Moskovsky Komsomolets, June 20, 2002, p. 2

What is the core of the Russian Armed Forces today? Strangely enough, it is officers of pre-retirement age and young lieutenants. The former have already devoted all their lives to military service, and now it is too late to change their way of living. All they need from the state is accommodation and the promise of pensions. The latter go into the service straight out of military institutes. As a result of “unnatural selection” during the first year of service, half of them resign; and a further 30% leave during the second year. As a result, the succession of generations is broken; the experience of older officers is not handed down; and several years from now, the Armed Forces could simply die out.

Yet we cannot accuse those who are resigning from the military of being mercenary or unpatriotic.

For example, take the salary of a senior lieutenant: 480 rubles a month for military rank, plus 770 rubles for duties, 250 rubles long service bonus, and a bonus for complexity and intensity of work (70% of the duties salary) – 540 rubles. This totals 2,040 rubles a month. Plus meals allowance of 2,600 rubles. Even a cleaner earns more in Moscow!

To be honest, we did not manage to find out the true amount by which military wages are set to rise (the duties salary will be raised from July 1, and the rank salary will be raised from January 1, 2003). We tried to clarify this by inquiring at the accounts departments of several military units, we asked officers, and even tried the president’s official website. Even if we believe the promises of the government (and Vladimir Putin), military salaries will be increased twice by the end of the year, and a senior lieutenant will get 3,900 rubles a month, minus income tax and benefits. As a result, officers will be no better off – maybe even worse.

Around 50,000 officers whose contract terms are expiring are waiting impatiently for July 1, to decide whether they will stay in the military or become civilians.


Moskovsky Komsomolets, June 20, 2002, p. 2

The eighteenth national banking conference has wound up in Moscow. It was convened due to urgent circumstances: a new president took over at the Russian Banking Association when Sergei Yegorov, who had headed the RBA for ten years, resigned. His first deputy – Garegin Tosunyan, former president of the bankrupt Tokobank – was elected as the new RBA president.

The government will soon consider some new banking sector reforms. Andrei Kozlov, first deputy head of the Central Bank, recently outlined the main points on the reform agenda: firstly, the state will continue to participate in Sberbank (the Savings Bank) and Vneshtorgbank (the Foreign Trade Bank), while withdrawing from other commercial banks. Secondly, the state prefers dealing with large financial institutions. The fate of small and middle-sized banks is not clear.

It looks like the state is about to put an end to competition in the banking sector and normal development of banks. Kozlov said that early withdrawal of deposits from banks should be banned, since this disrupts stability of the banking sector. This practically means freezing our money, since we would not be able to withdraw it before the end of a fixed term. This measure would violate the Civil Code; however, the laws can be changed…


Izvestia, June 20, 2002, p. 3

Oleg Kalugin’s trial in absentia is drawing to a close. Yesterday the Moscow City Court completed hearing evidence in the case of Kalugin, a former KGB general who is charged with high treason. Tomorrow the process will enter the final stage – summations by the prosecution and defense. Then the general will await the verdict.

General Oleg Kalugin, whom his former colleagues in the secret services are calling a traitor, is charged with revealing state secrets; it is also alleged that he identified former U.S. Army Colonel George Trofimoff, who was subsequently found guilty of spying for Russia. According to the prosecution, in June 2001 Kalugin appeared as a witness at the trial of Trofimoff; although Kalugin himself denies all charges, saying he did not identify Trofimoff to American and British intelligence agencies.

If the court finds Kalugin guilty of “high treason in the form of revealing a state secret to another state” he will face 12-25 years in prison with confiscation of property.

Lawyer Yevgeny Baru said it had taken three days for the court to conduct the inquiry; the defendant was not present at the trial, nor even any witnesses.

Kalugin will only be able to learn of the sentence from his lawyer. In the view of the latter, the court decision might be sent to Kalugin’s residence in the US. However, regardless of the verdict, little will change in Kalugin’s life. There is no extradition agreement between Russia and the US, so Kalugin will apparently remain free. In America.


Izvestia, June 20, 2002, p. 3

The government commission for investigating the Kursk submarine sinking met for the second-last time yesterday, in St. Petersburg. Ilia Klebanov, who chairs the commission, reported that experts had rejected two of the three main theories for the disaster: the submarine did not collide with a World War II mine or any other vessel. Thus, the submarine sank following the explosion of a 650-millimeter torpedo, which led to the detonation of the ammunition in the first compartment. However, Klebanov did not identify the precise cause of the explosion. This will be known only on June 29 when the commission meets for the last time. It is then that the final conclusion will be signed; work on preparing it started yesterday. The same session will decide on the fate of the remaining fragments of the submarine’s fist compartment, which remain on the floor of the Barents Sea. Representatives of the Navy propose blowing them up, for safety reasons, as the submarine sank in a busy shipping area.