PUTIN’S THAW

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The Kremlin is reviving United Russia

The Kremlin is reviving United Russia. It organized a right and a left wing in it. The right wing will be for freedom and the left wing will be for social policy. At the presentation of the right wing liberal party members were asked, about the YUKOS affair. Previously United Russia simply did not notice this affair. The party members answered that they did not differentiate this affair from the others and that Russian justice was not independent and the country had not seen arrests of lawyers under the cases of their clients since 1937. A thaw was timed to the calendar spring and declared in Russia.


The Kremlin is reviving United Russia. It organizes a right and a left wing in it. The right wing will be for freedom and the left wing will be for social policy. At the presentation of the right wing liberal party members were asked, about the YUKOS affair. Previously United Russia simply did not notice this affair. The party members answered that they did not differentiate this affair from the others and that Russian justice was not independent and the country had not seen arrests of lawyers under the cases of their clients since 1937. A thaw was timed to the calendar spring and declared in Russia.

Everything started when at the end of February President Vladimir returned from his meeting with George Bush looking cheerful and refreshed. Those who worked in the Kremlin noticed this at once. These were the first sun rays. Afterwards there was an official visit to Ukraine as if Moscow and orange Kiev had never quarreled. After that, at the end of March, the President invited businessmen to talk to him. It looked as if someone finally explained to him that the economy could have grown twice as fast were the businessmen not afraid to invest their money. Everyone remained content with the conversation. The President soothed the businessmen down in general and promised to reduce the statue of limitation for privatization deals from ten to three years in particular. This piece of news was not in the plan of the meeting because it was kept in reserve for the presidential message to the Federal Assembly. The President suddenly decided that he would have something else to speak about in the message. Observers expected that the presidential message would be full of progressive liberal spirit too. On the eve of the message release a Kremlin official said, “If fulfillment of at least a half of what has been said begins, this will be a breakthrough already.”

Despite the breakthrough, at his meeting with businessmen in March the President said that he was not going to reduce the role of the Federal Tax Service. These were a kind of light fleecy clouds that naturally lead to a thunderstorm by afternoon. Everyone remembers how the tax authorities have crushed YUKOS having antedate seen a criminal design in the tax minimization schemes formerly considered quite legal. To be more accurate, YUKOS is not fully devastated yet. The three -year statute of limitation for 2001, already expired and the tax authorities did not have time to enforce 40.5 billion rubles in tax arrears, fines and penalties on the company yet. Tax authorities proposed the Constitutional Court to abolish the statute of limitation for tax arrears because it allegedly contradicted the Constitution. Light morning frosts do happen even in May.

The Kremlin official says, “There is much danger that because of one certain affair the law will be amended for everyone, which means that there is no protection from arbitrary actions.” Vladislav Reznik, member of presidium of the general council of United Russia, emphasizes that Russia has a new law application practice: from the suspect to the crime and not vice verse, and Constitution is what the Constitutional Court says about it. In private conversations, businessmen and state officials speak even more frankly: this is a hook on which everyone will be hanged. Which mutual confidence of business and the state can we talk about” Negotiations between the Russian Union of Industrialists and Entrepreneurs with the Finance Ministry on tax relief and privatization amnesty are full of baloney in comparison to this lawsuit, says the interlocutor of Newsweek. If the court declines the lawsuit on May 26, this would really be a positive signal.

Really, people in our country live according to the principle: no news means good news. This is a sign of a thaw and mutual confidence too. Chief economist of Troika Dialog, Yevgeny Gavrilenkov says, “Everyone has already learned that words do not mean anything. Everyone is waiting for certain actions and will consider their actions the best option. In any case, it does not seem that there will be no such actions.” A source from Newsweek close to the Kremlin explains that this feeling as if there is more air appears because there have been no second YUKOS and no oligarchs have been imprisoned after Khodorkovsky. At first people huddled up because of fear but gradually relaxed: you say something and there are no consequences. Wings have appeared even in United Russia and to these wings members of the party were included according to preliminary applications. Some of them were told to speak up, some others were told to sign and some others were told to sign but not to join. Duma deputy Igor Igoshin from the leftist flank states, “The process is going out of control, rigid limiters have been lifted and the situation will change.”

At any rate, this is rather an illusion. When activists of the rightist wing of United Russia were told in the Kremlin that it was high time to react to the processes, some of them asked how strongly they could criticize the President. Deputy Director of the Presidential Administration Vladislav Surkov responded, “Well, you have self-censorship, have you not?” Everything is OK with television too. Evrofinance bank, which has finally bought REN TV, the last television channel with an independent news service, like Newsweek has predicted, is already instructing the employees, saying that they should not touch the President. The interlocutor of Newsweek presumes that the only advantage is that it will be more difficult to force those who have already spoken in public, for example, against abolishment of banking secrecy to vote for this abolishment. In any case, it seems that the Kremlin has already got used to such difficulties. For example, the Kremlin can reappoint the governor in some regions without being abashed by the fact that his own parliament is in conflict with the governor. The President already declined the first vote of no confidence of the parliament of Altai in Governor Yevdokimov. The parliament of the Nizhny Novgorod Region having conflict with Governor Khodyrev requests Khodyrev not to appeal to the President for confidence confirmation. Otherwise the local branch of Untied Russia will have to lose face and to vote for him. An informed official reports that deputies are angry and Kremlin officials shrug, saying that they need to do this, “Everyone is tired and there is no drive to do anything. For whom can he be changed and what for?” The case of Prime Minister Mikhail Fradkov is the same. Rumors about his dismissal have been circulating since last autumn. The government fails to fulfill plans one by one. At the latest meeting of the presidium of the State Council dedicated to mortgage programs development it turned out that not a single one of 1,400 legal acts was issued in six months. It was rumored that Fradkov even tried to postpone the meeting because he allegedly did not receive the necessary documents on time. After a check it turned out that he did receive the documents. According to Newsweek, his latest conversation with the President was very harsh and the President agreed that the Prime Minister did not cope with his duties. In any case, interlocutors of Newsweek do not expect his dismissal yet. For whom he can be exchanged and what for? We are living anyway. One of the influential state officials says that we will move forward under wise leadership like this: one step forward and a step and a half back. The YUKOS affair is a single case but tax arrears are stated against other companies here and there. Among the latest cases there are tax claims worth $1 billion against TNK-BP. The British lord, the head of BP, does not wait for the court hearing but comes to Putin at once. Reforms are not stopped but are not going on either. We do not have warm weather or frost but have a winter urban sleet under the feet. Yevgeny Gavrilenkov states that the authorities are split like United Russia. At least the leftist wing of United Russia insists that it is impossible to limit the statute of limitation for tax claims by three years due to the social interests of the state and immunity should not be given to lawyers.

According to the sources of Newsweek, the Kremlin will not split United Russia into two parties yet but if this is necessary the Kremlin will have enough time to do this before the parliamentary elections of 2007, which will serve as a prelude for the presidential elections. So far United Russia passed amendments to the law on elections with satisfaction. These amendments show that the Kremlin stakes United Russia because they contain a prohibition of electoral blocs, privileges for the existing deputies elected in the single-mandate constituencies when they participate in elections according to party lists, as well as prohibition for movement to another faction. Previously Duma deputies were nervous because they did not know what would happen to them. The problem of 2008, was clarified too, and Vladimir Putin hinted that he would promote a successor. According to an informed source of Newsweek, an honorably party post may be invented for Putin in 2008, but he would not become the Prime Minister for sure. Political scientist Alexei Makarkin explains that the recent interview of Presidential Administration Director Dmitry Medvedev speaking about consolidation of elites on the platform of “unity of the country” – a song of thaw again – is a kind of peaceful electoral message to business saying, “You are under us but we extent a hand to you.” Medvedev means that the Kremlin does not have any perfidious plans and if you play according to rules you have a huge chance. We will move forward together.

Discussion of the possible term of imprisonment for Mikhail Khodorkovsky – five, eight or ten years, most likely eight years – has become a kind of bidding for a narrow circle of people. The courtiers’ etiquette prohibits discussion of this topic aloud. It is in general more decent and sager to have a positive attitude. At the meeting in the Kremlin new liberals from United Russia were told that “democracy in Russia does not ensure stability of ownership.” This is an axiom. Thus you can weigh all pros and contrast and count the risks. In comparison to Artic even snow of St. Petersburg means subtropics.

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