When residents in the quiet town of Pikalyovo, 200 kilometers east of St. Petersburg, learned their hot water was being cut off indefinitely, it was the last straw.
Hundreds of people besieged the town's administration building on Wednesday during an emergency funding meeting, and about half of them stormed into the building, telling officials, includingAnd that was a lot. Two of the town's three cement plants, providing jobs for about 4,000 people - one-fifth of the town's population - shut down months ago. The third plant, owned by BasEl Cement - a company affiliated with Basic Element, the holding of Russia‘s former richest man, the now-heavily indebted Oleg Deripaska - owes its workers up to three months' wages.
The eruption of anger may not be the norm across the country, where many similarly stricken towns and cities are waiting out the crisis as savings run out and desperation sets in. But the example of Pikalyovo, where a spiral of cross-company debts has left thousands out of work and local services at a standstill, is one that could be repeated many times over if help does not arrive soon.
The Pikalyovo protest spawned a flurry of wild Internet media reports on Wednesday, including a false one that hungry locals were resorting to eating dogs. Local officials did say on Thursday, however, that the poverty had reached such levels that people had been talking of taking advantage of the chickenweed that grew wild in their gardens, and eating it with mayonnaise.
"Of course there's nothing to eat, if people aren't getting paid," said an official at the city administration who asked not to be identified. "But we have such a difficult situation, please don't exaggerate things. No one is eating dogs. But if you have sour cress growing in your garden, why not eat that?"
The official insisted there was no public "siege," as some media reported. Instead, locals had met outside of the building during the crisis meeting. After waiting for hours, about 30 or 40 people, the official said, tried to get inside the building. "They pushed up against the doors, and the doors opened. The people were surprised. And they started telling the officials, ‘We want work.' They started telling them about all the problems that had accumulated."
Svetlana Antropova, a local union official, has become something of a bogeywoman for officials at the BasEl Cement plant, where she represents the workers, and for town officials. They blame her for organising the protest that led to the storming of the town hall, but she denies this.
"There was no protest rally, about 400 people just gathered in front of the building," said Antropova, whose union is affiliated with the pro-Kremlin Federation of Independent Unions.
An old man asked the mayor directly to "reach into his pocket and give him 1,000 rubles, so that he could feed his family", she said.
According to Antropova, about 100 people went inside the building, but it was not a siege or a takeover - they just wanted to know when they would get their jobs back and when the water would be turned back on.
BasEl officials said they wanted to know too. "The only electricity plant that produces power for the town is controlled by the company," said Svetlana Andreyeva, a spokeswoman for BasEl Cement. "The city is supposed to pay for this, but it isn't paying."
Peterburgregiongaz, the local Gazprom subsidiary, has cut off gas supplies to BasEl Cement because it owes it 141 million rubles ($4.5 million). But the municipality owes the company about 180 million rubles ($5.7 million), BasEl Cement claims.
Utilities disputes between private companies and municipal authorities are at the heart of most cases of water or heating getting cut off in provincial Russian cities. For BasEl Cement, the crisis has exacerbated the problem.
In the autumn of 2008, world prices for alumina, an oxide of aluminum produced by BasEl, dropped by 50 per cent. A ton sells for $160, but costs $500 to produce.
Because the plant supplied byproducts of the alumina to the two other plants at reduced prices, it was unable to make ends meet and production stopped. Half the employees were put on enforced leave, getting only two-thirds of their salaries. So far they have been paid only part of their March salaries.
Now, the company wants its bills paid, so it in turn can pay its debt to the gas company and have the power plant start working again. But municipal authorities, who used to pay the company through two municipal unitary enterprises - one of which is on the verge of bankruptcy - say they owe BasEl only part of the debt.
The conflict between BasEl Cement and the municipal authorities was what officials met Wednesday to discuss, in the presence of regional prosecutors and Federal Security Service agents, Andreyeva said. They are currently negotiating two solutions: either the Leningrad region government agrees to provide debt guarantees for BasEl's gas bill, or the municipal authorities agree to pay part of it.
In the meantime, some of the locals are resorting to Soviet-era black humour. One, Alexei, quipped in a forum on the city's web site, www.pikalevo.net: "Just had boiled shoelaces for the first time today. With salt, they tasted like spaghetti Mayor Sergei Veber, exactly what was on their minds.
Saturday, 23 May 2009
Friday, 22 May 2009
EU Should Lend Ukraine Money: Medvedev
KHABAROVSK, Russia -- Russian President Dmitry Medvedev urged the European Union to lend Ukraine money he said Kiev needed to meet its gas payment obligations.
The Russian leader said he doubted Ukraine's ability to pay four billion dollars for 19.5 billion cubic metres of gas that Kiev needs to replenish its underground reservoirs in time for winter.He said a syndicated loan agreement should be reached, with European and Russian participation. The EU, however, should come up with most of the money, Medvedev added."We are ready to help the Ukrainian state but would like the European Union, those countries that are interested in reliable security of energy cooperation, to take upon themselves the bulk of this work," he said.Referring to the financial problems Moscow believes Kiev is suffering, Medvedev said: "We have doubts about Ukraine's ability to pay."Ukraine, one of the countries hardest hit by the global economic crisis, has asked Moscow for a five-billion dollar loan to help with its gas payments.But the Russian finance ministry said this week a decision had not yet been made.In Kiev on Thursday, however, Naftogaz spokesman Valentin Zemliansky denied there was any problems, telling AFP: "We're not anticipating any crisis. The financial situation of the company is stable."A payment dispute between Russia and Ukraine was at the heart of the gas conflict that shut down supplies to a dozen European customers in January.On Thursday, a Russian government official told the country's news agencies that Ukraine might find itself "on the brink of a new gas crisis" if it did not sort out its financial difficulties.In response to a question from a reporter about whether Russia could guarantee there would not be a repeat of the last winter's crisis, a visibly irritated Medvedev said it was not Russia's job to do so."The Russian Federation has not given any assurances and will not give any," he said. "What would be the good of that? Let those who pay for gas give assurances."
The Russian leader said he doubted Ukraine's ability to pay four billion dollars for 19.5 billion cubic metres of gas that Kiev needs to replenish its underground reservoirs in time for winter.He said a syndicated loan agreement should be reached, with European and Russian participation. The EU, however, should come up with most of the money, Medvedev added."We are ready to help the Ukrainian state but would like the European Union, those countries that are interested in reliable security of energy cooperation, to take upon themselves the bulk of this work," he said.Referring to the financial problems Moscow believes Kiev is suffering, Medvedev said: "We have doubts about Ukraine's ability to pay."Ukraine, one of the countries hardest hit by the global economic crisis, has asked Moscow for a five-billion dollar loan to help with its gas payments.But the Russian finance ministry said this week a decision had not yet been made.In Kiev on Thursday, however, Naftogaz spokesman Valentin Zemliansky denied there was any problems, telling AFP: "We're not anticipating any crisis. The financial situation of the company is stable."A payment dispute between Russia and Ukraine was at the heart of the gas conflict that shut down supplies to a dozen European customers in January.On Thursday, a Russian government official told the country's news agencies that Ukraine might find itself "on the brink of a new gas crisis" if it did not sort out its financial difficulties.In response to a question from a reporter about whether Russia could guarantee there would not be a repeat of the last winter's crisis, a visibly irritated Medvedev said it was not Russia's job to do so."The Russian Federation has not given any assurances and will not give any," he said. "What would be the good of that? Let those who pay for gas give assurances."
Russia 'Close To New Gas Crisis With Ukraine'
MOSCOW, Russia -- Russia and Ukraine may be close to a new gas crisis as Kiev faces difficulties making payments, an official accompanying Prime Minister Vladimir Putin to Kazakhstan was quoted as saying on Thursday.
"If things are that bad in the financial sphere ... We could come to the conclusion that we could be on the brink of a new gas crisis," news agencies quoted the official as saying, referring to Ukraine's poor economic situation.Putin was expected to meet his Ukrainian counterpart Yulia Tymoshenko during a gathering of prime ministers of former Soviet states in Kazakhstan.
Ambassador Breaks Ground On New U.S. Embassy Just Before Leaving Kiev
KIEV, Ukraine -- In a ceremony attended by journalists, Kiev city officials and diplomats, U.S. Ambassador to Ukraine William Taylor broke ground at a construction site in Kiev where the new U.S. Embassy will be located.
The event may have been one of Taylor's last public appearances as U.S. Ambassador to Ukraine. His diplomatic mission in Ukraine is coming to an end. It is still uncertain who will replace him.Asked at the event who will replace him, Taylor said that a decision had not yet been made.“However, I know that there is a lot of discussions ongoing right now. There are many candidates who want to come and work here,” he added.The new, 5-story embassy will be located on Tankova street. It is expected to be built and functional by 2012, employing 400 people.The consulate and embassy building, currently located in separate sites in Kiev, will be located at the new site. It will also include a food store and bank for personnel, and a gym with showers.The site will also include quarters for a special forces squad from the Navy Seals, and a basketball court for them. The facility will also include a children’s play ground and tennis and volley ball courts with room for spectators.Parking for almost 400 cars will be made available.
The event may have been one of Taylor's last public appearances as U.S. Ambassador to Ukraine. His diplomatic mission in Ukraine is coming to an end. It is still uncertain who will replace him.Asked at the event who will replace him, Taylor said that a decision had not yet been made.“However, I know that there is a lot of discussions ongoing right now. There are many candidates who want to come and work here,” he added.The new, 5-story embassy will be located on Tankova street. It is expected to be built and functional by 2012, employing 400 people.The consulate and embassy building, currently located in separate sites in Kiev, will be located at the new site. It will also include a food store and bank for personnel, and a gym with showers.The site will also include quarters for a special forces squad from the Navy Seals, and a basketball court for them. The facility will also include a children’s play ground and tennis and volley ball courts with room for spectators.Parking for almost 400 cars will be made available.
Ukraine May Not Host Euro 2012 Championship Because Of Political Intrigues
KIEV, Ukraine -- Ukraine may not become the hosting country of Euro 2012 Football Championship because of political scandals in the country.
Two years ago, UEFA awarded the right to host Euro 2012 to Poland and Ukraine. The matches of the Ukrainian part of the championship were originally planned to be held in the cities of Kiev, Donetsk, Dnepropetrovsk and Lvov. Kharkov and Odessa were named to be backup locations. The final match of the championship was said to take place in Ukraine’s capital, Kiev.UEFA’s decision was perceived enthusiastically in Ukraine. It is an open secret that holding such events is impossible without the construction of airports, hotels and other objects.However, Ukraine’s leadership did not move a finger to have the nation prepared for hosting the landmark sports event. Nothing has been built in the country: President Viktor Yushchenko and Prime Minister Yulia Tymoshenko are too much preoccupied with their struggle for power.It transpired on May 12 that the matches of the European Football Championship would be held only in Kiev and Donetsk . UEFA said the next day that Kiev had been confirmed as the location for play-offs, quarterfinals and semifinals.At the same time, the final game of Euro 2012 will take place in Kiev only if the city provides adequate conditions at the stadium, at the airport, as well as at hotels and in the field of transportation.For the time being, the Ukrainian authorities have only met UEFA’s requirement to dismantle the shopping center near Kiev’s Olympic Stadium. They could not do it for two years because of the arguments within the teams of Yushchenko, Tymoshenko and Kiev Mayor Leonid Chernovetsky, who had their own business interests in the construction of the shopping center.UEFA’s Executive Committee took Dnepropetrovsk and Odessa off the list of the hosting cities. Donetsk, Lvov and Kharkov will have the honor to host the games only if they take efforts to provide all the necessary conditions for the event.The final decision will be made on November 30, 2009. If nothing changes for the better, Ukraine will not host Euro 2012. No other country has ever had the right to hold the championship on only one stadium.Yushchenko, Tymoshenko and Vladimir Litvin (the speaker of the Ukrainian Parliament) wrote a letter to UEFA’s President Michel Platini and said that the government had assigned additional resources to have everything prepared on time.“We are certain that we will be able to execute all our guarantees particularly about the financial support for the preparations to Euro 2012 tournament. We have taken anti-crisis measures and conducted negotiations with the IMF,” the officials wrote in the letter.As a matter of fact, the Ukrainian government is trying to re-borrow the funds to re-distribute a certain part to other creditors. UEFA is not interested in that. The Union of European Football Associations will disregard all verbal explanations and pay attention to the work performed instead.In the meantime, Moody's Investors Service downgraded Ukraine's foreign and local currency government bond ratings to B2 from B1 with a “negative” outlook. The decision was made against the background of the worsening of the macroeconomic situation in Ukraine and the nation’s weak banking system.Ukraine has a great difficulty in funding the European Football Championship. It goes without saying that there will be neither hotels nor roads built in Dnepropetrovsk and Odessa. The endless struggle between Yushchenko and Tymoshenko may eventually deprive Ukraine of the celebration of football.
Two years ago, UEFA awarded the right to host Euro 2012 to Poland and Ukraine. The matches of the Ukrainian part of the championship were originally planned to be held in the cities of Kiev, Donetsk, Dnepropetrovsk and Lvov. Kharkov and Odessa were named to be backup locations. The final match of the championship was said to take place in Ukraine’s capital, Kiev.UEFA’s decision was perceived enthusiastically in Ukraine. It is an open secret that holding such events is impossible without the construction of airports, hotels and other objects.However, Ukraine’s leadership did not move a finger to have the nation prepared for hosting the landmark sports event. Nothing has been built in the country: President Viktor Yushchenko and Prime Minister Yulia Tymoshenko are too much preoccupied with their struggle for power.It transpired on May 12 that the matches of the European Football Championship would be held only in Kiev and Donetsk . UEFA said the next day that Kiev had been confirmed as the location for play-offs, quarterfinals and semifinals.At the same time, the final game of Euro 2012 will take place in Kiev only if the city provides adequate conditions at the stadium, at the airport, as well as at hotels and in the field of transportation.For the time being, the Ukrainian authorities have only met UEFA’s requirement to dismantle the shopping center near Kiev’s Olympic Stadium. They could not do it for two years because of the arguments within the teams of Yushchenko, Tymoshenko and Kiev Mayor Leonid Chernovetsky, who had their own business interests in the construction of the shopping center.UEFA’s Executive Committee took Dnepropetrovsk and Odessa off the list of the hosting cities. Donetsk, Lvov and Kharkov will have the honor to host the games only if they take efforts to provide all the necessary conditions for the event.The final decision will be made on November 30, 2009. If nothing changes for the better, Ukraine will not host Euro 2012. No other country has ever had the right to hold the championship on only one stadium.Yushchenko, Tymoshenko and Vladimir Litvin (the speaker of the Ukrainian Parliament) wrote a letter to UEFA’s President Michel Platini and said that the government had assigned additional resources to have everything prepared on time.“We are certain that we will be able to execute all our guarantees particularly about the financial support for the preparations to Euro 2012 tournament. We have taken anti-crisis measures and conducted negotiations with the IMF,” the officials wrote in the letter.As a matter of fact, the Ukrainian government is trying to re-borrow the funds to re-distribute a certain part to other creditors. UEFA is not interested in that. The Union of European Football Associations will disregard all verbal explanations and pay attention to the work performed instead.In the meantime, Moody's Investors Service downgraded Ukraine's foreign and local currency government bond ratings to B2 from B1 with a “negative” outlook. The decision was made against the background of the worsening of the macroeconomic situation in Ukraine and the nation’s weak banking system.Ukraine has a great difficulty in funding the European Football Championship. It goes without saying that there will be neither hotels nor roads built in Dnepropetrovsk and Odessa. The endless struggle between Yushchenko and Tymoshenko may eventually deprive Ukraine of the celebration of football.
Ukraine PM Calls On Defense Min To Resign
KIEV, Ukraine -- Ukraine's Prime Minister Yulia Tymoshenko on Wednesday called on Defense Minister Yuri Ekhanurov to resign over allegations of corruption, which the minister has vehemently denied.
Tymoshenko told a cabinet meeting she would write to President Viktor Yushchenko asking him to put a request before parliament for the minister's sacking, the Interfax agency reported.But Yushchenko rejected any such proposal in a statement issued from Istanbul, Turkey, where he was due to watch Shakhtar Donetsk play Werder Bremen in the UEFA Cup final."This is a political move designed to create trouble" in the country, he said, in comments issued by his press service.Earlier Wednesday, Mykola Syvulsky, the head of the finance ministry's finance inspection department, said there was a case to answer against the defense minister, Interfax reported.The allegations concerned not just suspicions over the purchase of food for the army at prices up to 40% over the market price, but a property transaction involving 300 hectares of land, he said.Ekhanurov has denied the accusations against him and called for state prosecutors to investigate.A former prime minister himself who is close to the president - Tymoshenko's sworn political enemy - he suggested the accusations against him had to do with the presidential race ahead of the 2010 election.Tymoshenko is considered a leading candidate for the next presidential election, while Yushchenko, who has said he will seek a second term, is currently polling as low as 2%, according to some surveys.
Tymoshenko told a cabinet meeting she would write to President Viktor Yushchenko asking him to put a request before parliament for the minister's sacking, the Interfax agency reported.But Yushchenko rejected any such proposal in a statement issued from Istanbul, Turkey, where he was due to watch Shakhtar Donetsk play Werder Bremen in the UEFA Cup final."This is a political move designed to create trouble" in the country, he said, in comments issued by his press service.Earlier Wednesday, Mykola Syvulsky, the head of the finance ministry's finance inspection department, said there was a case to answer against the defense minister, Interfax reported.The allegations concerned not just suspicions over the purchase of food for the army at prices up to 40% over the market price, but a property transaction involving 300 hectares of land, he said.Ekhanurov has denied the accusations against him and called for state prosecutors to investigate.A former prime minister himself who is close to the president - Tymoshenko's sworn political enemy - he suggested the accusations against him had to do with the presidential race ahead of the 2010 election.Tymoshenko is considered a leading candidate for the next presidential election, while Yushchenko, who has said he will seek a second term, is currently polling as low as 2%, according to some surveys.
Russia Says No To Ukraine $5 Billion Loan Request
MOSCOW, Russia -- Russia has decided not to lend Ukraine $5 billion, Deputy Finance Minister Dmitry Pankin told Reuters on Wednesday.
Ukraine asked for the funds in February to help its economy withstand the economic downturn and help pay for Russian gas."They proposed to borrow and the decision to offer such a loan was not made ... We analysed the situation and we said no," Pankin said, speaking in English.Ukrainian President Viktor Yushchenko, swept to power by the pro-Western "Orange Revolution" mass protests, has strained ties with Russia which fiercely opposes his goal of Ukraine joining the NATO military alliance.Europe, which depends on Russia for a quarter of its gas, is closely watching turbulent relations between Moscow and Kiev for signs of any future threat to European energy security.Ukraine received a second IMF loan tranche worth $2.625 billion last week, part of a $16.4 billion loan programme. It had been held up for three months in a dispute over budget policies.Pankin also said Russia had not made a decision about whether to loan money to Iceland, which asked for funds last autumn."About Iceland we didn't take any decision up to now. There are some questions about Iceland's financial situation ... And the second part of the story is that when we started our discussion then it was a different financial situation for us, we expected that our problems would not be so serious," he said."The question for us is are we ready to invest our National Wealth Fund in a not very liquid instrument ... I cannot say it is off the table but (it is) still under analysis."Iceland's economy nearly collapsed last year under the weight of billions of dollars of foreign debts, racked up by its now bankrupt banks, forcing it to take a $10 billion IMF-led rescue package.
Ukraine asked for the funds in February to help its economy withstand the economic downturn and help pay for Russian gas."They proposed to borrow and the decision to offer such a loan was not made ... We analysed the situation and we said no," Pankin said, speaking in English.Ukrainian President Viktor Yushchenko, swept to power by the pro-Western "Orange Revolution" mass protests, has strained ties with Russia which fiercely opposes his goal of Ukraine joining the NATO military alliance.Europe, which depends on Russia for a quarter of its gas, is closely watching turbulent relations between Moscow and Kiev for signs of any future threat to European energy security.Ukraine received a second IMF loan tranche worth $2.625 billion last week, part of a $16.4 billion loan programme. It had been held up for three months in a dispute over budget policies.Pankin also said Russia had not made a decision about whether to loan money to Iceland, which asked for funds last autumn."About Iceland we didn't take any decision up to now. There are some questions about Iceland's financial situation ... And the second part of the story is that when we started our discussion then it was a different financial situation for us, we expected that our problems would not be so serious," he said."The question for us is are we ready to invest our National Wealth Fund in a not very liquid instrument ... I cannot say it is off the table but (it is) still under analysis."Iceland's economy nearly collapsed last year under the weight of billions of dollars of foreign debts, racked up by its now bankrupt banks, forcing it to take a $10 billion IMF-led rescue package.
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