RA’s Daily Russia News Blast – Dec. 14, 2007

Today: Russian-British relations worsen; Zhirinovsky to run for president; pharmaceutical deal could fall through due to nationalization fears; Nord Stream to hike project costs on key pipeline; Russia-US deadlock over missile defense continues.

Relations between Britain and Russia suffered another blow after Gordon Brown described President Vladimir Putin’s decision to restrict the work of the British Council in Russia as “totally unacceptable” and pointed out that the only countries that blocked the Council’s work were Burma and Iran. Foreign secretary David Milliband also commented, saying, “Russia’s threatened actions are illegal. The British Council’s presence in Russia is entirely consistent with international law, including the Vienna conventions.”

The Liberal Democratic Party has formally nominated party leader Vladimir Zhirinovsky to run for president. He said his campaign slogan would be: “You Will Answer for Everything.” Prime Minister Viktor Zubkov has publicly quizzed Finance Minister Alexei Kudrin over the disappearance of 1 billion rubles ($40.1 million) in earthquake aid to Sakhalin.One of the biggest deals on Russia’s pharmaceutical market is under the threat of disruption. German Celesio has shelved the acquisition of Protek due to fears that the pharmaceutical business will be nationalized. Komatsu, the world’s second-biggest maker of earthmoving machinery, will start its first factory in Russia to assemble excavators and forklifts by June 2010 to benefit from the country’s construction boom. Russia’s new civil nuclear energy giant, Atomenergoprom, is seeking partners so it can take part in the replacement of the UK’s ageing reactors. Nord Stream, the firm building a subsea gas pipeline from Russia to Western Europe, said that it would raise project costs next year. Analysts say they could soar by at least 60%. Nord Stream is majority-owned by Gazprom. Russians increasingly favor euros over dollars when exchanging money or withdrawing foreign currency from bank accounts, according to the Central Bank. Rosneft said it might switch crude sales from dollars to rubles as the US currency weakens, following similar statements by domestic rivals Gazprom and LUKoil. Italian Enel S.p.A. is “willing to sell” assets worth €200 million to Gazprom.Russia and Iran have settled all differences over the construction of the Bushehr nuclear power station and agreed on a timetable for its completion, according to the president of state-controlled Atomstroiexport, which is building the plant. Russian and US officials have met and exchanged information in Budapest towards breaking the deadlock over plans for an American missile defense system in Europe, but to no avail. European Union leaders “moved toward a showdown with Russia” over influence in the Balkans by pledging to chart the way to statehood for Serbia’s breakaway province of Kosovo. Russia will not provide data on its Armed Forces stipulated under the CFE treaty at an annual information exchange meeting this week. “Russia’s moratorium on its participation in the CFE treaty makes this information exchange impossible for us,” said a Russian official. The head of NATO says he has not given up on persuading Russia to reverse its decision to suspend the pact. Vietnam’s Prime Minister Nguyen Tan Dung has approved a plan to extend a Vietnamese-Russia joint venture that produces the bulk of the Southeast Asian nation’s crude oil. Nickel explorer Heron Resources has launched legal proceedings against Russian giant Norilsk Nickel in the Western Australian Supreme Court. Kommersant has been accused of misrepresenting the findings of a report by the Center for Strategic and International Studies which makes predictions about Russia’s future. The report’s author, Andrew Kuchins, says that Kommersant’s emphasis on his speculation about the possible assassination of Putin is misleading.(PHOTO: Standing in front of a map of Russia, Liberal Democratic Party leader Vladimir Zhirinovsky speaks at his nationalist and pro-Kremlin party’s congress in Moscow, Thursday, Dec. 13, 2007, which was convened to choose a contender for Russia’s March 2008 presidential vote. (AP Photo/Alexander Zemlianichenko))