TODAY: Kremlin presents new budget, admits sanctions have hit hard, Putin says they violate WTO principles; Kremlin minister says Yevtushenkov arrest will hurt economy; BBC news team beaten up for investigating soldier deaths; U.S. makes new aid pledge for Ukraine; ExxonMobil halts Arctic drilling project.

The Kremlin’s new ‘fragile’ budget for 2015-2017 showed a heavy reliance on high oil prices and reserves; Prime Minister Dmitry Medvedev said the biggest challenge for the budget was the ‘uncertainty’ regarding ‘how fast [investor] trust will return’, and acknowledged that the budget had been drawn up under ‘such difficult conditions, when the slowing of our economy coincided with the sanctions imposed against some sectors of our economy’.  President Vladimir Putin says the sanctions against Russia are in violation of World Trade Organisation principles, and that Russia’s only retaliation would be to develop its domestic market – a natural ‘competitive advantage’.  The timing of Vladimir Yevtushenkov’s arrest could not be worse, says the Financial Times.  Alexei Ulyukayev, the economic development minister, was the first Kremlin official to agree, saying that the arrest ‘complicates investors’ decision-making’ and puts the current negative investment growth forecast for the year under threat.  This article speculates that Rosneft may be the one ‘maneuvering to takeover Bashneft’, the subsidiary oil company of Yevtushenkov’s Sistema.  A draft bill that would limit foreign ownership of Russian media assets to 20% will also damage the business climate, but is apparently supported in its early stages by the Kremlin.