TODAY: Surkov returns to Kremlin; rebels shell Russian embassy as Lavrov accuses West of blackmail; Ukraine attempts to assuage Russian anger and threats; Navalny supporters beaten by police, they say; pension funds to lose billions; Olympics defense measures; Greenpeace arrest.

The Kremlin has confirmed that former Deputy Prime Minister Vladislav Surkov (aka the ‘gray cardinal’) will return to office as an aide to President Vladimir Putin.  A mortar round landed inside the compound of the Russian Embassy in Damascus yesterday, as Foreign Minister Sergei Lavrov accused the West of a ‘deeply politicised approach’ to the Syria crisis.  He says the U.S. is trying to exploit the chemical weapons deal to push through a U.N. resolution that threatens force against Syrian President Bashar al-Assad.  Putin’s Syria op-ed was ‘right’, says Bruce Fein, charting a history of ‘U.S. interventions abroad with ulterior motives’.  Russia warned Ukraine that its free trade plan with the E.U. will lead to financial catastrophe and political unrest, because it ‘violates’ its friendship with Russia, who will retaliate with economic restrictions. ‘The living standard will decline dramatically … there will be chaos.’  Prime Minister Mykola Azarov tried to calm Russia’s concerns, insisting that the free trade deal would not threaten its creditor’s home market.  The BBC summarises Vladimir Putin’s performance at the Valdai Club summit.