that survey data are falsified. It’s that the results themselves do not provide an accurate reflection of reality — just as a thermometer placed outside the kitchen window cannot give you the temperature indoors. 
As soon as word of the Sayano-Shushenskaya hydroelectric plant accident became known to residents who lived downriver from the dam, most relocated immediately to higher ground. If you were to ask those people in a poll if they have faith in Prime Minister Vladimir Putin, they would surely answer positively. They are convinced that Putin brought stability to Russia, restored the power vertical and saved our citizens in South Ossetia from Georgian genocide. 
It is not that respondents lie when surveys ask for their opinions. But consciously they believe one thing, and subconsciously quite another. Consciously, they love Putin, but subconsciously they know that if the dam had burst and the Yenisei River had swept them all away, Putin, if asked by the media what had happened to the victims, would not hesitate to quip, “They sank” — just as he did in 2000 when U.S. television journalist Larry King asked Putin what happened to the Kursk submarine. 
The Sayano-Shushenskaya tragedy showed how a myth can eclipse reality. Although Spanish lord Cesare Borgia probably never slept with his sister, he did commit many other heinous offenses, so it was natural that the Italians of the 16th century tacked the incest charges onto all the other ones. After former Federal Security Service officer Alexander Litvinenko was poisoned in London, the British press started pointing their fingers at the Kremlin for virtually anyone who turned up dead on London streets.
On Jan. 9, a helicopter crashed during an illegal hunt for endangered sheep in the Altai mountains. The president’s envoy to the State Duma, Alexander Kosopkin died in the crash. Local residents’ outrage at similar hunting expeditions involving drunk public figures shooting rare animals from helicopters reached a boiling point. As a result, they developed a myth around the January accident. That version of the story holds that the hunters killed 28 endangered argali sheep and that two prostitutes were among those killed when the helicopter went down, but that their bodies were quickly shuttled away to hush up the incident. The people living in the nearby town of Kosh-Agach not only believe it, but each claim that a brother, friend or other close acquaintance witnessed the events with their own eyes.
Something similar happened following the recent accident at the Sayano-Shushenskaya plant. On Aug. 17, rescue workers displayed superhuman effort in risking their lives to save two workers who had survived in an air pocket amid the submerged rubble and alerted searchers by banging a wrench against a pipe. But by Aug. 19, nobody was talking about the brave exploits of the rescue workers. Instead, rumors were circulating that workers were still trapped in the air pockets but the authorities had called off the search. 
Myths always eclipse reality. Napoleon will often be remembered for his visit to plague-stricken troops at their barracks in Jaffa — even though it never happened. Our authorities are accused of turning their backs on men trapped in underwater air pockets, and even the brave, selfless feats of the rescuers cannot change that perception. 

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.