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Wednesday, July 08, 2009

Belarus aims for both Customs Union, EU free trade; US-Russia, Free visas, Economy, Iceland, Azerbaijan, Opposition, Sport, Culture and Polish scandal

  • From the Top...
  • #425

    Belarus aims for both Customs Union, EU free trade

    From: BelTA
    Interview to the Austrian newspaper Die Presse
    Belarus is interested in being part of the Customs Union together with Russia and Kazakhstan as well as part of the free trade zone together with the European Union. President of Belarus Alexander Lukashenko made the statement in an interview with the Austrian newspaper Die Presse on 6 July.

    “Time is the priority for us. We will never reject the Customs Union because it is advantageous for us. But we won’t turn down being part of the EU free trade zone if we are offered the possibility tomorrow. We could use it,” stressed Alexander Lukashenko.

    The President added: “We prioritize what we can implement earlier. If the Customs Union starts operating in 2010, it will become our priority. Whether there will be a free trade zone of Belarus, Ukraine and the European Union or not we don’t know yet. It is only talks so far. It would be good if we set up the Customs Union together with Kazakhstan and Russia, it will be very profitable for us. If we manage it, we will be joining the WTO together, too. Naturally it would be very advantageous if we create a free trade zone with the European Union”.

    During the interview Alexander Lukashenko was asked over 20 questions about Belarus’ interest in the Eastern Partnership, the country’s relations with the Russian Federation, cooperation with the European Union, privatization processes in the country as well as other topical matters.

  • Other Belarusian News...

    Belarus welcomes US-Russia decision to reduce strategic offensive arms

    From: BelTA
    Belarus welcomes a new commitment of the presidents of Russia and the United States to reduce strategic offensive arms and to work towards a replacement pact for the START arms control agreement, Press Secretary of the Belarusian Foreign Ministry Andrei Popov told reporters commenting on the Russia-US summit in Moscow on 6 July, BelTA has learnt.

    “The current START agreement has definitely played a major part in strengthening strategic security and stability. I would like to underline that, in our opinion, the implementation of this agreement became possible only due to the collective efforts of all the signatories to the treaty,” Andrei Popov said.

    According to him, being START participant, Belarus has made a considerable and fundamental contribution to the nuclear disarmament and non-proliferation by its rejection of the nuclear arms it possessed.

    Andrei Popov said that Belarus “would welcome the prompt practical realization of the Russia-US declaration signed in Moscow on 6 July that would dismiss all the doubts about the irreversibility of the nuclear disarmament.” “We are convinced that the success of the new agreement will in large part depend on the readiness to cooperate with the states that shared the responsibility for maintaining strategic stability and on Russia-US commitment to guarantee the security of these states,” he added.
    A reminder, President of the United States Barack Obama and Russian President Dmitry Medvedev signed a preliminary agreement meant as a guide for negotiators as the nations work toward a replacement pact for the START arms control agreement. The joint understanding also commits the countries to lower longer-range missiles for delivering nuclear bombs to between 500 and 1,100. The limit for warheads would be in a range of 1,500 to 1,675 each.

    The 1991 Strategic Arms Reduction Treaty, or START, led each country to cut its nuclear warheads to about 6,000. The 2002 Treaty of Moscow called for further cuts to between 1,700 and 2,200 operationally deployed warheads by 2012.

    Apart from that, US and Russian experts will carry out a joint analysis of ballistic missile threats of the 21st century.

    Under the document signed in Moscow, the new agreement is to be concluded in the near future.

    Belarus’ open relations with Europe improve contacts with OSCE PA

    From: BelTA
    Belarus’ cooperation within the OSCE PA framework is advancing onto a quality new level thanks to the establishment of more open relations with Europe, said Claudio D'Amico, member of the Chamber of Deputies of the Italian parliament, member of the OSCE Parliamentary Assembly’s Working Group on Belarus, at a meeting at the House of Representatives of the National Assembly of Belarus on 6 July.

    Claudio D'Amico was satisfied with the fact that Europe has become more open towards Belarus. “A decision has been made to arrange a special meeting of parliamentarians and discuss new aspects of cooperation within the OSCE PA framework which are related to the revitalized dialogue between Belarus and Europe,” said the politician.

    Claudio D'Amico also said that the Italian parliament has nearly completed setting up the so-called group of friendship with the National Assembly of Belarus. The group comprises deputies and senators. “Only some technicalities need to be addressed and in several days the group membership will be approved,” he stated. Claudio D'Amico has already been instated as the chairman of the group. He has undertaken to make cooperation with Belarus one of priority matters for the Italian parliament.

    Claudio D'Amico remarked that Belarus and Italy have always maintained friendly relations. “Their angle changed for the better after the President of Belarus visited Italy,” added the Italian parliamentarian. He also invited Belarusian MPs to visit Italy.

    Sergei Maskevich, Chairman of the International Affairs and CIS Relations Commission of the House of Representatives, remarked that the National Assembly had already set up a working group for cooperation with the Italian parliament. In his opinion, there is a large potential for building up the interparliamentary relations. Parliamentarians intend to put efforts into improving political, trade and economic relations between Belarus and Italy and the establishment of mutually beneficial contacts between business circles.

    Last year Italy solidly secured its eighth position in Belarus’ top ten trade partners. In 2008 the bilateral trade totalled $1.2 billion, 45% up on 2007.

    Free visas to Belarus to benefit national economy

    From: BelTA
    The abolition of visas for foreign tourists coming to Belarus will benefit the country’s economy, Sports and Tourism Minister Oleg Kachan said at a session of the Board of the Council of Ministers on 7 July. The session discussed the implementation of the national tourism development programme for 2008-2010.

    “Together with the Belarusian Foreign Ministry we are considering the abolition of visas for the EU citizens entering Belarus,” Oleg Kachan said.

    Each foreign tourist coming to Belarus spends about EUR200 here, of which EUR60 is the cost of the visa. Of course, there are tourists who will come to Belarus irrespective of the visa cost; these people can spend much money here provided they are happy with service. But for an average tourist EUR60 for the entry visa is too much, the minister said. This factor somewhat restrains the inflow of tourists to Belarus.

    The Board of the Council of Ministers pointed out to the lack of hotels, especially in the regional centres and small towns. This is the reason why tourists opt to stay in Minsk coming to small towns only for one day. At present there are 27 hotels in Minsk, eight are being designed. Their occupancy rate is 60%.

    First Deputy Prime Minister Vladimir Semashko noted that Belarus will have to provide accommodation to several hundreds of thousand tourists who are expected to come for 2014 ice hockey world championship.

    Chairman of the Council of the Republic Boris Batura thinks that large hotel chain operators should be involved in order to increase the occupancy rate of Minsk hotels. The construction of hotels of famous brands will help attract more tourists to Belarus.

  • Cultural Scene...

    BBC to tell about Slavonic Bazaar in Vitebsk

    From: BelTA
    BBC reporters intend to give coverage to the international arts festival Slavonic Bazaar in Vitebsk. Representatives of BBC have been accredited to the Vitebsk festival for the first time, BelTA learnt from the mass media and foreign ties department of the Belarus Information Ministry.

    All in all, around 600 representatives from Belarus, Russia, Ukraine, Moldova, Lithuania, Latvia, Great Britain, the USA, Germany, China and Macedonia are expected to visit Vitebsk during the festival.

    A team of Belarusian journalists will be the biggest one. They will represent more than 70 national and regional periodicals, national TV and radio channels and news agencies including BelTA News Agency, The Belarus National TV and Radio Company, ONT and STV channels, newspapers Zvyazda, Respublika, Litaratura i Mastatstva and others.

    The Russian mass media will be represented by leading central and regional periodicals, TV and radio companies including ITAR-TASS, Russia TV Channel, newspapers Rossijskaya Gazeta, Izvestia, Literaturnaya Gazeta, Trud and others.

    During the festival, the Belarus-Russia Union State will be represented by the Union State Magazine, the Soyuznoe Veche Newspaper and the TV and Radio Company of the Belarus-Russia Union State.

  • Economics...

    Belarus’ gold and foreign exchange reserves 13.5% down in January-June

    From: BelTA
    In January-June 2009 Belarus’ gold and foreign exchange reserves calculated using IMF methods shrank by 13.5% ($414.4 million) to a total of $2,646.7 million. The reserves went down by 18.3% in June alone, BelTA learnt from the Information Office of the National Bank of the Republic of Belarus (NBRB).

    In line with the methods used by the International Monetary Fund, Belarus’ international reserves are defined as marketable foreign assets, which consist of monetary gold, the country’s special drawing rights in the IMF, the country’s reserve position in the IMF and foreign currency reserves. The reserve assets can be promptly used for money market interventions in order to stabilize the exchange rate of the national currency, to finance the import of goods and services by the government, for paying and servicing the foreign national debt and for other purposes.

    In January-June 2009 Belarus’ international reserve assets calculated using national methods decreased by $560.6 million (15.3%) to $3,101.6 million. In June the reserves shrank by 15.5%, or $566.8 million.

    As of 1 July hard currency accounted for the larger part of the international reserve assets of Belarus ($2,108.7 million, or 68%) along with precious metals and gems ($910.4 million, or 29.4%). In January-June the hard currency assets went down by 24.1%, while the volume of precious metals and gems increased by 13.5%. Other assets amounted to $82.5 million, or 2.6%.

    BelTA reported earlier that the NBRB expects the country’s gold and foreign currency reserves to reach $5,870-7,750 million in 2009.

    Belarusbank to raise $200mn in foreign loans in H2

    Belarusbank plans to attract at least $200 million worth of loans from foreign financial institutions in the next six months, Chairperson of the Board of Belarusbank Nadezhda Ermakova told reporters on 7 July.

    In H1 Belarusbank concluded 20 loan agreements with foreign banks to the total amount of $150 million. These funds have not been fully utilized yet.

    Another 30 projects at the total amount of $400 million are in progress. “It is unclear whether all these projects would be adopted. But I think we will undoubtedly attract at least $200 millions more,” said Nadezhda Ermakova.

    Speaking on the cost of the borrowings, Nadezhda Ermakova said that the loans have become more expensive by 2-3% this year.

  • From the Foriegn Press...

    Belarusian Embassy in Estonia to open in autumn

    From: NLIPRB
    The Belarusian embassy in the Republic of Estonia is scheduled to open in September and the Estonian diplomatic mission in Minsk will be inaugurated in autumn too, Vladimir Velman, the head of the Estonian parliamentary group for relations with Belarus, said when speaking in the House of Representatives of the National Assembly of Belarus. The Estonian guests are now in Minsk on an official visit.

    The Belarusian-Estonian relations have started improving. “We observe a warming in bilateral contacts, which is a logical continuation of general European trends, which Belarus got involved into,” Vladimir Velman said.

    The Estonian guest noted that “the Parliament of Estonia is open to any dialogue”. The State Assembly of Estonia set up a group of friendship with the National Assembly of Belarus this winter. According to Vladimir Velman, there is a mutual interest in strengthening the cooperation. “It is high time we developed the official inter-parliamentary relations in order to change them into informal contacts in the future,” said the Estonian politician.

    Inter-parliamentary relations have a positive influence on economic cooperation between the two countries and promote a certain level of trust, said Sergei Maskevich, the Chairman of the Permanent Commission for International Affairs and Ties with CIS of the House of Representatives of the National Assembly of the Republic of Belarus. “There are many companies in Belarus with the Estonian capital today. But big opportunities in this field still remain untapped,” said Sergei Maskevich.

    Estonia has made a number of specific steps, which has created a background for intensifying the political dialogue. The Foreign Minister of Estonia is scheduled to visit Minsk this autumn.

    Fitch Comments on Belinvestbank Outlook Change

    From: Easy Bourse
    Fitch Ratings' Outlook revision of Belarus-based Belinvestbank's (BIB) B- Long-term Issue Default Rating (IDR) to Negative from Stable formed part of a more general review of Belarusian state banks. This review took into account the heightened risks stemming form the weaker outlook for Belarusian sovereign finances and the Belarusian economy (for details see the commentary dated 7 July 2009 "Fitch Revises Four Belarusian State-Owned Banks' Outlooks to Negative"). A full list of BIB's ratings is provided at the end of this release.

    BIB's Long-term and Short-term IDRs are underpinned by potential support from the Belarusian authorities, given its state ownership, its policy role in supporting the manufacturing sector and significant systemic importance. The Negative Outlook on BIB, as for three other state-owned banks, reflects the weakening ability of the Belarusian authorities to support the banking system, in case of need.
    BIB's Individual Rating of 'D/E' reflects the risks arising from the bank's considerable share of foreign currency (FX) loans and relatively high borrower concentrations, as well as the bank's moderate loss absorption capacity. However, it also considers the currently reasonable liquidity position. Fitch notes the potential for a marked deterioration in the BIB's stand-alone financial profile in case of a sharp economic downturn, reduced state support for the manufacturing sector and/or a further marked depreciation of the Belarusian Ruble (BYR).

    Tier 1 and total regulatory capital ratios were 11.3% and 15.6%, respectively, at end-May 2009. Fitch's estimates that at end-May 2009 the bank could have raised the ratio of impairment reserves/loans to 12% (from the current 1.8%), before capital ratios would have fallen to the regulatory minimum, absent any further BYR devaluation. Fitch notes that BIB's loss absorption capacity would be further reduced in case of significant BYR devaluation given the bank's high share of FX loans (38% at end-May 2009).

    Reported non-performing loans (NPLs -loans overdue by more than 90 days) made up a still-low 0.5% of the loan book at end-May 2009 (0.3% at end-2008). Although NPLs are fully covered by reserves, the considerable share of FX loans, significant borrower concentrations (the largest 20 borrowers accounted for 26% of the loan book at end-Q109) and the high dependence of asset quality on the health of the state-owned corporate sector are viewed as weaknesses in the current environment.

    The liquidity position is currently reasonable with cash, securities and interbank placements accounting for 21% of BIB's assets at end-May 2009.

    BIB is the fifth largest bank in Belarus, primarily focused on serving corporates and participating in state lending programmes. At end-Q109, the bank held 6.8% of system assets, a 5.5% market share in retail deposits and a 6.2% market share in corporate lending. The largest shareholders of BIB are the state property committee (86.2% of equity), and the National Bank of the Republic of Belarus (6.5%).

    Rating actions:-Long-term IDR: affirmed at 'B-' ; Outlook changed to Negative from Stable -Short-term IDR: affirmed at 'B' -Support rating: affirmed at '5' -Individual rating: affirmed at 'D/E' -Support Rating Floor: affirmed at 'B-' (B minus)

    Azerbaijan President receives Prime Minister of Belarus

    From: Trend.AZ
    On July 7, the President of Azerbaijan Ilham Aliyev received Prime Minister of Belarus Sergei Sidorsky, AzerTAj state news agency reported.

    The Azerbaijani leader expressed satisfaction at the current level of bilateral relations. President Ilham Aliyev pointed out both countries wish to further boost their overall cooperation.

    The Head of State praised the level of industrial cooperation, noting "this experience should be applied in other fields as well".

    The President also expressed belief the visit of the Belarusian Premier will contribute to further
    deepening the relations.
    Sergei Sidorsky extended greetings of Belarus President Alexander Lukashenko to the Azerbaijani leader.

    The Belarusian Premier said relations between the two countries "are successfully developing thanks to a right policy set by the two presidents".

    President Ilham Aliyev asked the Prime Minister to convey his greetings to President Alexander Lukashenko.

    Icelanders look into investments in Belarus

    From: Ice News
    A group of Icelandic businessmen from five companies in Iceland traveled to Belarus to research and learn more about possible investments in the country. The trip was sponsered by the Trade Council of Iceland but also received assistance from the Business Council in Minsk, the capital of Belarus.

    The companies that were represented by the businessmen traveling in Belarus were Iceland Seafood, Skinney-Thinganes, Loftleidir (division of Icelandair), MP-Banki, and Kleros which is an investment group in Moscow from Ingolfur Skulason.

    Thorleifur Thor Jonsson, manager and curator of the new market at the Trade Council of Iceland, accompanied the group to Belarus. He says that he was very satisfied about this oppurtunity to get to know about the country and to see what Belarus has to offer.

    According to the Belarusian Telegraph Agency, Finland and Bosnia and Herzegovina also are showing interest in cooperation with privatization of Belarusian state-owned companies. The Belarusian Sci-Industrial Association is going to sign agreements with the Iceland Trading Council.

    “It was not so that trade contracts were signed before or during this trip, however, we sell them fish which they continue selling and distributing throughout the east,” says Thorleifur.

    Belarus, just like Iceland, is receiving assistance from the International Monetary Fund, although the country did not suffer as harsh of a crisis as other nations in Europe. Thorleifur Thor says that there is a good outlook for the economy in Belarus and that it is possible to find good investment oppurtunities in the future.

  • From the Opposition...

    Belarusian MFA denied registration to Belsat TV

    From: Charter '97
    The Ministry of Foreign Affairs said one more document is needed to register Belsat TV channel.

    Belsat director Agnieszka Romaszewska told this to the press service of the Belarusian Association of Journalists.

    According to her, Belsat addressed the Ministry of Foreign Affairs on registration issue for the second time about a month ago.

    “The documents were accepted, they said a week ago that they were being considered, everything was all right,” Agnieszka Romaszewska told. “At the end of last week, we received a letter from the MFA saying they didn’t find a regulation on a news office, though we had given it in the packet of documents. We can send it again, if it is lost.”

    Belsat applied the MFA for registration of the channel as a representative office of Telewizja Polska (TVP) in Belarus for the first time on December 20, 2008.

    The MFA suspended studying the documents in February referring to the fact the documents were filled incorrectly.

    “Considering opening a news office of Belsat TV channel in Belarus may be resumed after all remarks mentioned are corrected,” the notice of February 16 signed by deputy minister Valery Varanetski said.

    “We only see that they drag on the process. But it could be forecasted,” Agnieszka Romaszewska noted commenting on the second remark of the Belarusian MFA.

    BELARUSIAN LIBERALIZATION: you distribute anti-crisis program, we fine you

    From: Viasna
    Judge of Leninski district court of Hrodna A.Bialinski fined the members of Hrodna branch of the Young Front Yauhen Hatalski and Yauhen Shvaba 175 000 rubles for distribution of leaflets with anti-crisis program.

    Raman Shvaba commented: ‘Our case was considered for about 15 minutes only. The policemen who acted as witnesses were not those who had detained us. I said that there were thousands of advertisement leaflets posted all around the city and nobody was ever detained for it. The judge started giving a lecture. He said that I’d rater helped in cleansing the streets and taking care after war veterans. He also said that we should expect letter to the places of study.’

    ‘At first, when we were detained, the police did not consider these leaflets as political, because there were just pieces of advice on overcoming the difficulties that were connected to the crisis. However, the higher instances started making accent on politics. We were taken to the police station and fingerprinted. Then we were released, but were told to expect writs to court,’ said the Young Front member Yauhen Hatalski.

    Recently Mr. Hatalski had a talk with the administration of his polytechnic. The talk took place with participation of representatives of the local ‘ideological vertical’, the KGB and the administration of the educational establishment. The student was warned about the possibility of expulsion and that the final decision on this issue would be taken by the appropriate commission in August.

    The leaflet included the following anti-crisis proposals:

    1. Economy – during the crisis the state and the local authorities should cut the unnecessary expenses (on ice palaces, nuclear power stations, agrarian settlements, security services, Stalin’s lines, pompous state celebrations, etc.).
    2. Charity – during the crisis more wealthy Belarusians have the opportunity to help the poor, children, disabled and orphans.

    3. Liberalization – decrease of taxes, freeing the business initiative, reduction of bureaucracy and guarantees of the immunity of personal assets.

  • Around the Region...

    Russia still wishes to enter into WTO – Medvedev

    From: Itar Tass
    Russia still intends to enter into the World Trade Organization (WTO) despite its decision to do that within the tripartite customs union, President Dmitry Medvedev said at the Russian-American business forum on Tuesday.

    Medvedev said he had discussed practical issues with U.S. President Barack Obama. “The president asked me whether Russia planned to enter into the WTO. I said once again that we would do that with due account of earlier achievements,” he said.

    “We plan to enter into the WTO with due account of earlier agreements. We want to lose nothing of what we have done. True, it was a long road, 16 years. To be frank, we are tired. Hopefully, the recent reconfiguration of the accession format will help us achieve the goal more quickly,” he said.

    Russian Economic Development Minister Elvira Nabiullina also confirmed the Russian intention to join the WTO. She said that Russia intended to make rapid progress and had adjusted to WTO principles.

    It was announced after the Moscow meeting of the Eurasian Economic Community (EurAsEC) Interstate Council in early June that Russia, Belarus and Kazakhstan would join the WTO together as a tripartite customs union and individual accession negotiations would stop.

    Russian, American businessmen discuss ways to reset bilateral relations

    From: Itar Tass
    The Russian-American business forum held in Moscow on Tuesday discussed ways to reset bilateral relations.

    The forum was organized by the Russian Union of Industrialists and Entrepreneurs (RUIE) and the U.S. Chamber of Commerce.

    It is time to use the potential of the bilateral relations, U.S. Secretary of Commerce Gary Locke said.

    The Jackson-Vanik amendment must be cancelled in order to spur on bilateral trade, RUIE President Alexander Shokhin said. The amendment adopted in 1974 applied to U.S. trade with socialist countries hampering the emigration of Jews and other citizens.

    The protracted accession of Russia to the World Trade Organization (WTO) is another impediment, he said.

    Russia and Israel lifted visa formalities this year, Shokhin said. “If the cancellation of the Jackson-Vanik amendment requires abolition of visa formalities with the United States, Russian businessmen are ready for that,” he said.

    As for the forming customs union of Russia, Belarus and Kazakhstan, Shokhin said, “it would be better for the customs union to join the WTO on terms coordinated by Russia.”

    “Russia still seeks the soonest admission to the WTO,” Economic Development Minister Elvira Nabiullina said at the forum. “The Russian Federation has long been living by WTO main rules and norms,” the minister said. She disagreed with claims of Russia’s allegedly protectionist policy. “The only protectionism in Russia is tariffs, and there are positive trends in that area, as well. Anti-crisis protectionism is multifaceted, and it frequently exceeds the limits of such respected organizations as the WTO,” he said.

    Locke supported the Russian entry into the WTO but did not say his support extended to the customs union.

    Plentiful natural and human resources and a vast consumer market are appealing to investors, American participants in the forum said. U.S. amassed investments in Russia near $3 billion, but this is not enough, the forum delegates said.

    Nabiullina said they should involve small and medium business in the bilateral cooperation. “Obviously, we pin certain hopes on small and medium business. A number of measures have been taken in its support. We think that this business will add to the potential of the bilateral relations,” she said.

    U.S-Russia Relations "Reset" to be Tricky

    From: CBS
    President Barack Obama, left, meets with Russian President Dmitry Medvedev Tuesday, July 7, 2009, in Moscow
    President Barack Obama’s efforts to "reset" relations with Russia were in full view Monday in his joint news conference with Russian President Dmitri Medvedev - but if their first summit is any indication, the two leaders are going to have to hit control-alt-delete a few more times.

    Obama, admittedly, faces a daunting task. On top of 50 years of icy Cold War mistrust, he has to deal with the aftermath of high-level U.S.-Russia turbulence during the Bush years, a period that began with the former U.S. president adoringly gazing into Vladimir Putin’s soul and ended with the Russians furious over the Iraq war, missile defense and a general feeling from Washington that Moscow didn’t much matter in the neoconservative view of the cosmos.

    Add to that the ongoing high-wire act that U.S. officials have to walk between engaging Russia and expressing alarm at its increasingly authoritarian character, and even the immensely charismatic Obama couldn’t wave a wand and magically change the mood no matter how hard he seemed to be trying on the grand stage at the Kremlin.

    The biggest achievement touted from the summit - and the only document the two men signed - was a nonbinding “joint understanding” setting target ranges for a new round of nuclear arms reductions.

    But a look at the fine print shows the deal is less than meets the eye, experts said. The two presidents punted on how to count total weapons or total warheads - a crucial detail in the mathematics of arms reductions. And they committed in writing only to finish the deal “at the earliest possible date,” though Obama said it would be done by year’s end, when the current Strategic Arms Reduction Treaty expires.

    “It’s small progress. There are key issues being kicked down the road,” said John Isaacs of the Center for Arms Control and Non-Proliferation. “There are a lot of details still to be worked out - a lot of devils still to go.”

    Isaacs also said he was troubled to hear of another fact the two presidents did not highlight: The framework reductions would take place over a seven-year period once the final treaty is done and ratified. “I don’t know why it would take seven years,” he said.

    Another expert, Lisbeth Gronlund of the Union of Concerned Scientists, said the framework language dropping the number of permitted nuclear delivery vehicles to between 500 and 1,100 showed that the two leaders were making only modest progress.

    “Things aren’t going all that well. Otherwise there wouldn’t be this big gap between 500 and 1,100,” Gronlund said. “I don’t know what audience the two presidents are speaking to.”

    If the deal seemed a bit rushed to coincide with the summit, the pressure to put hard numbers on the arms reductions actually came from the American side - a sign that of the importance Obama placed in being able to announce something concrete.

    Given that, it’s not surprising that the numbers in the deal announced Monday suggest that the Americans gave more ground toward the end of the discussions. The Russian daily Kommersant reported Friday that the United States was proposing a maximum of 1,500 to 1,600 operational warheads for each side while the Russian military was insisting on 1,700. The final number - a reduction to 1,500 to 1,675 warheads - came awfully close to the Russian negotiating position.

    START, signed in 1991, expires in December along with the verification plan it imposes. A separate deal President George W. Bush and Russia’s then-president, Vladimir Putin, reached in 2002 sets a range of 1,700 to 2,200 warheads but contains no verification mechanism. Obama and Medvedev did agree to set up a new verification plan.

    The U.S. plan for a missile defense shield in Europe, which Medvedev suggested just days ago could b a stumbling block to a final agreement on nuclear weapons, was the subject of discussion during Monday’s summit meetings. However, it was not mentioned in the joint documents related to the treaty framework.

    U.S. officials painted that as a victory and said it signaled that the Russians would not use missile defense as a reason to block a possible treaty.

    “I get a sense that we’re really on track now to finish this thing irrespective of what happens with the negotiations about missile defense,” said Michael McFaul, the National Security Council senior director for Russian affairs.

    McFaul said discussions about Iran and missile defense dominated the one-on-one discussion between the two leaders.

    However, when it came time for the public news conference, Medvedev couldn’t bring himself to single out Iran, which purchases weapons and many other goods from Russia.

    “There are regions around the world where the presence of nuclear arms would create huge problems,” Medvedev said. “There is no sense in naming them. But it’s quite obvious that on the situation in the Middle East, on the Korean Peninsula, will depend the climate throughout the globe. ... We should make our utmost to prevent any negative trends there. And we are ready to do that,” he said.

    Experts say the U.S. will have little success containing the nuclear threat in Iran without a full-court press from Russia.

    “We’re not going to be able to resolve the situation in Iran without Russia,” former Defense Secretary William Cohen said last week. “Russia holds the key.”

    The summit’s most concrete result was a deal to allow aircraft carrying troops and weapons to U.S. personnel in Afghanistan to overfly Russian territory. “That will save U.S. troops both time and money,” Obama said.

    To the extent progress was made at the U.S. Russian summit, it may have been due to Obama’s efforts to build camaraderie with Medvedev. After a series of setbacks for democracy in Russia, Bush eventually came to regret saying he had looked into the depths of Putin’s soul and saw a good man. Obama came close to that line Monday as he praised Medvedev, Putin’s handpicked successor.

    “I trust President Medvedev to not only listen and to negotiate constructively, but also to follow up - follow through on the agreements that are contained here today,” Obama said, adding that he was “very appreciative.”

    In an interview with state-run Russian news agencies last week, Obama laid it on even thicker. “I’ve found President Medvedev to be a very thoughtful, forward-thinking individual. I think that he is doing a fine job leading Russia into the 21st century,” the U.S. president said.

    What is unclear is whether the man Obama is bonding with is really Russia’s leader - or whether Putin, who became prime minister after leaving the presidency last year, is really calling the shots. Obama is scheduled to have breakfast with Putin on Tuesday.

    Just last month, Putin stunned diplomats by announcing Russia was abandoning 16 years of negotiations to join the World Trade Organization. Putin said Russia wanted to make a joint entry with Belarus and Kazakhstan - a move analysts said would set back Russia’s accession by two or three years.

    U.S. officials said they were “shocked” by the move, which came as Russia was close to joining the tariff-reducing body. The official gave no indication that Medvedev’s explanation of the reasons during the talks Monday shed more light on why Russia would turn back at the last moment.

  • From the Polish Scandal Files...

    Polish budget deficit continues to rise as tax revenues collapse

    From: WBJ
    The government will approve the amendments to this year's budget act later today. According to data from the Finance Ministry, tax revenues will be zl.46.6 billion lower than those assumed in the act still in force.

    Just a week ago the Finance Minister claimed that the figure will stand at zl.37 billion. "The loss in tax revenues is much larger than even the most pessimistic forecasts," said Janusz Jankowiak, chief economist with the Polish Business Council.

    The largest difference will be recorded in VAT revenues as the number will be lower by some zl.24.6 billion as compared to earlier plans. Total revenues will be lower by zl.30.1 billion as the Ministry plans to acquire higher figures from the non-fiscal revenues.

    Madonna concert "satanic" says Walesa

    From: WBJ
    A Madonna concert planned on the Catholic feast day of the Assumption has been condemned as a “satanic provocation” by Lech Walesa, the former President of Poland, Solidarity leader and Nobel Peace Prize winner.

    The concert, planned on August 15, coincides with the day when Catholics celebrate the day the Virgin Mary was physically taken up into heaven.

    “This looks like a satanic provocation,” said Walesa, who for most of his life has worn a picture of the Virgin Mary on his lapel. “I wear her portrait on my chest, so it's understandable I'm not happy that the concert will take place on this day,” Walesa told Reuters, suggesting that the singer should move the date.

    Madonna, born Madonna Louise Veronica Ciccone Fortin, is a controversial singer who often uses religious imagery in her music and stage design. She staged a crucifixion scene on her Confessions Tour, which began in May 2006.

    Polish fake cash pair jailed

    From: New Ham Recorder
    TWO members of a counterfeiting gang responsible for flooding the streets with more than £2m of fake currency were jailed on Thursday for a total of six years.

    Cezary Pleskoinos, 30, and Tony Marshall, 29, were snared after the Serious Organised Crime Agency linked them to a "sophisticated" counterfeiting factory.

    Detectives who raided Pleskoinos's home in Melbourne Road, East Ham, in November seized £275,430 of fake currency. The 'cash' included £20 and £50 Bank of England and Scotland notes and 165,809 in Euros, Southwark Crown Court heard.

    They also found laser printers, 3,763 sheets of A4 paper printed with £20 notes, foiling equipment and a scanner.

    Prosecutor David Allan said the Bank of England confirmed that they recalled £2.186m of "same series" fakes from general circulation.

    Judge Gregory Stone, QC, said: "This was a sophisticated and planned operation with the clear objective of making as much money as possible from this counterfeiting operation.

    "Plainly, this operation had a significant international dimension. Equipment and paper were discovered and had it not been interrupted that equipment and paper would have led to even larger quantities of counterfeit currency.''

    Pleskoinos was jailed for two-and-a-half years. The judge told the Polish counterfeiter: "You were the guardian of the premises and very heavily involved in the printing. I also recommend you for deportation."

    Graham Brown, defending, said Marshall's role was limited to maintaining the premises and running errands for people "in the upper echelons of the hierarchy".

    But the judge said Marshall, of Romford, had an "important role" and jailed him for a total of three-and-a-half years.

    Pleskoinos and Marshall each admitted six counts of making counterfeit notes, one of attempting to make Ghanaian currency, possessing an article for fraud and one of having counterfeiting materials. Marshall further admitted making £6,000 of counterfeit currency in March, 2007.

  • Sport...

    Hleb Is Happy At Barcelona Despite Offers - Agent

    Aliaksandr Hleb is in no rush to leave Barcelona this summer and could well stay put in order to prove himself next term at the Catalan outfit despite receiving numerous offers, according to his agent.

    The Belarusian midfielder moved to Camp Nou from London a year ago and has struggled to adapt to his new surroundings, which hampered his ability to earn a place in Pep Guardiola's team.

    While looking to acclimatise, Hleb also had problems with the language but as he seeks to overcome that he believes that he could be successful next season.

    A number of clubs are prepared to offer the former Arsenal star a way out of Barcelona, but he is not keen to leave and has been told that he is wanted by Guardiola.

    "We have four or five offers from England and Germany," agent Uli Ferber is quoted as saying by Sport.

    "The club knows this but technical secretary (Txiki Beguiristain) has told me that Aliaksandr has a guaranteed place in the squad and that is decided by the coach.

    "Hleb is happy at Barcelona."

  • Endnote...

    Quiet diplomacy. The Kremlin seems to have caved, wonders Eric Walberg

    From: Austrainia TO
    Eric Walberg
    A little over 40 per cent of Russians consider Russian-US relations strained or hostile, down slightly from 2004 when 46 per cent said they considered the US to be Russia’s adversary. United States President Barack Obama’s world PR campaign is working, despite the issues dividing the two countries, from Star Wars missiles in Poland and US plans for cyber warfare, to NATO’s love-affair with Georgia, Ukraine, Azerbaijan and Kyrgyzstan to name just a few of Russia’s neighbours.

    So Russia's agreement, announced at Obama’s summit in Moscow 6-8 July, to ferry primarily US troops and arms through Russian land and air space to Afghanistan to accelerate the slaughter there – without any reciprocation on other outstanding issues – comes as a bit of a surprise. Obama faces a reservoir of resentment among Russians who believe that the US has rarely followed through on its occasional peace gestures. “At this point, there is a little bit of hope and a lot of distrust,” said talk show host Vladimir Pozner on Channel One.

    If the object is to stem the flood of opium, there is lots of evidence that the current Afghan government and the US occupiers themselves actually benefit from this lucrative business, and that the only conceivable endgame which the US can salvage there – a secular military dictatorship propped up by the US – will never deal with this albeit serious problem for Russia. True, Russia also fears the catalysing effect of a Taliban victory on its Muslim Central Asian neighbours. It apparently wants any kind of secular government in Afghanistan, come hell or high water.

    But the humiliation of so directly supporting the US military campaign in Afghanistan after the earlier US-sponsored campaign there which destroyed the Soviet Union and led to the deaths of 15,000 Soviet soldiers is surely not lost on the Kremlin. And to drop this plum in Washington’s lap as it continues to insist that Ukraine and Georgia will soon join NATO and that Poland will have its missiles looks too good to be true from the US perspective. Maybe the Kremlin is deriving some satisfaction from abetting the US in what it sees as a losing battle in Afghanistan, letting the Taliban give US troops some of the medicine inflicted on Soviet troops in yesteryear?

    In addition to his meetings with President Dmitri Medvedev, Obama met Prime Minister Vladimir Putin, though he publically scolded him prior to the summit. “It’s important that even as we move forward with President Medvedev, Putin understands that the old Cold War approach to US-Russian relations is outdated ... I think Putin has one foot in the old ways of doing business and one foot in the new, and to the extent that we can provide him and the Russian people a clear sense that the US is not seeking an antagonistic relationship but wants co-operation on nuclear non-proliferation, fighting terrorism, energy issues, that we’ll end up having a stronger partner overall.”

    This is diplo-speak for “Take us or leave us.” Special assistant to the president and senior director for Russian affairs on the National Security Council Michael McFaul made the point less nicely when he said, “We don’t need the Russians.” This taunting of Putin was formalised by a US suggestion to establish a Biden-Putin working group to renegotiation the START treaty which expires in December, named after the Gore-Chernomyrdin task force that negotiated the 1991 treaty when Al Gore was VP and Viktor Chernomyrdin was Russian PM. That suggestion was immediately brushed aside. “I am not a vice president,” said Putin coldly.

    Obama also visited Soviet president Mikhail Gorbachev. None of the three presidents gave any ground on the missile bases, including Gorbachev, who told talk-show host Pozner the missile bases are aimed at creating a situation that makes it possible for NATO to be first to launch a nuclear strike while staying under its own shield. “There is a need for a common European security, which was written at a conference in Paris in 1990.” The USSR was preparing its answer to Reagan's 1983 Strategic Defense Initiative, Gorbachev said. “I did not agree then and do not agree now with the opinions that it is a bluff and that one should not pay attention to it.”

    The Obama camp may not be as united on the missile issue as the Russians are. Obama acknowledged “Russian sensitivities” in a Novaya Gazeta interview but made clear he would not link arms-control talks to missile defence. Grasping at straws, Medvedev said, “The current administration is prepared for discussions. I think we are smart enough to find a reasonable solution here. Really, to get this problem solved, one must not necessarily cross out the decisions made earlier.”

    Obama threw him a bone by reiterating his readiness to draw a line between offensive and defensive weapons, something that Bush had refused to do since America withdrew from the 1972 ABM Treaty in 2001. The sides agreed to limit their nuclear arsenals to 1,500-1,675 warheads with the cap on the number of delivery vehicles set as low as 500-1,100 units.

    No public mention was made of Georgia and Ukraine actually joining NATO, with Obama stressing, “NATO seeks collaboration with Russia, not confrontation.” But he nonetheless sent (allowed?) Vice President Joseph Biden to fly directly from Moscow to Georgia and Ukraine after the summit. “We’re not going to reassure or give or trade anything with the Russians regarding NATO expansion or missile defense,” warned McFaul.

    Here again, the US administration is not united, with Obama having made no firm commitment to further NATO expansion. Just how much say he actually has in such strategic decisions is a moot point.

    Obama was hoping to throw the Russians another bone by assuring them admission to the World Trade Organisation. But Putin unexpectedly suspended Moscow’s membership bid in June, deciding to approach the issue jointly through a customs union with Belarus and Kazakhstan, without the need for US “help”.

    After years of increasing strain, Moscow clearly did its best to ensure the summit was a success, giving Obama lots of rope. But Obama’s apparent attempt to drive a wedge between Putin and Medvedev will not bear fruit. If the US pushes ahead with its missile bases, it is unlikely that even a cowed Moscow will go along with START II, despite its own desire to rid itself of costly, useless weapons. Maybe McFaul’s crack about not needing the Russians means the US really doesn’t give a damn about START.

    The new Russian WTO plan, in light of the recent BRIC and SCO summits in Russia, suggests that the Russian government is more concerned about putting flesh on its project of creating a multipolar world than with confronting the US directly anymore. Perhaps planners are willing to let the US continue its Afghan gambit, gambling that it will merely sap US strength while helping to fill Russian coffers, a kind of poor man’s revenge on Russia’s Cold War enemy. Analyst Fyodor Lukyanov sees the establishing of a customs union with Russian neighbours as part of Russian plans to “transform itself into a centre of integration.”

    There has indeed been a significant change in Russia’s relations with the rest of the world in the past few years, but it is not necessarily the one Washington would like. It’s not so much a question of Russia ceding to US hegemony, as Obama’s hawks think, but of acknowledging that Russia is not the powerful player that the Soviet Union was, and that the best Russia can do is help usher in a non-US centric multipolar world, which will include disparate allies from all but the North American continent and act to limit the US empire’s wilder plans.

    It’s one of realism on the Kremlin’s part, faced with an array of tinpot “democracies” around it, ready to sell out to what they see as the highest bidder. The most glaring example of this is Kyrgyzstan’s President Kurmanbek Bakiyev, who played Russia and the US off against each other over its Manas airbase, first telling the US to get lost when Russia promised $2.15 billion in aid, and then last month reversing the decision and allowing the US to stay, tripling the rent and extracting other goodies in the process. Even Russophile Lukashenko in Belarus plays the same game with Russia and Europe. And then there’s Uzbekistan’s President Islam Karimov, who said yes and then no an agreement on the Collective Rapid Reaction Forces, not to mention Turkmenistan, Georiga, Armenia, Azerbaijan or Lithuania, and on and on. “A game of chance has developed in the post-Soviet space: Who can swindle the Kremlin in the coolest way?” wrote analyst Aleksandr Golts when news of the Manas decision broke.

    Russia cannot compete with NATO, certainly not without strengthening the Shanghai Cooperation Organisation and the Collective Security Treaty Organization (CSTO), and certainly not with Afghanistan a black hole threatening to suck in its Central Asian neighbours. The CSTO is important less as a counterbalance to NATO than as a viable guarantor of regional security and it's only a matter of time for Russia's neighbours to realise this.

    It looks like Washington has won this stand-off with Moscow, getting its Afghanistan yellow-brick road and its Polish cake. The market value of allying with flashy but fair-weather Washington outshines the more reliable but less alluring Moscow for the present. But US support is for local elites willing to do its bidding. Local populations will gain nothing, and they are wiser than their leaders, with fond memories of their Russian bulwark. The US may have won the battle. Let the US and NATO play out their lethal games in Iraq, Afghanistan and elsewhere. “Progress must be shared,” Obama said in his “Moscow speech” to university students. Let’s see what fruits his policies bear that we can divvy up.