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What the Russian papers say

09:00 24/07/2006

MOSCOW, July 24 (RIA Novosti) AvtoVAZ looks to Porsche/ Hawks take over in Georgian government/ Tallinn mayor and Estonian PM clash over Soviet monument/ Yushchenko silent as deadline looms

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Vedomosti

AvtoVAZ seeks a replacement for the French

The management of Russia's leading automotive concern AvtoVAZ has decided the Russian car market must stay Russian and refused to sell a blocking stake in their plant to Renault. Experts told the paper this had put an end to a joint venture with the French concern. Instead AvtoVAZ is planning a new C-class car platform with Porsche Engineering Group.
"AvtoVAZ will not sell its shares to France's Renault," Vladimir Artyakov, AvtoVAZ chairman, said on Friday. "We have looked at the situation [with Renault] purely from an engineering point of view," he said. "AvtoVAZ was only interested in the joint development with the French of a new platform, and it is now being negotiated," an AvtoVAZ top manager explained Artyakov's words.
Negotiations between AvtoVAZ and Renault were initiated by former AvtoVAZ head Vladimir Kadannikov. After they took over at the plant in December, Rosoboronexport managers resumed them in spring. In June, Artyakov visited Paris to talk with Renault Nissan president Carlos Ghosn. Renault offered to buy no fewer than 25% of Russian shares, promising to set up a joint venture to assemble 450,000 cars a year based on its cheapest model, the Logan.
Experts said the offer was highly attractive for AvtoVAZ. Deutsche UFG, in a special report, highlighted the benefits such as access to modern technologies and "advanced Western management experience." But selling a blocking stake would have meant giving up control of the Russian car market to foreigners, Igor Yesipovsky, AvtoVAZ director-general, told Vedomosti. He said AvtoVAZ had better offers than the Logan.
Another source close to AvtoVAZ said the management was not pleased either with Renault's bid to purchase the shares at market price. On Friday, the plant's RTS capitalization stood at $1.7 billion, and the AvtoVAZ and Rosoboronexport managements thought it was underestimated.
AvtoVAZ is not fixated on Renault, however. In spring the plant had talks with PSA Peugeot Citroen, and is now thrashing out a deal with Porsche Engineering Group (PEG) to develop a new C-class car platform and a matched engine, a source in the AvtoVAZ management told the paper.
PEG had a hand in developing the VAZ Model 8. Porsche is also expected to undertake the engineering of further models, another top manager of the auto concern added. Besides, Rosoboronexport chief Sergei Chemezov prefers the option of cooperation with Porsche, the Rosoboronexport top manager told Vedomosti. Porsche would not comment on its client relations, a company spokesman said. Renault likewise declined to comment on Artyakov's and Yesipovsky's statements.
But experts told the paper they were certain that the French deal was off. The purchase of shares would have guaranteed Renault a role in putting together an AvtoVAZ strategy and pricing policy, said Aton analyst Tatyana Kapustina.
Sergei Alekseichuk, an independent car market expert, said that the Logan was a direct rival for Lada models and the French should take the view that it would be pointless helping a competitor free of charge and sharing technologies with it.
Kapustina said ideology was behind the refusal to sell: AvtoVAZ managers are hugging the idea of a national car. This, she says, is a mistake, because it is always better to buy a ready-made model than spend good money on development. A spokesman for one of the auto groups estimates that every model developed from scratch with Porsche will cost AvtoVAZ minimum $300 million.

Vremya Novostei

Hawks take over in Georgian government

The Georgian parliament will approve a new government on Tuesday because Giorgi Khaindrava, state minister for conflict resolution, was dismissed Friday.
The scandalous news about the sacking of Khaindrava, who had been in government since March 2004, overshadowed President Mikheil Saakashvili's refusal to attend an informal Moscow summit of the Commonwealth of Independent States on the weekend.
Political scientist Paata Zakareishvili told political daily Vremya Novostei the dismissal of Khaindrava showed that "the Georgian authorities will pursue an aggressive policy toward [the breakaway regions of] Abkhazia and South Ossetia."
The first "important change was the appointment of Irakly Alasaniya, the presidential envoy for Abkhazia, to the post of Georgian ambassador to the UN in July," Paata said.
"The dismissal of Giorgi Khaindrava completed the removal of the most liberal politicians from conflict resolution. This policy may provoke a new military clash with Abkhazia and South Ossetia. The authorities think they can scare Abkhazes and Ossetians. But this policy will not help them attain the goal."
The self-proclaimed republics see the dismissal of Khaindrava as an alarming sign. The paper's sources there said the former minister firmly upheld Georgia's stance but rejected the use of military force to resolve the conflicts.
The Georgian opposition claims that Khaindrava was a loose cannon in the government. Last fall he took the side of Foreign Minister Salome Zurabishvili, who was dismissed for disagreeing with the presidential team. In early July he said that if he were the interior minister, he would have resigned over a scandal connected with the murder of a banker in which the ministry's officials were implicated.
Last week the minister said the military police of the Georgian Defense Ministry violated the Vienna Convention on Diplomatic Relations by detaining a car of the Russian Embassy that was moving from South Ossetia to Tbilisi on July 16.
Although Khaindrava said General Valery Yevnevich, who was in the car, provoked the incident, Defense Minister Irakli Okruashvili told the maverick minister to play the team game or get packing.
It became clear that the president would have to choose between Khaindrava and Okruashvili. He chose the 33-year-old defense minister, the leader of "the party of war" and the main "hawk" in Georgia.
Khaindrava learned about his dismissal from journalists, who told him he was to hand over his papers to Merab Antadze, deputy foreign minister for relations with Russia.
Okruashvili's stance will be strengthened this week, when the Georgian parliament is expected to increase the military budget by $123 million to $350 million in 2006, a record figure for Georgia.

Rossiiskaya Gazeta

Tallinn mayor and Estonian premier clash over monument

A debate about the future of a monument to Soviet soldiers in the center of Tallinn has escalated into an open conflict between Mayor Juri Ratas and Estonian Prime Minister Andrus Ansip.
On Sunday, Ratas officially informed Ansip that the municipal authorities had refused to tear down the monument.
Ratas said it would be unwise to tear down the monument because society was divided on this issue. This is not a mere assertion because the Tallinn City Council has ruled by a majority vote that the monument, which was erected in central Tallinn in 1947, must remain where it is. Ratas said it is impossible to exhume soldiers' remains and to dismantle the monument because of unsettled legal and financial issues.
Ansip, who previously asked Ratas to dismantle the memorial, said the monument and the soldiers' grave, which he said symbolized Soviet rule and occupation, did not belong in central Tallinn.
The Estonian government cannot remove the monument without the consent of local authorities because it and the common grave belong to Tallinn. Though they are protected by the state and listed as historical monuments, Ansip wants to get rid of all signs of the Soviet past.
Workers started preparing to dismantle the Tallinn monument in the early hours of July 23 because Ansip apparently expected no refusal from Ratas.
The conflict around the monument flared up May 20, when a rally of radical nationalist organizations demanded that it be removed. Volunteers from some Estonian public organizations decided to guard the monument, which is also known as the Bronze Soldier and has repeatedly been vandalized. The police cordoned off the monument.
Russian leaders have spoken out on the issue. Transport Minister Igor Levitin told Ansip Saturday that Moscow was concerned about the monument's future because its removal would signify revising World War II.
Levitin said the monument has great significance for all Soviet war veterans and for their children now cooperating with Russia. Ansip said every state had the right to decide on the placement and relocation of monuments.

Nezavisimaya Gazeta

Yushchenko's silence

The 60-day deadline for Ukrainian parliamentarians to set up a majority and form a government expires today. The first objective has been accomplished - with difficulty though - and there is parliamentary majority, but things are worse with the government; and the president has been so far unable to appoint a prime minister.
Pressed for the time, the anti-crisis coalition is doing its best to dramatize the situation. According to representatives of the Party of Regions, the parliamentary majority has almost compiled the list of new government members. However, the party's Taras Chornovil said it had not been made public to protect the ambitions of some politicians. The intrigue concerns members of the Our Ukraine Party who are seeking government positions, including outgoing Prime Minister Yuri Yekhanurov, Economics Minister Arseny Yatsenyuk and MP Anatoly Kinakh.
The Ukrainian president's traditional radio address to the nation did not clarify the situation. He said he would be governed by legislation and meet the deadline for announcing his decision on the candidacy for prime minister and a possible dissolution of parliament. Everybody wonders what the deadline is. The 60 days the law sets for the formation of the government expires today, and the candidacy for prime minister should be considered by August 1. Experts told the paper Yushchenko would postpone his decision until after the deadline.
Today, the president's behavior is being interpreted as an attempt to outplay his political opponents. Counterbalances in the personnel policy would prevent the Party of Regions from gaining absolute power, with parliament's current composition intact. Our Ukraine reportedly wants some 10 leading portfolios in exchange for appointing Yanukovych as prime minister, including the posts of deputy prime minister, justice, interior, economics, industrial policy, fuel and energy, sports and youth policy ministers. There has been no information so far if the Party of Regions will make such a compromise.
Viktor Nebozhenko, the head of the Ukrainian Barometer sociological service, said: "If the Party of Regions insists on taking full control of the executive branch, which now belongs to parliament, the president will not nominate Viktor Yanukovych for the post."
The expert said the Party of Regions might lose out if it continued to be capricious. "Political power belongs to the president now," he added.

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