What the Russian papers say

© Alex StefflerWhat the Russian papers say
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United States resets relations with Russia's post-Soviet neighbors / Emerging Customs Union still faces problems / Russia joins convention on paid holidays / Russia celebrates Day of Family, Love and Fidelity / Increased social spending an economic trap /

Kommersant

United States resets relations with Russia's post-Soviet neighbors

The main goal of U.S. Secretary of State Hillary Clinton's tour of Ukraine, Poland and three South Caucasus republics over the July 4th U.S. Independence Day holiday weekend was to strengthen shrinking U.S. influence and to support the planned Nabucco gas pipeline which will bypass Russia.

Her visits showed that despite the U.S. policy of resetting relations with Russia, the United States does not want Ukraine, Azerbaijan, Armenia or Georgia to remain a zone for Russia's exclusive interests.

Clinton's visit was reminiscent of last year's tour of the region by Vice President Joe Biden, who went to Ukraine and Georgia after President Barack Obama's Moscow visit to hint that Washington will not sacrifice its allies to reset relations with Russia.

U.S. positions in the region have weakened since then. Ukraine's new president Viktor Yanukovych has signed an agreement with Russia to prolong the deployment of its Black Sea Fleet in the Crimea until 2042. Not a single U.S. official has visited Ukraine since Yanukovych took office on February 25.

The United States still wants to deploy ballistic missile defense systems in Poland.

This is the first time Clinton visited the three South Caucasus republics as Secretary of State. The United States has been unable to find a suitable ambassador to Azerbaijan for a year, which displeases Azerbaijan.

Clinton has not resolved the countries' problems during her short tour made soon after the U.S. visit by Russian President Dmitry Medvedev.

Philip Gordon, Assistant Secretary of State for European and Eurasian Affairs, said before her visit that Clinton was going there "to reiterate and demonstrate" that "the better relationship with Russia does not come at the expense of our relationship with sovereign, independent countries that are near Russia."

Clinton's visit to Ukraine showed that this is indeed so. She met with Yanukovych to discuss the strengthening of Ukraine's relations with the West and reaffirmed NATO's willingness to admit Ukraine.

On the first day of her visit, the IMF mission announced that the organization, in which the United States has the decisive say, was ready to grant $14.9 billion to Ukraine.

Ukraine's Foreign Minister Kostyantyn Gryshchenko said he discussed diversifying nuclear fuel sources for Ukraine's nuclear power plants with Clinton.

In June, Ukraine signed a contract with Russia's Tvel designating Russia the monopoly supplier of nuclear fuel. Clinton's visit might give hope to U.S. Westinghouse, which previously supplied fuel to the South Ukrainian nuclear power plant.

 

Vedomosti

Emerging Customs Union still faces problems

On Tuesday, the Customs Code of the Russia-Kazakhstan-Belarus Customs Union will be enacted in all three countries.

On Monday, the Russian, Kazakh and Belarusian presidents confirmed Minsk's decision to join the Customs Union at the EurAsEC summit in Astana. Tajikistan and Kyrgyzstan also expressed a willingness to join.

Medvedev, Nazarbayev and Lukashenko tried to show that key disagreements have been eliminated. They highlighted the importance of integration and said they were confident it would succeed. Notably, Medvedev believes that "our entity has entered the advanced integration phase."

In 2009, Russia's trade with Belarus and Kazakhstan dwindled 1.5 times, from $34 billion to $23.4 billion and from $19.7 billion to $12.8 billion, respectively.

Joint customs regulations that allow products manufactured by Customs Union countries to travel freely inside union borders can promote economic expansion and cooperation.

Analysts say union members could earn tens of billions of dollars in profits. Moreover, the union is a key element of a common economic space, which politicians believe should become a European Union-type entity for the CIS.

However, the first days of the new Customs Code's operation show that substantial efforts will be required to harmonize the rules. For instance, Russian customs houses stipulate tougher product-cost evaluation terms than those in Kazakhstan. Importers of Chinese consumer goods can take advantage of this.

The union members envisioned a 12-month transitional period making it possible to charge lower vital customs duties than their partners.

"Advanced integration" does not mean an end to mutual price and trade wars. For example, Moscow says it can still introduce a 30% export duty on natural gas being delivered to Belarus. Russia could also raise export duties on crude oil and round timber being processed in neighboring countries and sold for higher added value.

Customs Union countries also differ considerably in terms of their tax, arbitration and civil legislations, as well as penalties for economic crime. Notably, Russia and Belarus stipulate 12-year and four-year prison terms, respectively, for commercial bribery, as well as ten and five years, respectively, for divulging commercial secrets. The illegal use of trademarks is punishable by six and two years in prison, respectively.

The Customs Union has been established, but does it operate? Will the common economic space be established by late 2011, and will it single out exceptions? The questions remain.

 

Rossiiskaya Gazeta

Russia joins convention on paid holidays

Russia has ratified the Holidays with Pay Convention, which requires some changes to Russian legislation and practices.

This means that everyone will have to take two weeks off and use up any remaining leave by mid-2012 at the latest.

The Holidays with Pay Convention (No.132), which the International Labor Organization adopted in 1970, is in a way a closed chapter. It says, for example, that an employee's leave cannot be shorter than three weeks every year. Russia's 2001 Labor Code set the minimum leave at 28 calendar days, while previously it was 24 workdays. Together with Sundays, it totaled the same 28 days. This raises the question of why Russia has spent 40 years postponing its ratification.

"The Convention has one point which caused concern in Russia," says Vitaly Savin, an expert on ILO affairs. "It has to do with the possible breakup of an annual paid vacation into parts and their use in subsequent years. A competent authority of the signatory country can allow the breakup, but the Convention says that one of the parts cannot be less than two continuous working weeks. That suits neither employers nor workers."

In principle many companies have already made it a point of dividing the vacation into two or three parts. But people sometimes do not manage to take all the time due to them off and days of leave accumulate, sometimes up to several months. Now that will be different: an employee must take at least two weeks off in succession in the course of a year, with the rest to be used up within 18 months counting from the end of the year for which the leave is granted. When the instrument of ratification reaches ILO, no one in Russia will be able to slice their vacations into several tidbits.

So far, only 35 out of 183 ILO member-countries have joined the Convention. The overwhelming majority, including developed countries, are not prepared to demand that their businesses grant their employees even a three-week paid vacation. The non-signatories include the United States, Canada, France, the United Kingdom and many others. Among the 35 signatories, together with Russia, are Germany, Sweden, Spain, Finland, Belgium and Italy, as well as Yemen, Malta, Burkina Faso, Uruguay, Armenia, Ukraine and others.

 

Izvestia

Russia celebrates Day of Family, Love and Fidelity

Russia's First Lady Svetlana Medvedev visited Murom. On July 3, the town celebrated its 1148th anniversary, which coincides with the Day of Family, Love and Fidelity.

The rest of Russia will celebrate the holiday patronized by the First Lady on July 8, the day of Sts. Peter and Fevronia of Murom, the patrons of family and marriage.

Murom, the city where the bodies of Sts. Peter and Fevronia are buried, is the birthplace of Russia's national Day of Family, Love and Fidelity. Its residents collected 35,000 signatures in support of introducing this new holiday three years ago. State Duma deputies backed the initiative and it became an official national holiday in 2008. The Day of Sts. Peter and Fevronia is often compared with St. Valentine Day.

Now many regions celebrate the Day of Sts. Peter and Fevronia. Patriarch Kirill has blessed the holiday. The relics of Murom's saints were kept in the Church of the Nativity of the Mother of God until 1919, when the church was demolished. The relics were then made part of an "antireligious exposition" but people continued coming to pray to them. Employees of the Murom History and Art Museum took care of the relics for a long time and later gave them over to the St. Trinity Monastery.

The legend of Prince Peter and peasant girl Fevronia has always been popular, the museum's chief researcher Olga Sukhova says. Based on a folktale, the life of these two saints was fixed in writing in 1547 as the widely known Tale of Peter and Fevronia of Murom.

The popularity of Peter and Fevronia is on the rise. Daisy, with which the entire Murom is decorated, has become the holiday's symbol. The celebrations of Murom Day began with distributing the medal For Love and Fidelity to large families. According to Tatyana Shumova, a member of the holiday's organizing committee, 5,000 applications have been filed this year from Russia and 40 other countries.

Russia's First Lady Svetlana Medvedev, the organizing committee's chairperson, visited the ancient town in the Vladimir Region as well. Svetlana Medvedev attended a concert celebrating the Day of Family, Love and Fidelity. A large stage was constructed right on the bank of the Oka River and several thousand people attended the concert. The celebrations ended with colorful fireworks late at night.

 

Nezaivismaya Gazeta

Increased social spending an economic trap

Russian authorities have created strategic problems for themselves by assuming high social obligations. By spending more money to increase pensions and to honor other social commitments, they have provoked a budget deficit which can only be covered by energy revenues or further barrowing..

President Dmitry Medvedev said in his Budget Address that the budget deficit must be halved to 3% in 2013 from 6% in 2009.

It is not clear how to finance this declaration because nobody will dare raise taxes in a pre-election year, analysts say. Neither can the authorities reverse the increases in social payments and allocations. They can only pin their hopes on foreign borrowing or the possible growth of oil prices, even though Finance Minister Alexei Kudrin has warned that the growth of oil prices could stall and that the price might fall to $60 or even lower.

The authorities are searching for additional resources. The Finance Ministry has proposed raising the extraction tax, the gas production tax by nearly 130%, which should add about 260 billion rubles ($8.4 billion) to the budget. At the same time, Gazprom's budget would become leaner by the same amount.

As much as 40 billion rubles ($1.3 billion) could come from the standardization of duties on light and dark petrochemicals at 60% of the oil price, which the Finance Ministry has proposed introducing on January 1, 2011.

Taken together, these measures would contribute an additional 300 billion rubles to the budget, which is next to nothing given this year's expected budget deficit of 2.4 trillion rubles ($77.2 billion), or 5.4% of GDP.

Most countries cut spending, including social programs, during the global economic downturn but Russia continued to increase it. Reducing a budget deficit is almost impossible if you keep spending lavishly on social commitments.

This policy could push Russia into a trap from which the country's future leaders will have to get out.

Pessimists say Russia's reserve funds will run out by 2013; unless the government covers the budget deficit, it will have to borrow on the domestic and foreign markets. These funds could have been invested in modernization, which means a budget deficit is hindering Russia's economic development.

 

RIA Novosti is not responsible for the content of outside sources.

MOSCOW, July 6 (RIA Novosti)

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