RA’s Daily Russia News Blast – Oct. 10, 2007

Russian President Vladimir Putin shakes hands with his French counterpart Nicolas Sarkozy in his Datcha at Novo-Ogarievo near Moscow. Sarkozy urged Russia to build democracy ahead of talks with Putin on resolving East-West tensions over Iran and Kosovo. (AFP/Eric Feferberg)

The State Duma has summoned Prime Minister Viktor Zubkov to report on rising consumer prices amid reports of rising inflation, asking him “to inform the Duma about the reasons for such growth in prices for basic food products and measures being taken by the government.” A front page article in Izvestia, the newspaper owned by state-controlled Gazprom, said “Our wallets are emptying, and the government does not intend to do anything about it.” The United Russia faction representative in the State Duma, Andrey Vorobyev, has announced that a law “On Foodstuffs Security” has been drafted which will provide compensation to low-income citizens for rising food prices caused by inflation, to take effect at the beginning of next year. Support among Russian voters for United Russia rose to a record high after President Vladimir Putin announced he would run on the party’s ticket in this year’s parliamentary election. An opinion poll by VTsIOM which showed that 54% of voters plan to vote for the party. Nikolai Tokarev, the former mining engineer thought to be the next to lead state-run pipeline monopoly Transneft has “a mysterious background that suggests a stint in the KGB”. Prime Minister Zubkov said Ukraine will repay its debt of $1.2 billion by transferring gas from underground storage facilities in Ukraine owned by RosUkrEnergo to Gazprom for further export, and that the remaining debt of $929 million is to be paid by Ukrainian energy suppliers UkrGazEnergo and Naftohaz Ukrayiny. Top executives from Gazprom Neft visited Belgrade to convince Serbian leaders to sell it a majority stake in state-owned oil monopoly NIS. Bank St. Petersburg, one of the country’s leading regional banks, has announced plans for an initial public offering to boost its capital base and allow it “to further strengthen [its] capital base and support [its] ongoing expansion.” Putin has declared that there should be fewer foreigners in high-level positions at Russian companies. “In our big, leading and today already global companies, mostly in the raw materials sector, you know that the thin layer of top management is mostly made up of foreign specialists,” he said. Trade between Russia and the UK may reach an all-time high in 2007, according to Yury Fedotov, Russia’s Ambassador to the UK. Cadbury Schweppes, the world’s biggest confectionery company, has commented on Russia’s retail boom, saying it “won’t fade for years.” Rautaruukki Oyj, Finland’s biggest producer of carbon steel, is stepping up output in Russia due to the current construction boom extending to cities beyond Moscow and St. Petersburg. Putin and French President Nicolas Sarkozy have completed the first stage of talks in Moscow, with initially positive results. Some are suggesting that Sarkozy’s “tough-talking” has turned relations around, although Sarkozy’s comments indicate mutual efforts towards compromise. Regarding Iran, “our positions with Russia have come a lot closer,” and there is a “convergence of views on the status of Iranian research,” he said. Sarkozy told Putin that “France wants to be Russia’s friend,” and Putin supposedly responded with a line of Russian poetry: “One cannot understand Russia with the mind. … One can only believe in it.” The two are also expected to discuss possible collaboration between the European aerospace firm, EADS, and its Russian counterpart, UAC, on the construction of a new passenger jet, as well as the partnership between the energy giants, France’s Total and Russia’s Gazprom. US relations with Russia are looking less promising, particularly over the issues of Iran and missile defence. “We have tried to convey that our instructions from our senior leadership are to try and do everything we can to establish some basis for a cooperative approach with Russia,” said a senior US administration official involved in planning the talks this week. One analyst pointed to “Russia’s distrust of American intentions,” saying that the US “feeds Russia’s paranoia.” Ahead of high-level Russian-US talks in Moscow later this week, analysts on both sides are predicting that “upcoming presidential elections in [both] countries” will prevent much from being achieved. The leader of the Lebanese parliamentary majority has asked Russia and China to help mend a domestic political rift that could derail upcoming presidential elections. “We are asking the Russian ambassador and the Chinese ambassador to intervene in the situation to stop those who are interfering,” Saad Hariri said in an apparent reference to Syria. Russia’s chief intelligence officer, Nikolay Patrushev, says that highly trained British agents are “putting their noses into Russian politics” in a bid to influence the outcome of parliamentary and presidential elections, and that there has been an “an alarming rise in British spying activity across the Russian Federation.” Russian Prosecutor-General Yuri Chaika says that the case of Anna Politkovskaya’s murder has been solved, but that the details “remain to be seen when the trial begins.” Vladimir Kozhin, who looks after the Kremlin’s property portfolio, has called for Russia to move the embalmed body of revolutionary leader Vladimir Lenin from Moscow’s Red Square and bury him as an act of closure on Russia’s turbulent past. “We have only just moved away from revolutions, from turbulent political battles, the country wants to live normally, to work, to be rich.” Aras Agalarov, a billionaire property developer, has created a housing project for Russia’s moneyed elite – “a kind of utopian social experiment – but without poor people.”