MOSCOW, May 12 (RIA Novosti) Kremlin merging Constitutional Court into state-power system/ Europe fails to strike life into Nabucco/ Economic crisis provides Russia with additional leverage/ Government trying to boost demand for Russian civil aircraft
Gazeta.Ru\Kommersant
Kremlin merging Constitutional Court into state-power system
Under a new bill submitted by President Dmitry Medvedev to the State Duma, the lower house of parliament, the chairperson of the Constitutional Court will no longer be elected by court members but will be appointed by the Federation Council, the upper house of parliament.
Vladimir Pligin, chairman of the State Duma's legislation and state development committee, said the Federation Council had the right to appoint chairs to the Supreme Arbitration Court and the Supreme Court, and that President Medvedev's proposals simplified the current practice.
"The judicial branch will not become more dependent," Pligin said.
A source in the Constitutional Court said the court chairperson now depended greatly on judges during the decision-making process, and that he was elected by judges and was guided by their views in subsequent work.
The new procedure which is a copy of the German experience will totally eliminate this problem. The Bundestag, the national Parliament, and the Bundesrat, the representation of the 16 Lander (states) of Germany at the federal level, appoint members of the German Constitutional Court.
The source said the new move had positive and negative aspects because the chairperson's excessive corporate dependence interfered with his work, while ordinary judges would largely loose their status.
The source said the Constitutional Court remained the only judicial-branch agency to elect its chairperson through democratic procedures.
"This amendment completes the formation of the new top-down political structure which first outlined new procedures for electing regional leaders and now calls for appointing the Constitutional Court chairperson," the source said.
Dmitry Oreshkin, head of the Mercator Research Group, which specializes in political monitoring in Russia's regions, said the presidential bill was an attempt to strengthen the power vertical and an indication of the fact that the Constitutional Court was an important political instrument.
Viktor Sheinis, member of the Yabloko party's bureau, called the amendment "harmful" and said it would only increase the Constitutional Court's dependence on the President.
Mikhail Krasnov, head of the constitutional-law chair at the Higher School of Economics, said the Supreme Arbitration Court and the Supreme Court had already been integrated into the power vertical and that the judiciary branch would be completely controlled by the executive branch after the Constitutional Court started abiding by the same rules.
Gazeta
Europe fails to strike life into Nabucco
Turkmenistan, Kazakhstan and Uzbekistan have refused to sign a final declaration at the EU energy summit which was expected to give the go ahead to new gas routes bypassing Russia. Analysts believe the Central Asian countries' move will ultimately bury the Nabucco project, an old European gas-shipping utopia.
"This in fact means the European project will be suspended indefinitely, since the lack of guaranteed resources is what is primarily preventing the construction of Nabucco," said Alexander Shtok, head of the Due Diligence department at 2K Audit Business Consulting.
"Central Asia does not want any empty declarations. They won't budge until offered a feasible project with calculated gas volumes, guaranteed financing or other realistic conditions. They won't sign a statement which is high-profile but not backed by anything," said Mikhail Krutikhin, a partner in Moscow's RusEnergy Consulting.
"Russia has played its cards well in Central Asia, and the regional countries have effectively consolidated their own positions," said Dmitry Abzalov, an analyst at the Center for Current Politics think tank.
"Turkmenistan is in a superior position to bargain, since it has enough resources to deal with Russia, Europe and China simultaneously. But this tangle of conflicting interests is growing too large as each country is trying to cash in on the situation in the run-up to the improbable construction of Nabucco," he added.
"Nabucco is growing into a myth, so far effectively used as a tool to pressure Russia," said Alexander Rahr, director for Russia and Eurasia at the German Council on Foreign Relations (DGAP).
Nabucco is a EU-backed planned natural gas pipeline to pump gas from Central Asia to Europe, to run from Erzurum in Turkey to Baumgarten, a major natural gas hub in Austria, via Bulgaria, Romania, and Hungary.
Vedomosti
Economic crisis provides Russia with additional leverage
A declaration on building the Nabucco pipeline, a planned pipeline for transporting natural gas from Turkey to Austria, via Bulgaria, Romania, and Hungary, is not the final document. The talks will continue, and prospective gas suppliers, primarily Turkmenistan, could join the project.
Kazakhstan, Turkmenistan and Uzbekistan refused to sign the declaration at the May 8 EU Energy Summit in Prague. Their actions play into the hands of Moscow who advocates the South Stream project, a proposed gas pipeline to transport Russian natural gas to Italy and Austria.
Kazakhstan, Turkmenistan and Uzbekistan are obviously bargaining with Russia, the EU, the United States and China.
The same concerns other CIS countries. Moscow recently promised to provide Kyrgyzstan with a free loan of $150 million, a $2 billion state loan and to assist in building the Kambaratinskaya hydropower plant.
Following the move, Bishkek annulled an agreement allowing the United States to use its Manas Air Base near the Kyrgyz capital.
Although Belarus and Ukraine also implement multi-vector foreign policies, both Minsk and Kiev have been forced to beg Moscow for easy-term loans and to negotiate gas prices and transits.
Although the economic crisis has provided Moscow with additional leverage, this will require additional spending in the light of the complicated CIS economic situation. Against the backdrop of bilateral credit talks, the Eurasian Economic Community is setting up a $10 billion anti-crisis fund. Russia will contribute $7.5 billion to the total.
However, the EU is not offering any economic assistance to Central Asian countries under the Nabucco project.
Prime Minister Vladimir Putin said Russia was renouncing the Soviet-era concept of permanently financing its allies in exchange for ideological loyalty. Moscow is now aiming to employ capitalist methods to buy loyalty from its allies. Russia is counting its financial assets more carefully and using more intricate instruments, without demanding unconditional public support for all its projects.
It is possible to save on economic projects, while paying for political influence. Nabucco, South Stream and Nord Stream, another planned pipeline from Russia to Germany with the company Nord Stream AG, stipulate construction of pipelines and gas deliveries but do not have to be implemented in the short term.
Plunging European gas demand and the lack of EU funding and energy giant Gazprom's budget could lead to construction delay but they will need to take notice of the above-mentioned projects.
Vedomosti
Government trying to boost demand for Russian civil aircraft
Russia's state Bank for Development (Vnesheconombank) will provide airlines with funding to encourage them to buy Sukhoi Superjet 100 regional aircraft, including flagship carrier Aeroflot. The $250 million (or 8.12 billion rubles) will be allocated through 13-year loans, Deputy Prime Minister Sergei Ivanov said on Monday.
The cash will be provided to finance the leasing of aircraft with VEB Leasing operating the program, a VEB official said.
This is only part of government support planned for Sukhoi Civil Aircraft, a Sukhoi subsidiary founded in 2000 to design, produce, market and support civil aviation programs. The government will also allocate 3.6 billion rubles to put SSJ into production and 3.2 billion rubles more as a contribution to Sukhoi Civil Aircraft's share capital, said two sources in agencies included in the discussion.
They said recapitalization was scheduled for this year, but did not specify a date.
The funding source has not been decided on, a Finance Ministry official said.
The company does have a problem with going to production, said Mikhail Pogosyan, general director of Sukhoi Civil Aircraft, admitting it is unlikely to be settled without government support.
An Aeroflot representative declined to comment. Sukhoi spokesperson Olga Kayukova only said that VEB had signed an agreement with French company COFACE and Italy's SACE on a SSJ export scheme.
She added that, although the aircraft's catalogue price was $25-$28 million, each contract would be separately negotiated.
The first jet will be sold to Armenia's Armavia, Kayukova said. Overall, 98 aircraft have been ordered, including 30 by Aeroflot, and 10 by Italian companies. The company also has a 15-jet contract with the defunct alliance AirUnion, which are to be inherited by Rosavia, an airline in which Russian Technology state corporation and the Moscow government have stakes.
Supporting Sukhoi is a political move, according to Yevgeny Shago from Ingostrakh Investment. However, the $250 million will only be enough for 10 jets, while 13 years is too short for aircraft leasing. The highest current interest rate for a dollar-denominated loan under this scheme is 4%-5%; for a ruble loan, 11%, a senior executive at an airline said.
Other aircraft companies have received state support as well. The 2009 federal budget stipulates 6 billion rubles to buy the United Aircraft Corporation's additional share issue, 2.2 billion to make a contribution to its share capital, and another 1 billion to subsidize its subsidiaries' loan and leasing payments.
The government has also provided 15 billion rubles for recapitalization of the MiG Aircraft Corporation.
RIA Novosti is not responsible for the content of outside sources.
