Russia 110720 Basic Political Developments
UPDATE 2-Russia offers Germany gas, rare earths to nudge China
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UPDATE 2-Russia offers Germany gas, rare earths to nudge Chinahttp://www.reuters.com/article/2011/07/19/germany-russia-trade-idUSLDE76I0FT20110719 Tue, Jul 19 2011 * Medvedev and Merkel discuss raw materials deal * Russia says has vast rare earths deposits * Moscow eyes German power market after nuclear exit (Recasts with Merkel and Medvedev news conference) By Alexei Anishchuk and Andreas Rinke HANOVER, Germany, July 19 (Reuters) - Russia offered Germany long-term deals for natural gas and rare earths on Tuesday, putting pressure on China, which currently dominates the rare earths market, to end delays in agreeing to imports of Russian gas. China controls 97 percent of the global supply of rare earth minerals -- used heavily in Germany's electronics industry -- and Russian President Dmitry Medvedev opened the door to German investment to exploit Russia's untapped reserves of the elements. "Of course we're ready to enter into new relations with our friend, including on rare earths," he told reporters after talks with Chancellor Angela Merkel and German business leaders in Hanover. "I'm referring to a planned wave of privatisations. We expect German investments in this area." Germany's electronics industry says the market for rare earth minerals with magnetic, luminescent and other valuable properties is critical, due to export curbs from China. China eased the restrictions last week, restoring them to near-2010 levels, but trading partners like the European Union and United States said it was not enough to ensure stable supplies of 17 rare earth metals which are crucial for the electronics, defence and renewable energy industries. The issue became a flash point last year after China halted shipments to Japan in a diplomatic spat, showing it was ready to use its monopoly as a political tool. Deputy Prime Minister Viktor Zubkov said Russian deposits easily accessible and not requiring industrial extraction were of a volume "equal to global annual production". EUROPE, CHINA COMPETE FOR GAS Russian talk of its "unlimited" capacity to supply Europe with gas also seemed directed at China, which is driving a hard bargain in long-running price talks on Russian gas deliveries to China, some of whch would come from the same fields supplying Europe. Russian energy giant Gazprom wants the same returns on deliveries to China as to Europe, which sources say means there a price gap of at least $100 per thousand cubic metres between Gazprom and China's negotiating positions. Germany's decision to shut down all of its nuclear reactors by 2022 is a huge opportunity for Russian gas sales in what is already Moscow's third-largest trading partner. But Zubkov's talk of Gazprom hoping for a 30-35 percent increase in demand from Germany met a cool response from the German chancellor. "Let's wait and see what happens," she said, telling a news conference with Medvedev that "market forces will be decisive" in how much Russian gas does fill the gap left by nuclear power. Germany needs additional power plants with a capacity of 10 gigawatts as it phases out nuclear power, but it also intends to double its renewable energy output in time for the final exit in 2022. Last week Gazprom, Russia's gas export monopoly and the world's largest gas company, announced exclusive talks with Germany's RWE for a joint venture in power generation, with an implied promise of fatter margins on its German sales. "We will cover all the volumes demanded by the German economy with Russian gas supplies through North Stream and Yamal-Europe, so there are no problems at all," said Zubkov, who is also the chairman of Gazprom. Medvedev said trade between Russia and Germany would reach "record post-crisis turnover" this year of $60-70 billion. (Additional reporting by Douglas Busvine in Moscow; writing by Stephen Brown in Berlin; editing by Dmitry Zhdannikov and Anthony Barker) Medvedev signals to voters from Germanyhttp://rt.com/politics/press/nezavisimaya/medvedev-germany-election-2012/en/ Published: 20 July, 2011, 06:14 Edited: 20 July, 2011, 06:19 The uncertainty of the political future reduces the importance of the presidential initiatives By Aleksandra Samarina During yesterday’s public forum, the Petersburg Dialogue, in Hannover, Germany, President Dmitry Medvedev made some important political statements. Experts believe they are directly related to the 2012 election. The head of state spoke about the interrelationship between leadership and society, lamented about the prevalence of state media, especially in the provinces, and spoke about the need to develop public television. However, the proposed reforms, say experts, in many respects lose value due to the uncertainty regarding their implementation. Medvedev, as expected, once again failed to clarify the situation concerning his involvement in the presidential campaign. However, he did make a statement that could be interpreted in this context.
The impression that the Russian head of state is alluding to the 2012 presidential election is given by the possible coincidence of Medvedev and Merkel’s fates: the first could run in the 2012 elections, and the latter will apparently run for the top position in Germany in 2013. As is well known, the Petersburg Dialogue is chaired by retired high-ranking officials. On behalf of Russia, the forum’s work is managed, in particular, by former prime minister Viktor Zubkov, who replaced former Soviet president Mikhail Gorbachev. Should it be understood that Medvedev considers his leave from his current post in 2012 to be premature? A member of the Carnegie Center in Moscow, Nikolay Petrov, says we should not rush to conclusions.
However, the head of state could not resist from taking a dig at the government. “I could candidly say that in our country, for example, there is a gap between ‘the letter and the spirit’ – between the way the law is formulated and how it is implemented,” he said. At the same time, Medvedev continued, the gap is not “dramatic in nature.” Yesterday’s soft criticism of the executive authority coincided with Medvedev’s decisive retort to the Organizing Committee for the Quadriga award, which retracted its announced awarding of the prize to Russian Prime Minister Vladimir Putin. Medvedev called its position “cowardly” and “inconsistent.” Knowing that he was speaking before a Western audience, Medvedev dedicated a lot of time to talking about NGOs. However, here his position was also ambivalent. On the one hand, the president called for an end to the mistrust between the government and NGOs, noting that it is a vestige of Soviet-era policies. But on the other hand, Medvedev stated, “Not only must the government make its contributions, but so do the non-governmental organizations, which must show what they are capable of doing.” This statement sounded somewhat strange, coming from a head of state. The development of relations between NGOs and their controlling officials has, in recent years, resembled a game for the same team. Medvedev also announced that he believes it is necessary to stop subsidizing state media, especially in the regions. “The faster we are able to separate these types of media from the government, the better,” he declared. At the same time, Medvedev lamented the dependence of regional publications on local authorities. However, he quickly acknowledged that this type of reform could bankrupt the publications. In this regard, there is a long-standing dilemma: having lost state funding, small provincial newspapers will become dependent on local businesses, and will be forced to get involved in the conflicts of market players. In this situation, Medvedev’s grievances would be more applicable to state television channels and major federal newspapers – which he did not mention. “A long drawn-out preamble” was how the head of the Effective Policy Foundation, Gleb Pavlovsky, described Medvedev’s interview with NG. “The president is listing real problems, but a question arises: who will be changing the situation?”, he asked. Medvedev, according to Pavlovsky, is facing a choice: either to force the government to change the current situation, or say that he will handle it himself. “A very insincere situation has unfolded,” Pavlovsky said. “The prime minister spends hours polemicizing against the president in absentia in Magnitogorsk, without directly naming him. The style of leadership which he offers is diametrically opposed to that of Medvedev. Uniting them is impossible – that’s schizophrenia.” As a result, says Pavlovsky, people are no longer taking Medvedev’s statements seriously. “Citizens don’t know what is being expressed – whether it’s wishful thinking, or a solid policy of a presidential candidate,” he said. “Uncertainty lowers the status of Medvedev’s statements. Neither he nor Putin are able to escape from this situation.” According to Nikolay Petrov, Medvedev’s “Magnitogorsk packet” plays to his benefit. “It is the only bridge from declarations to concrete actions, which are already today being implemented and will remain regardless of whether Medvedev stays in his current position or not,” he said. “But if he does not become president, then he is unlikely to serve as the prime minister, as he is unsuited for this work – he will most likely become chairman of the Constitutional Court. Therefore, reforms are stalling.” Medvedev’s statement regarding public television, says Petrov, is in line with the president’s reform proposals. But today, noted NG’s source, it would be strange to seriously pursue plans whose implementation is not only outside of the timeframe of this term, but also of the next two or three terms. “In the beginning of his presidency, he did not make these types of statements, and the things that he did talk about, he pushed aside like old, boring toys,” he said. “It would be nice if the president, strong or weak, acted in a consistent manner and implemented the ideas which he had voiced earlier.” However, notes Petrov, the Magnitogorsk statements, and those that were made by Medvedev at the St. Petersburg Economic Forum, are not addressed to the entire population, but to small and medium-sized businesses. “Unlike Putin – who is speaking today with students, and tomorrow with workers – Medvedev is not trying to expand his constituent base, [instead] addressing all of his statements mainly to domestic businesses and Western commentators,” he argued. 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