| June 27, 2014
Click on the link to get more news and video from original source: http://www.businessweek.com/articles/2014-06-27/putins-economic-model-showing-strain-as-russia-is-spurned-by-foreign-banks
Photograph by Yuri Kadobnov/AFP via Getty Images
Russia warned Ukraine today that it faces “grave” economic consequences, including potential new restrictions on trade, after President Petro Poroshenko signed a free-trade agreement with the European Union.
Such retaliation would certainly harm Ukraine, which sends about one-fourth of its exports to Russia. But the construction of new trade barriers only underscores the bunker mentality that underlies President Vladimir Putin’s management of Russia’s economy—and the increasing risk it poses to the country’s economic health.
In an eye-opening report today, Bloomberg News journalists in Moscow describe an economic system that’s increasingly run by the Kremlin, isolated from global markets, and starved for financing. Among the key points:
• State-controlled enterprises now account for more than half the national economy, up from 30 percent when Putin came to power in 1999.
• The central bank is pouring unprecedented sums into a troubled banking system that’s largely under state control after foreign competitors were squeezed out.
• Now the overstretched central bank is being ordered to step up long-term financing to designated industries.
As relations with the West deteriorate, economic xenophobia seems to be taking root. In recent weeks, Putin has called for restrictions on imports of advanced technologies, in an effort to stimulate domestic technology development. He’s set up a state-run payments system to compete with Visa (V) and MasterCard (MA). And a law taking effect on Aug. 1 will require foreign companies operating messaging and social networking services in Russia to store user data and messages on servers within the country.
Ultimately, these steps will probably hurt Russia more than its trading partners. “The measures the president is proposing will certainly limit competition and freeze modernization. They will lead to an increase in market regulation and protectionism.” No, that’s not a wild-eyed government critic speaking—it’s Alexei Kudrin, a member of Putin’s economic council who was Russia’s finance minister from 2000 to 2011, speaking to Bloomberg News in an interview.
About $90 billion in capital is expected to flee Russia this year, and higher borrowing costs have largely shut Russian companies out of external debt markets since the annexation of Crimea. That leaves Russian companies scrambling to find other sources of financing. Just today, state-run oil company Rosneft (ROSN:RM) raised at least $1.5 billion by getting BP (BP) to prepay for fuel it expects to receive over the next five years.
Most Russian companies, though, aren’t sitting on billions of dollars worth of oil. Instead, they’re turning to domestic lenders such as state-controlled Sberbank (SBER:RM) and VTB Bank (VTBR:RM). Central bank financing to commercial lenders has more than doubled in the past year, to $142 billion in April. Adding to pressure on the central bank, Putin has ordered it to set up a new financing mechanism for Russian industry.
“The banking system is close to having a deficit of assets that can be used as collateral to get funds from the central bank, while demand for refinancing is continuously increasing,” Sberbank Chief Executive Officer Herman Gref told Bloomberg News.
Why aren’t more business leaders sounding the alarm? Fear of Kremlin retaliation is certainly one factor. Another is Putin’s 86 percent approval rating—which has been strengthened, at least in the short term, by a population rallying around its embattled leader.
Time is running short, though. “The geopolitical tension is bad, but the problem with financing is far more serious,” says Alexey Vedev, head of the Gaidar Institute’s Center for Structural Research in Moscow. “This can’t go on forever.”
“I’m proud to be an American and believe in disseminating the truth and that is why after this newscast, I’m resigning.”
Click on the link to get more news and video from original source: http://news.msn.com/world/us-based-tv-anchor-quits-russian-station-during-newscast
March 5, 2014
RT anchor Liz Wahl said she could no longer be “part of a network that whitewashes the actions of Putin.”
WASHINGTON (Reuters) – A Washington-based news anchor for the Russia Today television network quit her job on air on Wednesday, telling viewers she could not be part of a Russian government-funded station “that whitewashes the actions of Putin.”
Citing on-air comments earlier this week by another U.S.-based Russia Today presenter, Abby Martin, that Russian intervention in Ukraine’s Crimea region was “wrong,” Liz Wahl told viewers that “as a reporter on this network, I face many ethical and moral challenges.”
“My grandparents came here as refugees during the Hungarian revolution, ironically to escape the Soviet forces,” Wahl said, adding she was “very lucky to have grown up here in the United States.”
Wahl added she was the daughter of a military veteran and her partner was a doctor at a military base “where he sees everyday the first-hand accounts of the ultimate prices that people pay for this country.”
“And that is why personally I cannot be part of a network funded by the Russian government that whitewashes the actions of Putin,” she said.
“I’m proud to be an American and believe in disseminating the truth and that is why after this newscast, I’m resigning.”
Russia Today could not be reached for comment. The multilingual news and information network broadcasts in more than 100 countries.
(Writing by Peter Cooney; Editing by Jan Paschal)
Click on the link to get more news and video from original source: http://hosted.ap.org/dynamic/stories/U/US_UNITED_STATES_UKRAINE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT
By JULIE PACE and LARA JAKES
WASHINGTON (AP) — The Obama administration slapped new visa restrictions Thursday against pro-Russian opponents to the new Ukraine government in Kiev, and cleared the way for upcoming financial sanctions, as the West began punishing Moscow for refusing to withdraw its troops from Ukraine’s Crimea region.
The new restrictions targeted an unspecified and unidentified number of people and entities that the Obama administration accused of threatening Ukraine’s sovereignty and territorial borders. They were announced in Washington as Secretary of State John Kerry headed into a meeting with Russian Foreign Minister Sergey Lavrov in Rome on the sidelines of a diplomatic forum about Libya.
The anticipated financial sanctions will penalize “those who are most directly involved in destabilizing Ukraine, including the military intervention in Crimea, and does not preclude further steps should the situation deteriorate,” the White House said in a statement.
“At the same time, as the president has said, we seek to work with all parties to achieve a diplomatic solution that de-escalates the situation and restores Ukraine’s sovereignty,” the statement said. “We call on Russia to take the opportunity before it to resolve this crisis through direct and immediate dialogue with the Government of Ukraine.”
A senior administration official said the new restrictions are aimed at Russians and Ukrainians in the strategic Crimea region. Crimea is a peninsula that hosts a major Russian navy base and is historically and culturally a stronghold of Russia.
Local government officials in Crimea are now seeking to separate from Ukraine, and on Thursday set a March 16 date for a referendum vote on whether the region should become part of Russia.
Ukraine’s unrest peaked in February, after months of pro-Western protests seeking the overthrow of the President Viktor Yanukovych in anger over economic woes and corruption. Yanukovych, who is pro-Russian, fled for protection just outside of Moscow, and Russian President Vladimir Putin sent troops into Crimea in a show of force against the upstart government in Kiev.
Jakes reported from Rome.
Click on the link to get more news and video from original source: http://www.reuters.com/article/2014/03/06/us-ukraine-crisis-expats-idUSBREA251AR20140306
By Alexander Winning and Victoria Cavaliere
LONDON/NEW YORK Thu Mar 6, 2014 9:54am EST
(Reuters) – Watching powerless from afar as the drama in their native country unfolds, expatriate Ukrainians are raising their voices in sometimes lonely protest and wondering what new surprises Russian President Vladimir Putin may have in store.
Russia’s effective seizure of Crimea, and its threat of further military intervention to protect Russian-speakers there and elsewhere in Ukraine, have confronted Kiev with its deepest crisis since it won independence from Moscow in 1991.
Putin has said that military force would be a last resort. But for Irina Dorosh, one of just a dozen protesters standing near British Prime Minister David Cameron’s office in central London one morning this week, his words offer little reassurance.
“The most urgent problem is the threat of war in Crimea,” said Dorosh, who has lived in Britain for 13 years and comes to Downing Street every day after dropping off her children at school.
“Putin is cunning, you can’t trust what he says. This could be the calm before the storm,” said the 35-year-old, her shoulders draped in a blue and yellow Ukrainian flag.
The crisis came to a head last month when Ukrainian President Viktor Yanukovich was toppled by mass protests. Russia denounced his overthrow as a coup and pro-Moscow forces took control of Crimea, a majority Russian-speaking region of Ukraine which serves as headquarters to the Russian Black Sea fleet.
Putin has reserved the right to use all options to protect Russians he says are living in “terror” in Ukraine. Ukraine and the West have rejected that assertion; the United States said on Wednesday there were no credible reports that ethnic Russians were under threat.
Dotted along a stretch of Second Avenue in New York City’s East Village, Ukrainian businesses and restaurants display handmade signs and poster boards demanding “Putin Hands Off Ukraine!”
“Anybody who tells himself Putin is not trying to build an empire is fooling himself,” says Yarko Dobriansky, 31, a server at Ukrainian restaurant Veselka.
Janna Deikan, a 46-year-old piano teacher who left Ukraine in 1990, is pinning her hopes on a robust response towards Russia from Europe and the United States.
“I think Russia is being aggressive. Ukraine is an independent country and its people spoke. The dictator Yanukovich has run to Russia. If everybody helps Ukraine, the EU, the U.S., I think things will be OK for Ukraine,” she said.
Outside a social club where Deikan meets fellow Ukrainians and recruits music students, a memorial with candles and flags has been erected, with a sign that reads: “In memory of those killed in Ukraine during the protests for freedom.”
Peter Polnyj, 68, runs a post of the Ukrainian American Veterans group in Brooklyn.
“I’m here in America almost 64 years, my parents were born there, not too far from Kiev. My mother is very upset about it. She still has family in Kiev, in that area. I think basically all of this is that Vladimir Putin wants to take over and make it what it was way back when, Lenin and Stalin, all those happy fellows, had an empire,” he said.
SOME RUSSIANS BLAME WEST
Russia has accused the West of engineering Yanukovich’s overthrow – a view readily accepted by some expatriate Russians interviewed by Reuters – and described some of those who toppled the Ukrainian leader as “fascists” and “terrorists”.
Sitting outside an Orthodox church in London, Vasily, 65, visibly bristled when asked about the acting government in Kiev.
“They’re bandits supported by forces from the United States and cowardly European politicians,” he said.
Andrei, a Russian who works as a sales manager in Dubai, thinks Moscow is just defending itself. “We don’t want American missile bases to pop up next to our border,” he said.
Dimitri Yakovlev, 46, who has lived in Paris for two decades and runs a chauffeur service, is highly critical of European Union and U.S. threats to punish Russia.
“In my opinion, it is the West who helped topple Yanukovich. Everything was planned for a long time and now they want to impose sanctions on Russia, I do not see logic in doing this,” he said.
But Olga, a 29-year-old Russian history professor based in Paris, is less convinced by Moscow’s line that the anti-Yanukovich protesters on Kiev’s Maidan – or Independence Square – were mainly supporters of the far-right.
“I have many friends who are researchers in Kiev and who demonstrated on Maidan Square, and while, yes, there were some extremists, they were not the majority of people,” she said, declining to give her last name.
“I think the Russian government has been using them to make people believe that Russians and pro-Russian Ukrainians needed protection from Moscow.”
“BROTHER AGAINST BROTHER”
While many older Russians regret the fall of the Soviet Union, an event that Putin himself has described as the “greatest geopolitical catastrophe of the 20th century”, it is the loss of Ukraine that often rankles most.
Russia and Ukraine were united for hundreds of years, and the earliest Russian state was founded in Kiev. Regret at the breaking of those bonds shone through in several of the expatriates’ interviews, irrespective of the speakers’ attitudes towards Putin.
“We’re one people, though we’re now divided. How did it happen?” asked Vasily, the elderly Russian outside the church in London.
Avgustina, a 20-year-old from eastern Ukraine who studies in Poland but is working a three-month internship in the French ski resort of Meribel, told Reuters she did not expect to return home after university.
“I love Russia, my relatives live there, but it is all so sad,” she said. “Why should it be brother against brother?”