During the highly choreographed production, the prime minister told the country not to hold its breath for his departure from politics, expressed interest in running for president again in 2012, accused jailed Yukos CEO Mikhail Khodorkovsky of murder, blamed the United States for preventing Russia’s inception into the World Trade Organization, and expounded upon the subtleties of understanding Stalin, among other things.

The Crisis

Even before Putin began to speak, host Maria Sittel took the floor and exalted the government for its handling of the economic crisis. “We all know perfectly well how the year of the crisis began: millions of Russian citizens feared poverty; tens of thousands expected to be fired; business calculated future losses,” she said. But instead of throwing its citizens to the “mercy of fate,” she continued, the government “laboriously, step by step…scrutinized the affairs of individual companies, made agreements with businesses, and helped our national manufacturers.”

Putin himself turned out to be pleased with his work on the crisis. He assured viewers that “the peak of the crisis has been overcome,” although “turbulent phenomena in the world economy, and consequently also in Russia, do remain.”

Despite a nearly 9 percent fall in GDP, a 13 percent fall in industry, and growing inflation, Putin listed a 0.5 percent growth in agriculture and a rising birth rate as commendable compared to the government response to the economic crisis in 1998.

Putin on Terrorism

In the wake of last week’s bombing of the Nevsky Express luxury train, which authorities are calling a terrorist attack, Putin addressed the problem of terrorism in Russia on the whole. “We’ve done a lot to ‘break the spine’ of terrorism, but the menace has not yet been eliminated.”

“It raises the question,” he said, “can we prevent crimes of this type? Our country is enormous, our territory is large, and there is a lot of infrastructure. Nevertheless, we need to work effectively. We need to be on the advance.”

Putin Saves Pikalevo, Again

Among sites chosen to host camera teams to field questions live to the prime minister was Pikalevo, one of Russia’s so-called “mono-towns” dependent on a sole industry – in this case, aluminum. The majority of the town’s 21,000 residents lost their jobs when all three plants were shut down last winter, and the city shut off all heat and hot water in May. A massive protest erupted when the long-unpaid citizens blocked off a nearby federal highway and demanded Putin’s personal intervention. The Prime Minister responded with an embarrassing public chastisement of Oleg Deripaska, the oligarch owner of the largest of the three plants, and ordered him to negotiate a decision that would reopen the factories.

During the broadcast, a manager of the largest of the plants asked the prime minister whether he would return to the town. The reason that this might be necessary, he said, was that the promised negotiations had not yet been signed.

In response, Putin promised that he would travel to any place in Russia where he was needed. “If the situation demands it, I will go to you again, or to any other place at any different point in the Russian Federation – that is my duty,” That aside, Putin said he currently saw “no such necessity.” He promised, however, that the government had control of the situation and an agreement would soon be written.

Indeed, even before the end of the broadcast, reports came in that the agreement between Pikalevo and the company had been signed.

The United States and the WTO

At one point, host Ernest Matskyavichyus told the audience that many questions had come in regarding Russia’s inception into the WTO. In response, Putin abruptly pounced on the United States, blaming it for not annulling the Jackson-Vanik amendment, a piece of Cold War-era legislation intended to help Soviet dissidents and religious minorities emigrate to America. Russia now criticizes the amendment as anachronistic and harmful for trade relations.

Putin said the amendment is used by “representatives of various lobbies in the United States Congress” for “decisions of rather narrow and selfish sectoral economic problems.”

“Entry into the WTO remains our strategic goal, but we get the impression that, due to motives that we are aware of, several countries – including the United States – are hindering our entry into the WTO,” he concluded rather sharply.

Love for Belarus

One question focused on recent angry remarks that the totalitarian Belarusian President Alexander Lukashenko had aimed at Putin. “You were harshly criticized by Belarusian President Lukashenko. You don’t answer him. Why?” a viewer asked.

“Maybe it’s love?” Putin replied.

The prime minister added that he has very kind, warm feelings for the Belarusian people, and especially for its government. The Russian government, he said, imports nearly all Belarusian agricultural products and has given the country 3.5 billion dollars over the past two years.

Putin Clarifies his Relationship with Tymoshenko

The prime minister’s position on upcoming presidential elections in Ukraine turned out to be less ambiguous than four years ago, when the Kremlin supported Viktor Yanukovych.

“Why do you support Yulia Tymoshenko in the presidential elections in Ukraine?” one viewer asked.

“I do not support Yulia Tymoshenko in the presidential elections in Ukraine,” Putin replied. “I am cooperating with Yulia Vladimirovna Tymoshenko as the prime minister of the Ukrainian government,” stressing his role as a “humble servant” while also misstating his Ukrainian counterpart’s patronymic (which is actually Volodymyrivna).

Recent agreements concerning Russia’s sale to Ukraine of natural gas have raised speculation that the Kremlin would back Tymoshenko in the upcoming Ukrainian elections.

The Police

A recent slew of high-profile incidents has brought a renewed wave of criticism on Russia’s police forces, and one of the key questions in Thursday’s broadcast reflected this concern.

“The police are now out of favor, and every day there are reports of police attacks on citizens…Maybe, [we should] just dissolve them and create a police force from scratch?”

Putin began his response by saying that no police reform would occur in Russia as has occurred in Georgia and Ukraine.

“In Ukraine, our neighbors and friends have already had this experience. They dissolved what we call the GAI, the road services – nothing good came from this. Bribes increased, and there came to be less order on the roads,” elaborating no further on the situation in Georgia.

In general, Putin said, the police should not be excessively slandered. “I consider it unnecessary to smear all police officers with red paint,” he said, but noted that the reaction to police offenses should be “especially critical, fast, and severe.”

Media attention to problems with the police, which have long plagued Russia, was renewed in April when police chief Denis Yevsyukov killed three people and wounded six in a Moscow supermarket while drunk. Novorossiysky Major Aleksei Dymovsky drew unprecedented media attention in November when he posted two YouTube videos of himself discussing corruption that he had seen in the police force.

Khodorkovsky and Murder

For the first time since the 2005 arrest of oligarch and former Yukos CEO Mikhail Khodorkovsky, Putin allowed himself to comment on the controversial case. Khodorkovsky’s trial, in which he was sentenced to eight years in prison for oil embezzlement in the sum of 900 billion rubles (approx. $31 billion), is criticized as highly flawed and politically motivated. Until Thursday, no questions on the subject had been posed during a live broadcast.

“When will Khodorkovsky be released?” a viewer asked via text message.

“This well-known figure is in prison by the sentencing of the court. And the problem is not when he will be released,” Putin stressed, “but so that crimes of this type are never repeated among us,” referring to economic crimes.

The prime minister went on to say that the money resulting from the case went a housing and communal services reform fund that has helped 10 million Russian citizens. “If at some point this money was stolen from the people, it needs to be returned to those same people,” he asserted.

In an unexpected additionally commentary, Putin went on to accuse Khodorkovsky of murder.

Referring to chief Yukos security official Alexey Pichugin, currently serving a life sentence for conspiracy in several murders, Putin remarked that “nobody remembers, unfortunately, that one of the leaders of the security services of the Yukos company is in prison. What, you think that he acted on his own discretion, at his own peril and risk? He had no concrete interests. He is not the main shareholder in the company. It is clear that he acted in the interests and by the instructions of his bosses,” implying that Khodorkovsky had ordered the murders.

Putin for President, Again

Two questions were posed in regards to speculation that Putin might run for a third term as president in 2012.

“Don’t you feel like leaving politics with all its problems and live for yourself, your children, your family, and finally rest?” one viewer asked. “If that’s it, I’ll take your place, just give me a call.”

“Don’t hold your breath,” the prime minister replied.

The second question was from a St. Petersburg student, who directly asked whether Putin was planning to participate in the 2012 presidential elections.

“I’ll think about it,” replied Putin. “There’s plenty of time.”

Approximately an hour after this statement, an Italian reporter asked Russian President Dmitri Medvedev whether it was possible that both he and Putin would run for president in 2012.

“Prime Minister Putin said that he isn’t ruling out this possibility, and I’m also not ruling out this possibility,” replied Medvedev, who was at a press conference in Rome with Italian Prime Minister Silvio Berlusconi.

“We can agree in what way not to elbow each other, and make a rational decision for our country,” he asserted.

Putin and Stalin

At the end of the program, Putin answered a number of questions that he said he had chosen himself. One of these turned out to concern Stalin.

“Do you consider the activities of Stalin on the whole to be positive or negative?” the question asked.

Saying that he understood the “subtlety” of the question, Putin qualified his answer by saying that there were both positive and negative qualities to the dictator’s reign. “One cannot, in my view, make a judgment on the whole,” said Putin. He praised Stalin for successfully changing the country’s focus from agriculture to industry, and said that victory in World War II was Stalin’s achievement.

At the same time, he continued, these positives “were nevertheless reached at an unacceptable price.”

Putin called Stalin’s repressions, which killed an estimated 30 million people, “a fact,” saying that “millions of our fellow citizens suffered from them. Such a means of managing the government to achieve a result is not acceptable.”

“Here, Thank God, There Aren’t Any Elections”

Putin’s most significant slip of the tongue came the prime minister was asked whether his recent appearance in the hip-hop contest “Battle for Respect” was motivated by his falling ratings.

“Ratings have absolutely nothing to do with it. Here, thank God, there aren’t any elections,” he responded.

Elections in Russia are notoriously fraudulent. Regional elections on October 11 delivered sweeping wins for Putin’s leading United Russia party across Russia, continuing the political monopoly it has held since its conception in 2001. Observers noted massive electoral violations, including ballot stuffing and multiple voting with the same absentee ballot, much of which has been statistically documented. Medvedev himself has admitted that the elections were flawed and chastised United Russia for “backwardness.”

Compiled from reports by Gazeta.ru.

In a statement on Wednesday, Prime Minister Vladimir Putin said that theft of unpaid energy resources would result in a supply cut for the rest of the continent, which receives much of its gas through pipelines crossing Ukrainian territory. “If they pay us for supplies for domestic consumption, they’ll get them,” he said. “If they don’t pay…they won’t get them. If they don’t get them, likely, there will be siphoning from the export pipeline,” in which case the supply would be cut entirely.

The prime minister also stated that the controversial South Stream pipeline proposal, which would channel gas supplies through the Black Sea, would be able to “discipline” Ukraine.

At the beginning of November, Prime Minister Putin warned the Swedish government, currently presiding over the European Union, of possible problems with transit of energy resources to European consumers through Ukrainian territory. According to Putin, Ukrainian Prime Minister Yulia Tymoshenko blamed Ukrainian President Viktor Yushchenko for deliberately hindering gas payments to Russia despite being able to pay. Putin also cited Kiev’s gold reserves and statements from the International Monetary Fund as proof that Ukraine is not lacking in available funds.

Millions of consumers in Europe were left without gas for two weeks last winter when Russia followed through on a threat to cut supplies, blaming Ukraine for siphoning gas when their own supply was cut due to unpaid fines.

Shortages may come about if the Russian neighbor does not stock-up on enough natural gas, Sechin said, warning that Ukrainian gas infrastructure may not be sufficient in any case.

“If this is not done, the tragedy that we lived through in January will develop catastrophically,” Sechin said.  In January, Russia accused Ukraine of stealing gas for domestic use, and cut off gas supplies to the country.  Around 80 percent of Russia’s European-bound gas travels through Ukraine, and the shut-off caused widespread shortages across the continent.

Sechin said the EU and Russia must work together to help Ukraine update its transit network.  Russia had earlier been excluded from a EU-backed deal to develop Ukraine’s energy infrastructure.

Sechin added that shortages of oil may ensue if Ukraine goes through with plans to re-work the Odessa-Brody pipeline and reverse its flow, cutting Russia from the pipeline.  The Deputy Prime Minister also criticized the Energy Charter Treaty, which he said failed to help in the winter gas dispute.

Piebalgs, meanwhile, responded to Sechin by asking him not to over-dramatize the situation.

“The Energy Charter treaty will continue to live its life until the countries that established it decide differently,” he said.

—

Political Analyst Stanislav Belkovsky, president of the National Strategy Institute, commented on Sechin’s statements for the Grani.ru online newspaper:

Igor Sechin’s declaration, just like Prime Minister Vladimir Putin’s earlier speeches, have most of all an air of hysteria.  Russia’s leaders have been warned for many years that no good would come from their strategy of aggressive incompetence, which they have adhered to in their energy policy.

In January 2009 is was completely clear that another gas war, launched by Russia at the drop of a hat, would lead to a sharp intensification in construction of gas transport routes around Russia.  This is precisely what has happened.  If before January, the EU-Ukraine project was regarded simply though a political angle, then today it is a priority zone for the European Union’s economic interests.  The same can be said about the Odessa-Brody oil pipeline, whose use in direct deliveries has traditionally been considered economically unsound.  At first, the economic reasoning for building the Odessa-Brody pipeline was weak.  From a business point of view, it is noncompetitive as compared with the alternative Russian route, and this is precisely why it has only been used in the reverse (backwards) mode in recent years.

But now, when Europe has become tired of depending on the whim and incompetence of the Kremlin, the Russian Government, and Gazprom, it is plain to see that construction of the Odessa-Brody pipeline has new significance.  And even if the economic feasibility is lacking, the EU will do everything to force it to work in the opposite mode.

The new energy conception, proposed by Moscow as an alternative to the Energy Charter, is consciously weak and purely declaratory.  If anyone in the Russian Government thought that the EU would look at it seriously, then this can again be traced to incompetence.

The many years of childish, I’m not afraid of this word, approaches to the world energy market have undermined Russia’s positions as an energy supplier to Europe, have discredited Gazprom and its leadership, and have discredited the state oil companies.  Emerging out of this simply through emotional pressure on European bureaucrats, including EU Energy Commissioner Andris Piebalgs, won’t work.  It is clear that Russia must reconsider its strategy of market conduct in the energy sector.  Another question: is there time for this?  Possibly, there isn’t any left.  And it’s completely evident to me, that neither Igor Sechin, nor Vladimir Putin, nor Alexei Miller are capable neither of formulating a new strategy nor lobbying it through.

translation by theotherrussia.org

The summit, which the European Union dubbed the “last and best chance” for the two countries to keep their reputations as reputable gas suppliers, was the last in a series of failed attempts to end a protracted gas dispute. Countries in the EU and Eastern Europe have had gas supplies cut, and consumers and industry have lost power and heat in the dead of winter. The talks marked the highest-level negotiations over the dispute, as Russian Prime Minister Vladimir Putin met with Ukrainian Prime Minister Yulia Tymoshenko and officials from their two respective national gas companies.

Medvedev said that it was improper to speak about yielding on the price Ukraine pays for Russian gas, one of the major issues in the dispute. “We cannot talk about some kind of compromises,” he told reporters, “and on the contrary, we need to talk about working in a civilized, measured way, based on those European prices that other countries work with.”

Instead of reproaching each other, the disputing sides should create an “effective mechanism of defense against these situations,” Medvedev said.

The president declined to comment on the theory that the current gas crisis was somehow influenced or protracted by the American presidential administration. “I am not a proponent of conspiracy theories,” he said, “and I won’t speculate now about anyone’s role or influence in [the conflict].”

The crisis in Russian-Ukrainian contractual relations on the delivery and transit of natural gas first started at the end of December 2008. The two sides first failed to agree on a way to resolve Ukrainian debt to Russian gas monopoly Gazprom, and could not reach a compromise on gas and transit prices for 2009. Ukraine paid Russia 1.5 billion dollars for past debts, but did not pay a controversial $614 million in alleged fines. As result, Gazprom cut gas deliveries to Ukraine on January 1st, while continuing shipments through the country.

Russia then accused Ukraine, a major transit route of gas supplies bound for Europe, of siphoning off gas for its own customers. All gas shipments through Ukraine were completely cut on January 7th.

The drop in Russian gas deliveries has led to emergency conditions in a number of European countries. Bulgaria, Greece, Turkey, Macedonia, the Czech Republic, Austria and Slovakia, which receive all their natural gas from Russia, have had no new shipments, and have eaten through their reserves. Volumes have also dropped significantly for Romania, Hungary, Poland, Germany, France and Italy. Several Eastern European countries have been forced to take emergency measures to conserve gas, shutting factories, closing schools and delivering heating only intermittently to some residential neighborhoods.

Writing for the Grani.ru online newspaper, Nikita Varenov examines Russia’s position in the talks, arguing that Russia may ultimately pay for the consequences of the energy scare.

Frost and War Bosses
Nikita Varenov
Grani.ru
1/7/2009

There is so much politics in the contractual relationships of Russia, Ukraine and the European Union on the issue of [natural] gas deliveries, that the emerging crisis can’t be understood as an argument between two business entities. Nonetheless, its resolution lies precisely there– there are national laws and international agreements, there are signed contracts. And one needs to read them to understand who is formally correct in the current situation. The different sides will do just that during negotiations this Thursday.

But a newly formalized gas transport reality isn’t the only result of the current conflict. The European Union, where factories have stopped working, schools have closed, and the heating supply has been interrupted as result of gas shortages, will not forgive one of the sides, it stands to reason. The likelihood that this will be Russia is fairly great.

The point is that as a consumer, the European Union is indifferent to the underlying reasons for the conflict. The restoration of uninterrupted gas deliveries is important for the EU, especially as a cold winter sets in. Ukraine can likely be charged for dishonest transit, especially if it is proven that gas theft actually took place. But Russia’s fault before the European Union is much greater: a producer and first order supplier cut shipments after failing to settle differences with a intermediary.

One cannot say that Gazprom is completely unprepared for the situation that arose. Reserves have been pumped into underground storage tanks on the territory of Europe. Additional volume is moving by alternate routes – through Belarus and the floor of the Black Sea. But in the end, this does not take the blame off Russia: shipments to ten friendly European countries have stopped completely; [shipments] to the rest have been cut by more than half.

Everything has been done tactically right at Gazprom, but the corporate group in principle lacks a strategy to diversify its distribution channels. A year ago, Russian humorists were already joking about a Ukrainian New Year’s [holiday] with gas-free champagne. But in 2008, nothing was done to ensure that in 2009, Europeans would have gas bubbles in their champagne.

Why it wasn’t done is a separate question. Relations with the Baltic countries have been built on discussing the results of the Second World War for decades. On the Belarussian front, Russia was more concerned in 2008 with twisting Lukashenko’s arms, so that he would finally recognize the independence of two semi-criminal enclaves in the Caucasus. In the last case, a reduced price for gas, by the way, was one of the levers of pressure (and this lever didn’t work largely because of Ukraine’s intractability –Moscow didn’t go for a conflict with two intermediaries at the same time.) In the Caucasus, finally, Russia managed to destabilize the situation to such an extent in the past year, that projects for a direct gas line from Turkmenistan are no longer being discussed (whether they bypassed Russia or not is already unimportant).

Of course, most problems in international relations go outside the realm of Gazprom’s authority as a commercial entity, but the point is that the gas group is not simply a commercial entity in the Russian economy and in Russian foreign policy. Russia (and Gazprom as a de facto government ministry) doesn’t tire of swinging its baton, trying to force its will on its neighbors without considering the costs. The start of Dmitri Medvedev’s presidency has been marked by this path, and it no longer matters how liberal he is on the inside.

The conflict in Georgia raised a boisterous reaction from Europe, but nonetheless had only peripheral meaning for it. Neither the severe Angela Merkel, nor the pragmatic leaders of Eastern Europe, nor the accommodating Nicolas Sarkozy, and especially not the ultra-loyal Silvio Berlusconi, initiated any real steps to pressure Russia then. Partly because of that infamous energy-dependence, however cynical that may sound. Today, when it’ll be the European voters freezing, and not the Georgian ones, their leaders will clearly be firmer.

The energy dependence, of course, won’t go anywhere. For now. And the European Union’s strategy to get rid of this dependence will definitely not go anywhere either. One of the possible steps to take when failures happen in the supply chain is to get rid of the middleman. How could the EU get rid of the Ukraine in its present guise? Accepting it into its group, for instance. Would the Russian authorities have the gall to eternally scare an EU member country with frost?

Not to mention that Russia needs a great deal from Europe. Europe isn’t just a market for Russian gas, but for countless other types of raw commodities and goods. And in many cases, unlike gas, they can be substituted, especially if there were a united political will for it.

Finally, that same gas is only valuable when it is being bought. Side by side with oil it is one of the major sources that replenish the Russian [currency] reserves, whose amount in times of crisis is especially important for the authorities. That being said, the prices for gas, unlike those for oil, don’t bounce by 5 percent a day. Taking into account the losses from January’s forced down time, even an insignificant reduction in the volume of future purchases is capable of reflecting critically on Gazprom’s incomes.

The parties will already start discussing new volumes, conditions and prices tomorrow. The EU has joined in the negotiations between Russia and Ukraine in a directive capacity. And Russia’s position at these negotiations doesn’t look quite so strong as it seems at first glance.

translation by theotherrussia.org

The accusation comes as negotiations on gas shipments and pricing continue to stall. Russia cut gas supplies to Ukraine on Thursday, and earlier accused the country of attempted blackmail over price negotiations.

The Ukrainian state gas company, Naftogaz, denied that it was siphoning Russian gas, and the Ukrainian government promised that gas flows to Europe would not be interrupted.

Around 25 percent of Europe’s gas supplies come from Russia, and 80 percent of that comes through Ukrainian pipelines. Responding to fears that European supplies could be cut, the Czech Republic, which currently holds that European Union Presidency, called for crisis talks.

“Energy relations between the EU and its neighbors should be based on reliability and predictability,” the Czech presidency said in a statement. “We feel that the situation has now escalated to a point that substantiates an extraordinary meeting.”

Gazprom also announced Friday that Naftogaz would pay 1.5 billion dollars in outstanding fees by January 11th, but underscored that it was still owed 614 million dollars in penalties. No agreement on 2009 supply had been signed, the company said.

Russia has been accused of using gas flows as a lever of political pressure against Western-leaning neighbors, and last cut supplies to Ukraine in 2006. The latest spat may damage Russian credibility as a stable supplier of natural gas.

Gazprom CEO Alexei Miller said Thursday that Ukraine should pay 418 dollars per thousand cubic meters (tcm) of natural gas, up from 179.50 in 2008, and up from Gazprom’s first proposal of $250 per tcm. Naftogaz has said it cannot pay more than $235 per tcm for the gas.

For the moment, Europe is safe from any short-term after-effects of the break in negotiations. With warm weather ahead, existing supplies are expected to last for at least one month.

The press-service of Russia’s Prosecutor-General’s Office reported that Wolodymyr Satsiuk, or Vladimir Satsyuk, has Russian citizenship, and therefore cannot be extradited.

According to the Podrobnosti internet-newspaper, the Ukrainian office of Interpol was not aware that Satsyuk had been re-nationalized in Russia. “As of today, we did not receive any such information,” said Vasiliy Nevolya, a senior figure in the National Interpol office.

Satsyuk, a former deputy-head of the Ukrainian security service, is also facing charges of forgery and abuse of office, and an extradition request was sent in April 2008.

Victor Yushchenko fell extremely ill in September 2004, shortly after a reception and dinner with security officials. Yushchenko, then an independent presidential candidate, suffered a number of symptoms, ranging from acute pancreatitis to facial nerve paralysis, and became heavily disfigured. Doctors later confirmed that he was poisoned with dioxin, likely administered orally.

Satsyuk is one of a number of Ukrainian officials sought in line with the poisoning investigation. Many of them are believed to have fled to Russia.