Russia to Propose BRICS Space Station

From – http://www.themoscowtimes.com/business/article/russia-to-propose-brics-space-station/514972.html

Russia has drawn up a proposal to create a new space station for the BRICS group of emerging economies that could be presented at the organization’s five-nation summit this year, the TASS news agency reported Tuesday, citing a copy of the document.

The proposal was crafted by Russia’s Military-Industrial Commission, the government’s primary interface with the aerospace and defense industries. In November, President Vladimir Putin took personal control of the commission.

“It would be useful to explore the possibility of an international manned spaceflight project with the BRICS nations within an overall strategy of entering into technological alliances,” TASS cited an expert panel on the commission as saying in the document.

The document approved further work on the proposal, and suggested adding discussions of a space station for the five BRICS nations — Brazil, Russia, India, China and South Africa — to the body’s business council meetings at the upcoming summit in the Russian city of Ufa.

The proposal comes after months of speculation that the crisis in Ukraine would doom U.S.-Russia space cooperation. For two decades this effort has largely been focused on the International Space Station project (ISS), which is due to end in 2020. NASA has proposed extending it to 2024, but Russia has suggested it might duck out and instead build its own space station — possibly with the participation of China.

The BRICS project would be roughly analogous to the ISS, a $150 billion project involving 15 nations. Anchored by the United States and Russia, the world’s leading spacefaring powers, the ISS allows countries with less advanced spaceflight capabilities to either join onto the station’s Russian and American segments or contribute smaller segments.

A BRICS space station would likely emerge from a similar two-nation partnership, again with Russia in a driver’s seat. The Military-Industrial Commission recommended approaching either China or India — both countries that have well-developed and increasingly ambitious space programs. The proposal would then allow other BRICS members to join.

This would spur the development of space activities in Brazil and South Africa. Although Brazil has had an active space program since the 1960s, its efforts are still mostly focused on utilitarian satellite designs used for communications and observation. South Africa only established a space agency in 2010 and has no independent rocket launch capability.

India has yet to put a man in space without hitching rides on other nations’ rockets. Last year, it demonstrated its rising capabilities after launching an unmanned satellite to Mars on a shoestring budget.

China is perhaps the best partner for such a project. China already launches its own astronauts into space, and is designing its own medium-sized space station. The placement of Russia’s new Vostochny Cosmodrome in Russia’s Far East also makes close cooperation with China far easier.

Worried About Moscow, Belarus’s Lukashenka Drifts Toward Brussels

From – http://www.rferl.org/content/belarus-lukashenka-drifts-toward-brussels/26816183.html

Alyaksandr Lukashenka isn’t known for waxing poetically about the Belarusian language. But that’s exactly what he did at a youth gathering in Minsk earlier this month.

“Culture is what makes a Belarusian person Belarusian,” Lukashenka said. “It is not only literature, music, and architecture, but also our language, which we must know; our history, which we must remember; and our values, which we must respect.”

The unexpected defense of the national identity — and particularly the Belarusian language — was one of many indications in recent months that the authoritarian Belarusian president has grown uncomfortable with his country’s current geopolitical position in the shadow of neighboring Russia.

“No matter who comes to the Belarusian land, I will fight,” Lukashenka said in an interview with Russia’s independent Dozhd television last May. “Even if it is [Russian President Vladimir] Putin.”

The crisis in neighboring Ukraine, during which Lukashenka has consistently defended Ukraine’s sovereignty and territorial integrity while playing an active mediating role to regulate the violence, seems to be offering an opportunity for Belarus to improve its relations with the West.

“Given the increasing issues that President Lukashenka has with the Kremlin, this is an extra incentive for him to try and engage with the European Union,” says Hrant Kostanyan of the Center for European Policy Studies in Brussels.

Maja Kocijancic, a spokeswoman for European Union foreign policy chief Frederica Mogherini, tells RFE/RL that the bloc is “appreciative” of Lukashenka’s positions on Ukraine.

Belarus has not joined Russia in implementing countersanctions against EU countries, despite being a member of the Moscow-led Eurasian Economic Union.

An EU official, who asked not to be identified, cautioned that it is “too early” to talk about progress in relations with Minsk, although “positive steps” have been noted.

“Minsk has woken up to the fact that the world is a nuanced place where you cannot rely on one partner,” the official said.

In more than 20 years at the helm in Minsk, Lukashenka has made an art of weaving between Moscow and the West, accepting generous handouts and political security from his patrons in Russia, while resisting Moscow’s efforts to undermine Belarusian sovereignty or even to fold the small country into the Russian Federation.

But this time, Lukashenka’s defiant stance may be taking deeper roots.

Last week, state media in Belarus announced a new policy of “de-Russification” of the country’s schools, a policy seemingly aimed at reviving the Belarusian language. According to a 2009 poll, 53.2 percent of Belarusians consider Belarusian their native language, down from 73.6 percent in 1999.

On January 26, the government announced its largest-ever peacetime exercises of military reserves, involving some 15,000 people.

And on February 1, a new military doctrine will take effect that specifically states the “sending of armed groups, irregular armed forces, mercenary groups, or regular armed forces who use arms against the Republic of Belarus by a foreign country or countries or on behalf of a foreign country or countries” will trigger a declaration of war.

Convergence Over Ukraine

In December, amid a broad government shakeup seemingly prompted by the tottering economy, Lukashenka named Alyaksandr Kosinets as his chief of staff, considered the second most-powerful position in the country.

Kostinets, a former provincial official from Vitsebsk, is a Soviet-style statist like Lukashenka himself. But he is also a Belarusian patriot who tamped down displays of Russian nationalism in his region. He also erected a monument to Grand Lithuanian Duke Alhierd in Vitsebsk last year over the protests of local ethnic Russians and Cossacks.

At the same time, Minsk has been – at a glacial pace – reforming and modernizing its economy. Hrant Kostanyan notes that more than 55 percent of Belarusians are now employed in the private sector, a dramatic increase that has steadily built up over the last decade. The growing private sector is inevitably interested in better trade relations with the EU, compared to state-owned giants with long-standing ties to the Russian economy.

The convergence of views between Minsk and the EU over Ukraine seems to be offering an opportunity to improve relations. The EU noted Lukashenka’s release of several activists that the bloc considered to be political prisoners and responded late last year by trimming the list of Belarusian officials and entities that are targeted by EU sanctions.

Minsk has also reached out to its Baltic neighbors and to Poland, taking advantage of the common ground it has with them concerning Ukraine. Latvia currently holds the rotating EU Presidency and Latvian Foreign Minister Edgars Rinkevics noted earlier this month that there are “new openings” in relations with Belarus.

The bloc held two rounds of talks with Minsk on visa facilitation in 2014 and a third round is expected this spring. Sources in the EU say a deal on visa facilitation could be initialed at the summit of the EU’s Eastern Partnership program in Riga in May.

EU officials, however, stress that they are not changing their position on “political prisoners” in Belarus and that remains an obstacle to deeper normalization. Amnesty International has recognized seven remaining political prisoners in Belarus.

Analyst Kostanyan says that Belarus has indicated to the EU that Lukashenka would like to attend the Riga summit personally. Belarus – together with Azerbaijan – has been something of a black sheep in the Eastern Partnership program, and Minsk has been represented by lower-level officials at all its summits since it began in 2009.

EU spokesperson Kocijancic does not rule out an appearance by Lukashenka at Riga, but adds it is “premature” to discuss who will attend the event. Analysts say it is more likely that Belarus would be represented by Prime Minister Andrey Kabyakau — which would still be an upgrade since Minsk was represented by its foreign minister in Vilnius in 2013.

Russia, however, continues to have enormous leverage over Belarus’s economy — particularly the energy and electricity sectors. In addition, the EU continues to press Lukashenka for political openness, while Russia is not concerned by Belarus’s authoritarian system. That issue will come to the fore again as Belarus holds another presidential election in November.

Russia Demands U.S. Release Suspected Spy

From – http://www.themoscowtimes.com/article/russia-demands-us-release-suspected-spy/515006.html

Russia’s Foreign Ministry on Tuesday demanded that U.S. authorities release a Russian state banker arrested in New York on suspicion of spying as bilateral ties, already strained by the conflict in Ukraine, sink to new lows.

“No evidence supporting the allegations has been presented,” Foreign Ministry spokesman Alexander Lukashevich said in a filmed address posted on the ministry’s website.

Yevgeny Buryakov, 39, an employee of state bank Vnesheconombank, was arrested Monday on suspicion of working as a Russian intelligence agent without officially notifying the United States, a crime punishable by a decade in prison.

“We demand that this series of provocations unleashed by the U.S. special services against Russian representatives comes to an end,” and call for Buryakov’s release, Lukashevich said.

The Foreign Ministry said that Buryakov had been working at Vnesheconombank, a non-commercial bank that seeks to develop Russia’s economy through investments abroad, when he was arrested.

U.S.-Russian relations are currently at a post-Cold War low. A flare-up in the Ukrainian conflict in recent days saw the port city of Mariupol shelled from locations controlled by pro-Russian rebels, according to a statement by the Organization for Security and Cooperation in Europe.

The charge against Buryakov is a “relatively easy one to prove,” said Mark Galeotti, a global affairs professor at New York University who specializes in Russian security services. “The real question is: Why now?”

The investigation had been ongoing since 2012, the FBI said in a statement Monday. Galeotti cited three possible reasons for the authorities making the arrest now: Either there was a risk that the investigation would soon be discovered, as in the case of the notorious 2010 Russian spy ring that propelled Anna Chapman to fame; or one of the suspects had stumbled across something important or might soon do so; or the move was political, “a shot across Moscow’s bow,” Galeotti said.

Banker by Day
On Monday, the day that Buryakov was arrested, the U.S. Justice Department released a 26-page report that alleged the defendant “did knowingly act in the United States as an agent of a foreign government … without prior notification to the attorney general, as required by law.”

The report also alleged that Buryakov had used “his cover as a banker to proactively gather intelligence about matters of interest to the Russian Federation” to fulfill orders from Russia’s Foreign Intelligence Service (SVR).

Two Russian diplomats who the report said are SVR agents — Igor Sporyshev, 40, and Viktor Podobny, 27 — have also been accused in the case, but left the United States under diplomatic immunity.

Buryakov, who was in the United States on a work visa and lived with his wife and two children in the Bronx, has been denied bail and is due again in court on Feb. 9, international media reported Tuesday.

Two major Russian state television channels, Rossia-24 and Channel One, cited sources as saying the case was politically motivated, echoing the Foreign Ministry’s sentiment.

Rossia-24 cited unnamed lawyers as saying that there was a lack of evidence for the case and that it had a “political subtext.”

A terse Channel One report said that a main clue in the case was a simple Internet search from Buryakov’s work computer for “sanctions, Russia, consequences.” That search was listed among many other leads in the U.S. Justice Department report.

‘Eye for an Eye’
Russian federal lawmaker Sergei Mironov, who heads the Just Russia party’s faction in the lower house of parliament, told the Interfax news agency Tuesday that Russia should respond with “an eye for an eye.”

“This is a political show, 100 percent,” Mironov said. “The task of representatives of a trade mission is to find investors and contacts. It is comical to accuse these people of espionage.

“There is a very appropriate measure: an eye for an eye,” he said, adding that Russian security services know about foreign diplomats who are “not completely” in line with the law.

Igor Morozov, a member of the upper house of parliament’s foreign affairs committee, said in comments carried by RIA Novosti that the case is meant to “compromise Russia’s participation in international organizations” and “tarnish its image.”

Morozov, who previously worked for Russia’s Foreign Intelligence Service himself, denounced the case as a “provocation.”

Spy Ring Arrest Highlights Jump in Russian Spying Under Putin

From – http://freebeacon.com/national-security/spy-ring-arrest-highlights-jump-in-russian-spying-under-putin/

The arrest of a Russian SVR intelligence officer and identification of two of his accomplices in New York this week highlights aggressive spying operations around the world under Russian leader Vladimir Putin.

Evgeny Buryakov, an SVR officer working undercover as an employee of a Russian bank, was arrested in the Bronx on Monday by FBI agents. Two other SVR officers, Igor Sporyshev and Victor Podobnyy, linked to the case were operating under diplomatic cover as Russian trade and United Nations officials, and thus were not arrested. They have fled the country.

The arrest of Buryakov, a Russian intelligence officer and not a recruited agent, is likely to trigger Russian retaliation, such as the arrest of a CIA officer in Russia who could possibly be exchanged for Buryakov.

In Moscow Tuesday, a Foreign Ministry spokesman denounced the arrest and demanded Buryakov’s release. “No evidence supporting the allegations has been presented,” Alexander Lukashevich, the spokesman said in a video statement on the ministry’s website.

The case has fueled speculation of a spy swap. The Obama administration could exchange Buryakov for former NSA contractor Edward Snowden, who is currently living in Moscow under the protection of the Russian government. Snowden was charged in May 2013 with unauthorized disclosure of national defense information and providing classified information to unauthorized persons.

While intelligence analysts say Russia is not likely to swap Snowden for Buryakov, the threat to do so could give the Russians leverage over the fugitive NSA contractor to disclose more of the NSA secrets he claims so far have not been provided to his hosts, only to journalists.

Russian intelligence-gathering operations in the United States by the SVR and the GRU military intelligence service are at high levels, according to intelligence officials. The number of SVR officers operating both officially from embassies and consulates and in non-officials status is currently at the same levels as during the days of the Soviet Union, current and former officials have said.

The New York arrests follow an increase in Russian intelligence operations around the world. They include:

In France, Russian intelligence has stepped up spy recruitment efforts against private sector companies, the national legislature and the president’s office. A GRU military intelligence colonel, identified in press reports as Illiouchine, recently was caught trying to recruit a “mole” that could spy inside the office of French President Francois Hollande. Some 40 SVR officers are operating in France, including “illegals” of the Directorate S non-official spy unit.
Germany’s elite GSG-9 counterterrorism unit uncovered two SVR illegals, Heidrun Anshlage and her husband Andreas, in an October 2011 raid on their house in Marburg, Germany. Heidrun was operating a short-wave radio, reportedly communicating with control officers in Moscow at the time of the raid.
Germany’s BND intelligence service has scaled back cooperation with the SVR as a result of the Ukraine crisis.
Russian FSB federal security agents, on Sept. 5, kidnapped an Estonian internal security officer, Eston Kohver, on the Estonian side of border with Russia and charged him with espionage.
The head of Britain’s MI5 domestic counterspy service has said SVR intelligence-gathering in Britain is similar to the activities of the Soviet-era KGB, with as many as 50 SVR officers operating in the country.
In 2006, a Russian SVR illegal operating in Canada under the name Paul William Hampel was deported after his arrest as a spy.
The success in uncovering some of the western operations of SVR and its companion services are said by U.S. intelligence sources to be the result of a major counterintelligence breakthrough in the early 2000s. The breakthrough is the result of either the defection of a key Russian intelligence official, or a success by the National Security Agency in penetrating Russian electronic communications.

In the Buryakov case, the FBI succeeded in planting listening devices and intercepting communications between the two SVR co-conspirators, Sporyshev and Podobnyy, according to a criminal complaint made public in the case.

The two SVR officers were overheard complaining about working under light spy cover as diplomats. In one intercepted conversation, Podobnyy said the illegals branch, or Directorate S, “is the only real intelligence” collector. He then noted that, as stated in commenting on the 2010 capture of the 10 Directorate S spies, “look, in the United States even the S couldn’t do anything.”

The FBI complaint reveals that Buryakov was asked to help a Russian state-run news outlet, identified in press reports as the TASS news agency, as a Russian intelligence arm.

The FBI complaint also revealed attempts by the SVR ring to recruit a woman who was a financial consultant for a company, several women students attending a New York university and a U.S. businessman who traveled frequently to Russia.

In one conversation about the recruitments, Sporyshev told his colleague: “But there was a problem with [Female-2]…. I have lots of ideas about such girls, but these ideas are not actionable because they don’t allow [you] to get close enough. And in order to be close you either need to f*** them or use other levers to influence them to execute my requests. So when you tell me about [recruiting] girls, in my experience, it’s very rare that something workable will come of it.”

The spies also were interested in gaining inside information on plans for U.S. economic sanctions imposed after the Russian military annexation of Crimea.

Buryakov, in response to the SVR tasking, conducted an Internet search using the terms “sanctions Russia consequences.”

In late 2013, the spies sought information on the pending multibillion dollar deal for commercial aircraft between Canada’s Bombardier Aircraft and Russia’s state-owned defense technology conglomerate, Rostec.

The complaint did not identify the companies but news reports revealed the company names.

The complaint indicated that Buryakov, from his position as a Russian banker, “was gathering intelligence for SVR during confidential meetings with representatives of” Bombardier and others.

The arrest is the first major Russian espionage case since the 2010 arrest of the 10 deep-cover Russian “illegals” who were later exchanged for four imprisoned CIA recruited agents.

The case represents a hardening of the Obama administration’s policy toward Russia that in the past was characterized by conciliatory policies dubbed “the reset” that failed to improve bilateral ties.

Since last year, however, U.S.-Russian relations declined sharply after Russian President Vladimir Putin, a former officer of the KGB, predecessor to the SVR, ordered the military annexation of Ukraine’s Crimea. Russia also is carrying out covert military operations in support of pro-Moscow rebels in eastern Ukraine.

The United States has imposed economic sanctions on Moscow as a result of the Ukraine intervention and is considering additional sanctions, including tightening Moscow’s access to financial markets.

According to the FBI, the Buryakov spy ring was part of the SVR’s Line ER unit that is directed at gathering economic secrets. The three men were charged with espionage conspiracy and failure to register as foreign agents, as the operations involved attempts to recruit at least three Americans involved in the U.S. finance sector.

Marion “Spike” Bowman, a former a former FBI counsel and former deputy national counterintelligence executive, said the latest Russian spy case reflects a hardening of the U.S. government position toward Russia.

“In light of the rather chilly relations between United States and the Russians, I think what’s happening here is the administration is saying, ‘Look we understand what’s happening and we don’t like it, and unless you shape up, we’re going to continue to keep doing this [arresting spies],’” Bowman said.

Kenneth deGraffenreid, another former deputy national counterintelligence executive, said the arrest this week should be a wake up call for the administration that Russia likely is engaged in more damaging spy operations against the U.S. government.

“The biggest signal this case should be sending to the political leadership of the Obama administration is that there are dangerous intelligence activities going on,” deGraffenreid said.

“If the Russians can afford to run operations seeking future penetrations of the financial systems, think what they are doing to our military and intelligence organizations,” he said.

Under the Obama administration, no foreign spies have been uncovered inside key national security agencies such as the CIA, Pentagon and State Department, despite high levels of spying activity, deGraffenreid said.

Past major spy penetrations that caused extensive national security damager have included CIA turncoat Aldrich Ames, convicted in 1994 of giving up CIA agents to Russia; FBI Agent Robert Hanssen, who spied for Moscow for 22 years until his arrest in 2001; and Ana Montes, a senior Defense Intelligence Agency analyst and spy for Cuba until her arrest in 2001.

Bowman said the Buryakov case appears linked to the 2010 case of Russian illegals in New York who were under surveillance for years in an effort to spy on their activities.

“They didn’t really do much of anything except one woman who was friends with a fundraiser for Hillary Clinton,” Bowman said. “That was all we saw.”

One of the Russian spies, Cynthia Murphy, was later identified as SVR officer Lydia Guryev. Court papers in that case revealed that she met several times with Alan Patricof, a prominent New York-based financier active in political fundraising, director of the venture capital firm Greycroft LLC who was a donor to Democratic candidates, including Clinton when she was a U.S. senator from New York.

Both Bowman and deGraffenreid said it is unlikely the Russians would agree to give up Snowden for Buryakov.

A future spy swap for Buryakov, however, is said to be a possibility, as the U.S. government does not have a strong record of following through with prosecutions of foreign intelligence officers caught spying in the United States.

Justice Department spokesman Marc Raimondi declined to comment on a possible spy swap.

The Buryakov case involved all the FBI’s surveillance tools, including covert microphones and video cameras, telephone intercepts, and use of a confidential informant, the complaint said.

Russian government is focusing on internal holdings, including 400 billion dollars, but they only exist on paper

From – http://euromaidanpress.com/2015/01/28/january-27-russian-government-is-focusing-on-internal-holdings-including-400-billion-dollars-but-they-only-exist-on-paper/

January 27 – Russian government is focusing on internal holdings, including 400 billion dollars, but they only exist on paper, – said former Deputy Energy Minister of Russia Vladimir Milov in his interview for “Ekonomichna Pravda”. “Holdings exist only on paper. Frankly, the issue here is not even what will happen to the economy. The issue is how the society will respond, because people have gotten used to constant growth in the last 15 years. Society was “lulled” by people who managed the economy and ensured the growth, – said Milov.

January 27 – Russia will not establish any limits in response to a possible shutdown of SWIFT system – Russian Prime Minister Dmitry Medvedev. They must be afraid.

EU Leaders Could Announce New Russia Sanctions Next Month

From – http://www.themoscowtimes.com/business/article/eu-leaders-could-announce-new-russia-sanctions-on-feb-12/514944.html

European Union leaders asked their foreign ministers on Tuesday to consider possible new sanctions on Russia in response to a rebel offensive in eastern Ukraine, but a final decision to impose them is likely to be left to a summit next month.

Foreign ministers have called an extraordinary meeting for Thursday after Kiev said 30 civilians were killed in shelling of the government-held port of Mariupol by pro-Russian rebels on Saturday, shattering a five-month ceasefire.

In a rare joint statement, the EU’s 28 leaders voiced concern about the deteriorating security and humanitarian situation in eastern Ukraine and condemned the killing of civilians in the “indiscriminate shelling” of Mariupol.

“In view of the worsening situation we ask (foreign ministers) to assess the situation and to consider any appropriate action, in particular on further restrictive measures, aiming at a swift and comprehensive implementation of the Minsk agreements,” they said.

The leaders said they would assess the situation at their next meeting in February.

The foreign ministers are likely to ask the EU’s executive commission on Thursday to prepare new sanctions against Russia, but the final decision on whether to implement them would be taken by EU leaders at their summit on Feb. 12, EU officials and diplomats said.

It was unclear what kind of sanctions the EU might prepare, but one diplomat said he did not expect major new economic restrictions on Moscow at this stage.

EU ambassadors were scheduled to meet later on Tuesday to prepare Thursday’s ministerial meeting.

The leaders noted evidence of continued and growing Russian support for the separatists. They urged Moscow to condemn the separatists’ actions and to implement Minsk ceasefire agreements.

Despite sharp divisions among the EU’s 28 countries over the wisdom of imposing sanctions on Russia, the bloc’s main energy supplier, the EU has agreed several rounds of sanctions on Moscow, including on the financial, defense and energy sectors.

The renewed fighting has put stronger EU sanctions back on the agenda a week after ministers discussed a memo by EU foreign policy chief Federica Mogherini suggesting EU governments could start talking to Russia again on some issues if Moscow implemented a Ukraine peace agreement.

European Union hawks on Russia, including Poland and Lithuania, called on Monday for sanctions on Moscow to be stepped up, but EU power-broker Germany was more cautious.

The head of the European Council of EU leaders, Poland’s Donald Tusk, hit out at the weekend at “appeasement” of Russia and said it was “time to step up our policy based on cold facts, not illusions.”

As RU Economy Crumbles, Some Russians Might Need Coupons to Pay for Bread

From – http://www.themoscowtimes.com/business/article/as-economy-crumbles-some-russians-might-need-coupons-to-pay-for-bread/514934.html

Russian bread prices may rise in February when suppliers are expected to pass increased production costs on, and the government should consider using food coupons to aid low-income consumers, a lobby group for farmers said.

Alexander Korbut, the deputy head of Russia’s Grain Union, the farmers lobby group, made clear the suggestion was aimed only at relieving pressure on the poorest consumers. With a very high grain harvest last year and new state curbs on grain exports, Russia has ample supplies for its population.

Russia’s inflation, rising quickly as a result of a 50 percent fall in the ruble since early 2014, is expected to peak at 15-17 percent in March/April this year.

“It is inefficient to fight soaring prices, you need to address the low income of the population,” Korbut told a briefing in Moscow.

“We need to go back to the idea of food coupons for people with very low income — this will cost less than other measures,” he said Monday.

Korbut cited the United States’ food-purchasing assistance program Supplemental Nutrition Assistance Program (SNAP) as an example. The practice was also common in the Soviet Union at times of food shortages.

Russia’s bread prices may rise by up to 15 percent in 2015 if annual inflation reaches 7.5 percent, Korbut said. Prices for bread rose 7.5 percent in 2014, according to state statistic service Rosstat.

The plunging value of the ruble spurred food inflation in late 2014 and forced the government to curb grain exports. It might consider banning grain exports altogether if the restrictions already in place fail to benefit the economy as hoped.

According to Korbut, grain accounts for about 10 percent of bread production costs and a higher grain price is already included in bread producers’ prices. However, rising fuel and transportation costs have yet to be priced in.

Earlier on Monday Russia’s consumer rights watchdog said it had imposed a temporary ban on salt imports from a state Ukrainian producer, which had an estimated 24 percent share of the Russian market.

The ruble’s decline has also driven up wholesale sugar prices in Russia by more than 80 percent since October, an industry source and retailers said last week.

Poroshenko and US press Putin on Ukraine violence

From – http://news.yahoo.com/poroshenko-presses-putin-rein-ukraine-rebels-102936346.html

Kiev (AFP) – Ukraine President Petro Poroshenko appealed to Russia’s Vladimir Putin on Wednesday while Washington threatened tougher measures should Moscow fail to rein in separatists mounting a new offensive in the east of the ex-Soviet republic.

Poroshenko’s personal letter and US Treasury Secretary Jack Lew’s warning came one day after European Union leaders unanimously backed pursuing more economic restrictions against Russia for its alleged meddling in Ukraine.

Greece and Cyprus later distanced themselves from the statement but are not expected to fight new penalties the bloc’s 28 foreign ministers will draft in Brussels on Thursday.

Western sanctions and a coinciding slide in oil prices have plunged Russia into recession and seen Standard and Poor’s slap a “junk” rating on Moscow’s foreign currency debt.

The downgrade threatens to further alienate Western investors as the grade is Russia’s worst since the start of Putin’s 15-year rule.

Yet the pain appears to have done little to alter Putin’s tough approach to his western neighbour or to dent Russians’ monumental trust in the Kremlin chief.

Pro-Moscow rebels in Ukraine last week defiantly pulled out of peace talks and vowed an offensive on a strategic government-held port city that provides a direct land bridge to Ukraine’s Russian-occupied Crimea peninsula.

A rocket assault on the port of Mariupol left 31 civilians dead at the weekend, in a major escalation of the conflict. The separatist fighters have denied being responsible for the deaths but international monitors have said the rocket fire came from rebel-held territory.

The new eastern offensive has also seen separatists in the Lugansk and Donetsk regions try to link up their armies by taking over isolated pockets of land still controlled by government troops.

The Kiev military and local pro-government officials said five soldiers and at least three civilians had died in clashes over the past 24 hours. The United Nations believes the latest spiral of violence has pushed the war’s death toll above 5,100.

Poroshenko’s office said his letter to Putin demanded that Moscow immediately rein in the offensive and fulfil the terms of a long-ignored peace plan it signed with Kiev and two top separatist leaders in Belarus in September.

“On Monday, I sent a letter to President Putin whose main elements included not only the demand to cease fire and implement the Minsk Agreements but also to release Nadezhda (Nadia) Savchenko and all the hostages,” the presidency quoted Poroshenko as saying.

The female Ukrainian pilot is alleged to have been abducted by the rebels and smuggled to Moscow where she is now being detained.

She is charged with involvement in an attack that killed two Russian reporters in June. Savchenko’s lawyers said she went on a hunger strike in protest at her detention on December 13.

– US help for Ukraine –

There was no immediate reply to Poroshenko’s letter from the Kremlin.

But Putin this week accused NATO of launching a proxy war in eastern Ukraine designed to weaken Russia and sever the two country’s ancient relations.

US finance chief Lew said during a visit to Kiev that Washington would prefer to ease its worst crisis with Moscow since the Cold War.

“Our first choice is a diplomatic resolution that allows us to lessen sanctions,” Lew told reporters after meeting his Ukrainian counterpart Natalie Jaresko.

“But we are prepared to do more if necessary. To that end, we’ll continue to work with our allies to increase the pressure on Russia.”

Moscow flatly denies backing the insurgents and claims the sanctions are an attempt to punish Russia for going against US policies.

US President Barack Obama and German Chancellor Angela Merkel agreed in a late Tuesday phone call “on the need to hold Russia accountable for its actions”.

Lew also told Jaresko — a US national confirmed to her post last month — that Washington was ready to provide up to $3 billion in support should Kiev press ahead with overdue economic restructuring steps.

Canadian Prime Minister Stephen Harper on Wednesday said his country would provide Kiev with another low-interest $200 million loan to help stabilise its economy. Canada already lent the same amount to Ukraine last September.

Ukraine’s economy contracted by nearly eight percent last year and Kiev is currently facing a massive foreign debt burden that threatens to put it into default within the next few months.

Poroshenko: All should get back to peace talks, Russia should abide by Minsk agreements

From – http://www.unian.info/society/1037240-poroshenko-all-should-get-back-to-peace-talks-russia-should-abide-by-minsk-agreements.html

President of Ukraine Petro Poroshenko has said he sees no possibility of a military solution to the conflict with Russia and hopes the latter will abide by the agreements reached in Minsk in September last year.

“We have built a new army that is able to contain the terrorists, but we cannot solve this conflict by military force,” Poroshenko said in an interview on Poland’s TVN24 channel, according to UNIAN’s correspondent in Warsaw.

“Russia has a million soldiers – [it has] the largest and most powerful army in the world, [and] we are not able to confront it.”

Poroshenko said there was a need to continue negotiations on resolution of the conflict.

“All sides should return to the negotiating table. Russia, in turn, must fulfill the Minsk plan,” the president said, noting that the Ukrainian government urges Russia to withdraw its military, and stop sending heavy weapons and funds to the militants.

Poroshenko said there was no alternative to searching for a political solution to the conflict with Russia.

“There is no other way than strengthening our security and engaging in dialogue with Russia,” he said, noting that the Russians are also paying a high price for what is happening in the Donbas.

“So we have to talk to Russians and seek the best arguments. We have to find an opportunity for Russia to get out of this situation.”
Read more on UNIAN: http://www.unian.info/society/1037240-poroshenko-all-should-get-back-to-peace-talks-russia-should-abide-by-minsk-agreements.html

Russia’s bizarre proposal to condemn West Germany’s 1989 ‘annexation’ of East Germany

From – http://www.washingtonpost.com/blogs/worldviews/wp/2015/01/28/russias-bizarre-proposal-to-condemn-west-germanys-1989-annexation-of-east-germany/

Russian lawmakers will consider a new statement that would condemn an event that happened 25 years ago – the reunification of Germany.

According to Russian news agency Tass, State Duma Speaker Sergey Naryshkin has asked the Duma’s Committee on Foreign Affairs to look into condemning the “annexation” of East Germany by West Germany in 1989.

Given the time that’s passed and the relative success of German reunification, the idea has struck many as absurd: Mikhail Gorbachev, leader of the Soviet Union in 1989, called it “nonsense” Wednesday. Similar outlandish statements have been made by Russian lawmakers recently – last year, one proposed a ban on high heels, for example.

However, this proposal can’t be as easily dismissed: Naryshkin is an ally of President Vladimir Putin, and it seems unlikely he would have made such a bold statement without the Russian leader’s approval.

And while the events it concerns may be long in the past, the motivation is likely the present. The plan was originally put forward by Nikolay Ivanov, a Communist Party lawmaker, who has argued that the reunification of Germany was insufficiently democratic. “Unlike Crimea, a referendum was not conducted in the German Democratic Republic,” Ivanov was quoted as saying, referring to the region of Ukraine that broke away to join Russia last year after a disputed referendum.

Russia and Germany have an important, if complicated, relationship. Chancellor Angela Merkel is perhaps the closest Western leader to Putin – she grew up in East Germany, and – like Putin, who served with the KGB in Dresden – can speak both German and Russian. However, Merkel has been a prominent voice supporting sanctions on Russia after actions in Ukraine, and the relationship has been strained. Merkel famously told President Obama that the Russian leader was living “in another world.”

Ivanov pointed to comments made by the president of the Parliamentary Assembly of the Council of Europe (PACE), Anne Brasseur of Luxembourg, who had accused Russia of annexing Crimea, and said his proposal was a “form of a retaliatory step.” Merkel herself had also recently condemned Russia for its actions in Crimea. “The annexation of Crimea is a violation of something that has made up our peaceful coexistence, namely the protection of borders and territorial integrity,” Merkel said last week in Davos, Switzerland.

Even if the proposal is just bluster, a direct comparison between the two events does seem a little hard to make. The reunification of Germany occurred after Hungary removed its border fence, allowing thousands of East Germans to escape to the West, and eventually helped to topple the Berlin Wall. After large protests, the socialist German Democratic Republic (GDR) later held free and fair elections in 1990, which led to the formation of a pro-reunification government that signed an agreement to dissolve East Germany and join the West.

Meanwhile, the annexation of Crimea followed violence in the Ukrainian capital, Kiev, and the ousting of pro-Russian President Viktor Yanukovych, and the mysterious arrival of the “little green men” widely assumed to be Russian troops. A rushed referendum was held with these troops in Crimea, which produced overwhelmingly pro-Russian results.

As Gorbachev put it, the times are different. “You can’t make judgments about what happened in another era, 25 years ago, from current-day conditions,” the former general secretary of the Communist Party of the Soviet Union told Interfax. “What referendum could have been held while hundreds of thousands of people rallied both in the GDR and the FRG [the Federal Republic of Germany or West Germany], the only motto being ‘We are one nation?’ “