'We will have to take into account this style of dealing with partners in the future, though this scornful approach toward partners mainly affects the Europeans, not us':  Putin reacts to the aborted GM deal.   Finance Minister Alexei Kudrin was in London yesterday to discuss the envisaged issue of $17.8 billion in sovereign eurobonds - the selling of which is a core part of the government's deficit-reducing strategy.  A bond issue would 'be likely to draw keen interest from investors because Russia,[...] is in far better shape financially than a decade ago' says the New York Times.   Kudrin is planning changes to the budget which would see funds originally designed to recapitalize banks redirected to flagging industrial giants (such as Avtovaz) and the jobless, as the economic situation has been less harsh than expected.  In ...

After months of painstaking negotiations, GM has scrapped the Opel sale on the basis that it was 'no longer in the best interests of GM, now that the environment for car sales has started to improve', reports the Independent.  The decision comes just after Opel's labor force had agreed to contribute $390 million in annual savings.  'Management had planned a release saying that they will proceed with Magna, so there must have been a fundamental change of view within the board', the FT quotes an insider as saying.  The Russian government is planning to raise $1.87 billion to bail out ailing carmaker Avtovaz, most of which will be apparently allotted to bad debts, and some of which will be allocated to modernization and on job creation, Prime Minister Vladimir Putin has reportedly announced.  Daimler Trucks will proceed ...

Jason Bush in Forbes suggests that Russia's recovery may be buoyant: 'while the Russian government is still cautiously forecasting 2 percent GDP growth in 2010, many independent economists are already predicting growth of as much as 5 percent next year'.  Oleg Deripaska's heavily-indebted RusAl has made a deal to sell 1.68 million tons of aluminum to Chinese state corporation Norinco over seven years.  Renault COO Patrick Pelata has told the press that whilst the French car giant will support bankruptcy-skirting Avtovaz, the company will not supply the cash booster shot that the Russians allegedly want.  Corporate loan portfolios and overdue corporate loans fell slightly in September, as the ruble gained in value.  The Russian Gold Industrialists Union has announced that gold production rose 14.6% in the first nine months of 2009, year-on-year, an increase they attributed to a number ...

In advance of a meeting with the heads of some of the world's largest sovereign wealth funds, Putin has defended Russia's crisis management, reiterated a commitment to 'a liberal market economy' and emphasized that when the crisis has passed, the government will diminish its intervention in the economy.  The central bank has made an unexpected cut in its key re-financing rate to 10% from 10.5% as a result of dwindling industrial production.  Economic Development Minister Elvira Nabiullina has apparently cautiously suggested that the country's GDP decline could be lower than the official forecast.  A Standard & Poor's analyst has said that Russia is already caught in the second wave of the financial crisis.  Sberbank will provide a loan to Rusal to help it pay back its debt to Alfa Group.  VEB may acquire a ...

The Moscow Times reports that the government spent $10.7 billion of the state budget on fighting the financial crisis in the first six months of the year.  A Russian-Indian project to build a titanium factory in east India has been jeopardized by a shareholder dispute.  Telephone tycoon Yevgeny Chichvarkin, who is exiled in Britain, says he may set up a business there, 'maybe something in the service industry'.  The former Yevroset chairman says he has no fear of the charges held against him in Russia and does not plan to return until it becomes 'a free country'.  The ex-President of Avtovaz, Boris Alyoshin, will become an adviser to the Director General of Rostekhnologii.  Booming retailer Magnit will sell 11.2 million new shares to help finance expansion plans.  Russia's airline industry saw passenger numbers fall ...

The chairman of the German government-backed trust designed to oversee the sale of Opel has said that GM cannot afford to keep control of the European unit, as it needs to focus on its fortunes stateside.  According to the New York Times, the company's Vice President maintains that it wishes to sell but that certain questions remain.  The president of AvtoVAZ, Boris Alyoshin, has resigned.  Russia plans to create a holding company to put together the state's stakes in the country's two biggest car makers, Avtovaz and Kamaz.  Car manufacturer Gaz is adapting to the conditions of a low-demand market, says its CEO.  The Moscow Times reports that the number of consumers planning to buy a car within the next year has doubled to 6%.  VTB has acquired rights to a controlling stake in developer Don ...

President Medvedev has openly complained about the amount of red tape small businesses have to plough their way through to develop.  Medvedev has suggested that small and medium-sized businesses are key factors in economic modernization.  The President has instructed the Federal Anti-Monopoly Service and the Economic Development Ministry to increase their controls over the system for placing state purchases.  The Federal Anti-Monopoly Service may also fine fertilizer manufacturer FosAgro up to $16,000 for not submitting information on its production costs.  Billionaire Oleg Deripaska's Basic Element has agreed to build a temporary parking lot in Moskva-City on a site formerly designated for the Russia Tower.  UralChem and Acron have announced they stopped production after potash miners cut off their supplies.  Investment bank UralSib's profits dropped 38.1% in 2008.  RusAl has begun talks on fourth-quarter sales of aluminum ...

Oleg Deripaska will not be settling a $2.4 billion lawsuit brought against him in Russia, as he had hoped, but in London.  During his trip to Lake Baikal, Prime Minister Putin said it was not entirely impossible that the paper and pulp mill there owned by Deripaska, which closed in October, may begin operating again, as it does not harm the environment.  Workers from car manufacturer Avtovaz will protest against the firm's decision to cease production for August.  'Russia's failure to build a quality car is... astounding,' says Alexei Bayer in the Moscow Times.  Hermitage hedge fund will take its fraud case against Renaissance Capital Holdings to the US in search of evidence.  Mobile TeleSystems will buy 51% of Comstar United TeleSystems for $1.28 billion.  An op-ed piece in the Moscow Times suggests that ...

The Financial Times has an interesting one on Magna's gamble (as a Trojan horse for Russia) to snap up GM's interests in Opel to give the weakened Oleg Deripaska "ownership" of what would be the largest car manufacturer in the world.  Motivating this aggressive business move is not business sense, nor even elaborate geopolitical machinations to impact the German polity, but rather fears over the collapse of industry and the spread of more "Pikalyovo-like" protest events.  At least according to some people interviewed for this piece.

"If the Opel deal does not go ahead, Russia's car industry is only going to survive with the help of the state because it is just not competitive," says Elena Sakhnova, industry analyst at VTB Capital, the Russian investment bank.

Gaz and Avtovaz are significant employers

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Russia's international reserves rose $6.1 billion last week as the central bank bought foreign currency to slow down the rise of the ruble as oil prices increase.  The Moscow Times reports upon efforts to reduce Russia's dependence upon imported poultry by developing the domestic industry.  A lawsuit launched by a car dealer against the government's increase in tariffs on used cars has been rejected.  Debt-addled car manufacturer AvtoVAZ has approved a cost-cutting anti-crisis plan and the company will spend $2.54 billion from 2010 to 2012 to bolster sales.  The government continues its attempts to support the car industry; the Industry and Trade Ministry has proposed doubling the price ceiling for buying cars that could be subsidized by the government.  In the bid for Opel, carmaker GAZ reportedly has the role of 'industrial partner' in Canadian ...