MOSCOW, April 2 (RIA Novosti) Russia-Europe relations are doomed to stagnation - expert/Europe to see new trouble spots after Kosovo's independence/Bid to diminish future president's status begins - political experts/PricewaterhouseCoopers may shut down business in Russia/Rosneft pays Yukos debt
Nezavisimaya Gazeta
Russia-Europe relations are doomed to stagnation - expert
An article by Russian President Vladimir Putin on the 50th anniversary of the European Union and the Foreign Policy Review compiled by the Russian Foreign Ministry and the Kremlin administration have suggested that Russia's relations with the European Union, its largest trading partner with a shared cultural heritage, forecast a lengthy period of stagnation, a Russian expert writes in a popular daily, Nezavisimaya Gazeta.
Yekaterina Kuznetsova, director of European programs at the Russian Center of Post-Industrial Research, writes that the two publications have dashed the hopes of Russians who set their eyes on Europe.
Advocates of "sovereign democracy" are jubilant: Putin has for the first time openly said that Russia does not intend to join the EU or have any form of association with it.
According to Kuznetsova, Russian resentment, as expressed by Putin in his speech at the security conference in Munich, has logically turned into a desire to strengthen the country's independence and self-sufficiency.
In effect, the president has politely proposed parting ways with Europe and limiting contacts to bilateral relations with EU members, while maintaining a semblance of cooperation or even partnership.
In his article, Putin has explained everything but the main point, the expert writes. He did not say why Russia would not participate in European integration, or at least draw closer to the EU. He said Russia decided not to do so "for obvious reasons."
The Foreign Ministry's Foreign Policy Review provides a striking confirmation of our suspicions. According to it, although the drafting of a new fundamental treaty between Russia and the EU is at the top of Russia's agenda, the parties may prolong the existing treaty, adding: "That is, in any case, the EU's problem."
Is Russia prepared to leave the elaboration of a vital document, such as the treaty of strategic partnership proposed by Putin, to its European partners?
In that case, it should not expect as much as a mention of Russia's interests in the draft, Kuznetsova warns. That will happen if the Russian authorities push the country into self-isolation and refuse to interact with the EU as an organization, opting for bilateral relations with its members.
A state can succeed on the international scene only if it can correlate its goals with its possibilities, and choose effective methods for attaining those goals, the expert writes.
A refusal to promote relations with Europe - relations that stipulate the streamlining of economic competition standards and legislations - contradicts the interests of Russians. However, Kuznetsova writes, that policy will apparently benefit the authorities and big business.
Vremya Novostei
Europe to see new trouble spots after Kosovo's independence
Many believe that the haste in proclaiming Kosovo's independence has to do with the desire to resolve the problem and bring peace to the region. Somehow, no one seems to think that new trouble spots will emerge in Europe after this move.
The principles of international law have been consistently violated where the Balkans are concerned, the work for a compromise has been unilateral and envisages concessions by one party only.
Now, Russia has found the strength to realize that the solution of the Kosovo problem offered by international organizations and NATO continues past traditions, when decisions were imposed, ultimatums delivered, the possibility to adjust the wording of an agreement denied, lack of time simulated and tough deadlines set.
That was the case when sanctions were introduced against Yugoslavia in 1992, when there were talks on Bosnia and Herzegovina in Dayton in 1995 and on Kosovo in Rambouillet in 1999.
If Russia cedes again, such practices will become the norm. So it has taken a tougher position, objecting to decisions being imposed and advocating further talks.
Western countries believe that all possibilities for negotiations have been exhausted, although it is too early to speak of complete independence.
They do not mention that the territory's independence was planned long before and became a reality after 1999. After Kosovo is proclaimed independent, Europe will face new trouble spots in Macedonia, Montenegro, in southern Serbia (with the Albanian communities in Presevo, Medvedzie and Bujanovac).
Albanians in these countries will start fighting for their rights and independence following the Kosovo model. This will lead to new hostilities and the emergence of several Albanian states in South Europe. How many of them can Europe stand?
Gazeta, Novye Izvestia
Bid to diminish future president's status begins - political experts
Sergei Mironov, speaker of the upper house of the Russian parliament and known for his calls to allow President Vladimir Putin to serve a third term in office, has announced the need to amend an article of the Constitution.
Elected speaker for the third time last Friday, he again proposed that the president be allowed to stay beyond 2008 and that his term be extended from four to five or even seven years.
Observers' comments on the initiative of the politician, who recently founded his own party, A Just Russia, range from "ordinary pre-election speculation" to "the play against the future president has begun."
Political expert Gleb Pavlovsky said: "This is a normal pre-election statement that does not have any legal consequences. Mironov is seeking to reach Putin's electorate in an inexpensive way. He would like to conduct an election campaign not leaving the authorities' bed."
Another political expert who is ideologically close to the Kremlin, Vladimir Zharikhin, said it was not about Mironov or Putin.
"As soon as you recall Roosevelt, everyone says that he was forced to stay for a fourth term because there was a war on," he said. "But he stayed for a third term because it was necessary to complete the country's modernization. The important thing is not a concrete figure, but a continuation of his policies."
Even experts less dependent on the authorities indirectly agreed that it was the policy not the figure that mattered.
Valery Khomyakov, co-chairman of the Council on National Strategy, said: "What we are seeing now is a certain trend. For Vladimir Putin to remain influential even after he leaves his post, it is very important that the future parliamentary and especially presidential elections be dubious."
"Someone is already playing against the future president," he said. "He is being made weak already, although his name is not known yet. Then they will tell him: you will be the president, but all practical decisions will be made somewhere else. It is a preventive game to diminish his status."
Dmitry Badovsky of the Research Institute of Social Systems said that Mironov's move proved that the final decision about a third term had not been made yet.
"This is the last decisive struggle for a third term," he said. "After the reaction to it is gauged, the issue will have to be closed," he said.
Kommersant
PricewaterhouseCoopers may shut down business in Russia
The ruling of the Moscow Arbitration Court on PricewaterhouseCoopers Audit's illegal audit of Yukos, the embattled oil company, was unexpectedly tough. The court found the auditor a participant in illegal tax schemes, accusing it of violating professional standards.
That means that the company's auditing license, which expires May 20, may not be extended. Such developments will create serious problems for Russian companies planning an initial public offering, of which U.S. officials have already been warned by Moscow.
The court said that the auditor had information about Yukos's tax evasion, but did not disclose it to the company's shareholders and "assisted Yukos in carrying out its schemes."
The decision on license extension is made by the Finance Ministry. Its department for audit regulations is headed by Leonid Shneidman, who worked for PwC for over 10 years.
The department's supervisor, Deputy Finance Minister Sergei Shatalov, also worked for the company in the past.
Nevertheless, it will be difficult for the ministry "not to react to the court's decision and it has few possibilities to act at its own discretion," said Viktor Pleskachevsky, chairman of the parliament's property committee who is working on amendments to the law on audit activities.
"The court has done the preliminary work for the Finance Ministry, establishing the fact of audit standards violations," he said. "In these circumstances, the ministry can take a passive stand, not revoking the auditor's license, but not extending it either."
The PwC case has not only raised concerns on the Russian market, but also internationally. The U.S. administration has intervened. According to Kommersant's sources, America emphasized the "impeccable reputation" of the world's oldest audit company, which operates successfully in 140 countries.
It also warned that the revocation of the company's license, whose clients "represent about 50% of the Russian economy," would deal a hard blow to Russia itself.
That means changes in investors' attitudes to the country, inevitable complications at the talks on entry to the World Trade Organization and serious problems Russian companies will encounter when planning IPOs on international exchanges.
Vedomosti
Rosneft pays Yukos debt
The assets of the now bankrupt Yukos oil company have not all been sold off yet, but the state-owned oil major Rosneft has already seen a manifold increase in its net profit thanks to its claims to the embattled oil company.
However, it has paid dearly for the privilege: while not receiving a cent from Yukos, it has already paid out over $1 billion in profit tax, and may have to pay higher dividends.
Last Friday, Rosneft reported a surge in its profit for the fourth quarter of 2006. Its net profit grew 8.3-fold, from 16.4 billion rubles in the third quarter to 136.8 billion rubles. Net profit for all of 2006 was up 3.8-fold, to 213.2 billion rubles.
Rosneft said the jump came from "reflecting the debt included in Yukos's creditor registry on the court decision."
With its proved claims of 264 billion rubles, the company is Yukos's second biggest creditor after the Federal Tax Service. It has won the lawsuit on Yukos's debt of 62.4 billion rubles to its former production unit, now owned by Rosneft, Yuganskneftegaz, for supplied oil.
Yuganskneftegaz also proved in court that its losses from transfer prices had exceeded 130 billion rubles.
In Russia, revenues adjudged by a court are included in financial statements before the money is actually received, said Yelena Starovoitova, CEO of the audit company Starovoitova and Partners.
Proved losses from transfer prices can be classified as the company's other income, and Rosneft will have to pay the profit tax on them, she said.
Yukos's debt for supplied oil should be included in Yuganskneftegaz's income and is unlikely to be reflected in Rosneft's 2006 revenues. A source in Rosneft said that the company had already paid $1.3 billion in profit tax, although it had not received the money.
The company's spending may not stop at that. It may have to pay higher dividends as well.
Rosneft has promised its shareholders at least 10% of the profit, and if it keeps its word, it will have to pay 21.3 billion rubles, or almost double what it paid in 2005.
However, payments can be even higher, as the Russian Federal Property Management Agency annually sets a share of net profit to be paid as dividends for state-owned companies.
Rosneft pays as much as officials say. It was 1.75 billion rubles, or 10%, in 2004 and 11.3 billion rubles, or 20% in 2005. This year, the Agency has asked companies to pay at least 25% of their net profit. If Rosneft obeys, its dividends may amount to 53.3 billion rubles.
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