Gas transit via Ukraine did not resume yesterday; mutual recriminations between Russia and Ukraine continue. The parties to the conflict are preparing to go to court while anti-Ukrainian sentiments are mounting among the victims.
The United States has slashed the refinance rate to a historical low - 0%-0.25%, the European financial authorities have cut it to 2.5%, and the Bank of England has approved a 2% rate. Japan, where the refinance rate has been traditionally low, has reduced it to zero, and China is also cutting the rate in an attempt to keep the national economy in the growth zone.
Every Wednesday starting today, Rossiiskaya Gazeta will feature the opinions of the Director of the Centre for Current Politics, Alexei Chesnakov, on the key events and problems of the week.
Director of the Priority National Projects Department Boris Kovalchuk has officially left his post after handing in his resignation. However, the delicate situation surrounding the national projects, which have not made any visible progress, suggests that Mr Kovalchuk's resignation gives him a chance to move to another job without disgrace.
The key events of 2008 - presidential elections, coercion of Georgia into peace and the world financial crisis - determined the influence of Russian politicians. Each of the three "waves of influence" strengthened the positions of one of the elites: first the politicians who cast in their lot with the new President, then the defense and security lobby (siloviki) and finally, in the autumn, the economic lobby.
Yesterday, Russian gas still did not reach consumers in Europe. Gazprom did open the valve, but Ukraine was not ready to transit gas and called the move a "provocation." The way events were unfolding looked like a farce. When the flow of gas for freezing consumers in Balkan countries was stopped at the Ukrainian border, the President of Ukraine said that his country did not block the transit. According to Naftogaz, the flow of gas through Ukraine was blocked due to the "unacceptable transit terms."
Europe is still freezing. The resumption of Russian gas supplies via Ukraine, announced for yesterday, has not taken place.
Yesterday, the Government's Presidium held its first meeting in 2009. The Presidium approved the cabinet's agenda for the first six months of 2009, discussed a range of current issues, including the gas dispute with Ukraine, and adopted an important decision to set up a state agricultural corporation - a national grain company. It will incorporate not only the state grain producers, but also the largest private grain producers and traders.
Prime Minister Vladimir Putin has announced Russia's intentions in the current gas conflict with Ukraine. In a Sunday interview with the German television network ARD, Mr Putin advised Europe to lend money to Kiev for payments to Gazprom and soften its position on the construction of alternative pipelines. He expressed Russia's readiness to take part in operating and privatising Ukraine's gas transportation network. However, experts believe that Kiev is not prepared to lose control over this network under any conditions whatsoever.
Russia has announced the end of the gas war with Ukraine, promising to resume gas export to Europe at 10 a.m. Moscow time today. By 16:00 on Wednesday, gas should start flowing out of Ukraine. However, the conflict is far from settled. Gazprom threatens to cut off transit if Ukraine continues to siphon off gas for technical needs. Kiev does not conceal that it would do so.
Starting January 16, a new website will become available for Russian internet users - "Employment in Russia." Minister of Healthcare and Social Development Tatyana Golikova reported the news to Prime Minister Putin at yesterday's meeting of the Government's Presidium.
The presidium of the United Russia parliamentary party instructed the Duma Rules Committee yesterday to develop regulations on the special procedure of holding the Government Hour while the Prime Minister is in attendance. His address is envisaged under presidential amendments to the Constitution.
Putin will deliver his address at the usual time though in a different capacity. The State Duma is changing its format of communication with officials. The heads of state-owned corporations will now also be invited to answer questions during Government Hours. In a departure from tradition, the Prime Minister will address Parliament in the spring.
A three-hour "Conversation with Vladimir Putin" was broadcast live for free, Rossiya TV Channel told the Communist Party, which then responded by demanding free air time for its own leader as well.
President Dmitry Medvedev told the federal government last night not to apply the gas transit protocol signed by Ukraine until the Ukrainian side retrieves its reservations to it. The protocol concerns international monitoring of the flow of Russian gas across Ukraine to Europe.
As the new year began, civilian staff of the Irkutsk Aviation Engineering Military Institute and some of the students' parents held a hunger strike to protest its closure. But the protest proved of no avail. The oldest and only aviation institute east of the Urals was closed down and is now being transported by military planes to Voronezh. Few at the institute suspected such a development only six weeks ago. But things moved with lightning speed.
President Medvedev expressed dissatisfaction yesterday with the Government's performance. According to the President, anti-recessionary measures are being applied more slowly than necessary, and the tasks with which he commissioned the Government last autumn have only been a third completed. The Kremlin argues that it is not at odds with the Government House. Meanwhile, Prime Minister Putin is criticising officials for the same failures.
The gas dispute between Russia and Ukraine is continuing. Yesterday, Ukraine signed the protocol on control over Russian gas transits to Europe. The international observers have already left for the gas measuring stations. It turned out, however, that Ukraine had added clauses to the protocol, causing Russia's indignation. Moscow decided to declare the document void.
According to the well-known universal law of Central Election Commission Chairman Vladimir Churov, Prime Minister Putin is always right. But does this axiom hold during a global economic crisis?
When the gas crisis was at its peak, Prime Minister Vladimir Putin met with foreign journalists to explain to them the Russian position once again. Izvestia quotes the most interesting parts of his interview.
After several days of persuasion, Ukraine agreed to give international monitors access to its gas pipelines. Now experts from Russia, Ukraine, Europe and independent companies will be able to know how much gas Gazprom moved to Ukraine and how much gas reached the European buyers. This is our first victory in the "gas war", and is in fact the first time in history that Ukraine has made such a concession. At stake are billions of dollars, because Kiev not only stole gas but probably sold the gas it bought from Russia at a discount price, charging market prices that are twice as high. However, things were not that straightforward; even the framework Rules of the Monitoring of the Transit of Natural Gas through Ukraine signed by Russia differ markedly from the document signed by Ukrainian Prime Minister Yulia Tymoshenko. Izvestia has tried to pinpoint the differences.
Government launches targeted support of companies, regions.
Resuming gas transit through Ukraine postponed again as Russia admits interest in transit pipeline
On January 1, 2009, Prime Minister Vladimir Putin, who had been personally in charge of Russia's actions in the Russian-Ukrainian gas dispute from late December, approved the first "conciliation" document, i.e., a protocol establishing a multilateral commission to monitor gas flow at facilities in Russia, Ukraine and the European Union. If a Ukrainian representative signs this protocol today, Gazprom could resume gas supplies to EU countries as early as tomorrow. Supplies were disrupted on January 7, 2009. The gas conflict could now return to its previous format: an information war.
On December 24, 2008, Gazprom, in the course of its negotiations with a Naftogaz of Ukraine delegation arriving in Moscow, demanded that Ukraine pay the $2.118 billion it owed for gas supplies in 2008 before signing a contract for 2009.
A wave of protests against car import duty hikes rocked Russian regions on January 8 and 10. Protesters also called for the Putin government's resignation and for a check to rising housing and utilities prices. Political parties and other movements joined in the car owners' protests, which predictably led to occasional arrests of the most fervent activists. Opposition sources warn that protests will scale up in January, with political slogans added to economic slogans.
Russia has started 2009 with another gas war. The results of the campaign are as follows: Ukraine is left without gas, Russia without gas transit, and both countries are quickly ruining their reputation in the face of freezing Europe.
Participants in the Russian-Ukrainian gas conflict admitted its policy-induced nature. Members of the Ukrainian President's team believe that Prime Minister Yulia Tymoshenko has sided with Moscow, and the conflict is playing into her hands.
"The world will face a global financial crisis when the 44th president comes to office (George W. Bush is the 43rd), and the crisis will reach its peak in 2012, first in the US, and then in Europe." These forecasts by astrologer Pavel Globa were made several years ago (see Komsomolskaya Pravda, September 14, 2001, December 20, 2007, at www.kp.ru). But no one listened to his discouraging stories. The idea of America's collapse and the prediction that it would be ranked 20th not first, seemed seditious. But it turned out that the stars were right. So what do they say about today's world?
"The world will face a global financial crisis when the 44th president comes to office (George W. Bush is the 43rd), and the crisis will reach its peak in 2012, first in the US, and then in Europe." These forecasts by astrologer Pavel Globa were made several years ago (see Komsomolskaya Pravda, September 14, 2001, December 20, 2007, at www.kp.ru). But no one listened to his discouraging stories. The idea of America's collapse and the prediction that it would be ranked 20th not first, seemed seditious. But it turned out that the stars were right. So what do they say about today's world?
1. The Name of Russia, TV project. It was not only the most intellectual talk show of the year, but also a successful, highly-rated attempt to draw the audience's attention to its own history. The Rossiya channel has proved that television can be serous, interesting and socially useful at the same time.
The Government summed up the results of 2008. Deputy Prime Minister and Finance Minister Alexei Kudrin said the other day that, owing to the crisis, the situation was extremely difficult and that 2009 would become the most difficult post-war year. Nevertheless, Prime Minister Vladimir Putin remarked optimistically that the Russian economy was in the black.
Dmitry Medvedev and Vladimir Putin summarise the year.
The structure of supreme power in modern Russia can be described as a "tandem," a term the Kremlin likes more than "diarchy." So far, both leaders have been satisfied with their interaction.
Dmitry Medvedev has accomplished a lot in the six months since his election. But his highest profile move was a "technical" correction of the Constitution.
In 2008, two major construction projects began in Primorye: a bridge across the strait of Bosfor Vostochny to the Island of Russky, the 2012 APEC summit venue, and a bridge across the bay of Zolotoi Rog, built in the framework of the federal programme for regional development.
For the first time in Russian history a head of state not only stayed in the Government after completing his term, but also became a Prime Minister, the number two person in the Government hierarchy. Mr Putin's transition is hardly proving seamless. The financial crisis has dashed any possible hopes for a calm tenure. In addition, not all the measures taken by the Prime Minister seem to be working.
On May 31, Russia won the right to host the Summer Universiade for the first time in 30 years. Students between 17 and 28 years of age from 141 countries will take part in this sporting event, considered to be second in importance only to the Olympic Games. The Summer Universiade consists of 12 compulsory sports and up to three optional sports chosen by the host country. The Summer Universiade 2013 will be held in Kazan, the capital of Russia's Republic of Tatarstan.
Members of United Russia are meeting the New Year with concern and hope. They are primarily pinning their hopes on their leader Vladimir Putin. They have been trying to entice him to join United Russia throughout its history. In 2007, Putin described his special relationship with the party, though he officially aligned himself with United Russia only upon expiration of his presidential powers. The Prime Minister's leadership proved to be the water of life for the party, which has enabled it to keep its ratings at 60%.
Boston Globe: "During the autumn campaign, Joe Biden ruminated aloud about a foreign policy challenge that a President Obama would have to confront early on." This challenge came even earlier than he had thought. To check Barack Obama's intentions, and probably even his boldness, Russia has declared its intention to complete the sale of modern air defence systems to Iran. This deal was launched and suspended several times
According to the Russian Prime Minister, the future gas price is becoming a key issue for the Russian economy. The fact that Vladimir Putin deemed it necessary to point to the end of "an era of cheap gas" when addressing the 7th ministerial meeting of the Gas Exporting Countries Forum largely testifies to the alarmist mood in the government. The thing is that while gas prices are tied to oil prices, albeit indirectly, gas prices will fall following a landslide of oil prices, even if not right away.
On December 27, the New York Times urged the new President to improve relations with Russia, publishing an editorial titled "Mr Obama and Mr Putin". As is clear from the title, the article advises Mr Obama to deal with Prime Minister Putin rather than President Dmitry Medvedev.
The outgoing Year of the Rat, according to the Chinese Zodiac, was generally considered worse than any other leap year. As for the upcoming Year of the Ox, political astrologists say it will be even worse. The Russian elite has never been so pessimistic in the last 15 years. Russia remains hostage to the West even after Putin and Medvedev threw down the gauntlet to it. What is an economic chill to Europe and the United States is a bad flu to Russia.
Prime Minister Vladimir Putin revisited his native city to see trains and paintings and listen to music.
On December 24, the Japanese Government supported motorists in Russia's Far East and called on the Russian Government to abolish its resolution on raising car-import duties. The Japanese Foreign Ministry said this decision ran counter to free-trade principles and could complicate Russia's accession to the World Trade Organisation (WTO).
The presidential amendments to the Constitution, including bolstering Parliament's control over the Government, will be enacted in mid-January. Yesterday corresponding alterations to Duma regulations were introduced in the lower chamber. Incumbent MPs could have used their new right in February or March, had they adopted this initiative before the new year. But the MPs seem unwilling to expand their authority. Clearly, during the next half a year the format of the lower chamber's dialogue with the Cabinet will remain unchanged. The most important point is that the document lacks a provision about the necessity for the Prime Minister to report to the Duma.
Having started overseas last August, the crisis reached Russia this autumn, and hit it much stronger. In the West, it took the crisis almost a year to move from the virtual economy and finances into production, whereas here it turned from a financial disaster into an economic one within a couple of months, paralysing entire industries.
Vladimir Putin kept the promise he made to Dima Rogachev, a boy who was sick with leukaemia. About three years ago, 10-year-old Dima wrote a letter to Putin, saying, "Come and have tea and pancakes with me". Putin came to meet the boy and promised to build a state-of-the-art medical centre in Moscow.
Yesterday Russia's State Council and Security Council members convened for a meeting. It was announced that the meeting's major aim would be reviewing relations with the CIS, but Kommersant special correspondent Andrei Kolesnikov found out that in fact the gathering, which both President Dmitry Medvedev and Prime Minister Vladimir Putin attended, focused on measures to counter the crisis, whose scale the Government seems to have underestimated.
The gold-mining sector is asking Vladimir Putin for help.