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Hungary Heads for Tough Loan Talks, Turkmenistan Faces Grain Shortfall

Plus, Putin mulls changes to a controversial bill on civic groups and Georgian clerics find no Satanic fingerprints on electronic IDs.

by Ky Krauthamer, Ioana Caloianu, Joshua Boissevain, and Sofia Lotto Persio 11 July 2012

1. Hungary to begin talks with international lenders


Hungary is set to begin negotiations 17 July on a precautionary loan with the International Monetary Fund and EU, but the latest in a string of rows over the country’s central bank threatens to complicate the process, Business New Europe writes.


Budapest has been seeking a line of credit worth some $15 billion to draw on if needed as it tries to pull out of a deep slump caused by excessive personal and state borrowing. But attempts by the conservative government of Prime Minister Viktor Orban to have more say in the central bank have led to repeated clashes with the EU, forcing the government last week to drop a proposal to allow government officials to attend bank meetings.


Andras SimorAndras Simor
The latest spat centers on a financial transactions tax meant to reduce employers’ social insurance payments as the economy teeters on the edge of recession, Reuters writes.


The tax would apply to the central bank as well as other financial institutions, but critics say this is forbidden by EU rules. Business New Europe quotes central bank governor Andras Simor as calling the tax "illogical, dangerous, and illegal" and a threat to the bank’s independence.


2. Heads roll over poor Turkmen wheat harvest


Turkmenistan’s poor wheat harvest has cost the jobs of the agriculture minister and many other agriculture officials, Reuters reports.


President Gurbanguly Berdymukhamedov dismissed Agriculture Minister Merdan Bairamov 6 July, Central Asia Online reports, citing the state news agency. Berdymukhamedov also sacked the head of the Association for Bread Products.


Just last week, Berdymukhamedov presented a Cadillac SUV as a gift to officials in Lebap Province for exceeding their grain quota, but it appears that other regions are lagging well behind. With the harvest almost completed, Turkmen media are reporting a yield of just over 1 million tons of wheat, well below the target of 1.6 million tons, according to Reuters.


The wheat shortfall is apparently to blame for sharp rises in the state-controlled price of bread and flour over the weekend. reports that a loaf of bread now costs three times as much as last week, or about $0.21, and domestically produced flour doubled in price to $0.35 per kilogram.


“Given the near Soviet-style state of the Turkmen economy it is hard to consider the increase in wheat prices as a step toward price liberalization. It is rather a mere response to disappointing harvest figures,” regional analyst Lilit Gevorgyan told


Kazakhstan wheat harvest 350Harvest time in Kazakhstan, where wheat is a major export. The Turkmen government wants to increase wheat production.


3. Russian parliament approves WTO membership


Russian lawmakers voted 10 July to ratify their country’s membership in the World Trade Organization and become its 156th member. Russia’s entry into the WTO, which is responsible for setting international trade rules, would mark the conclusion to an arduous 18-year negotiating process. Among the conditions for joining, RT writes, Russia must reduce tariffs and open up certain sectors of its $1.9 trillion economy.


The 238-208 vote in the State Duma came a day after the nation’s highest court ruled the accession protocol was in line with the constitution. Russia can join the WTO following ratification by the Federation Council, parliament’s upper house, and signature by President Vladimir Putin, but critics argue that accession will harm Russia’s economy. Sergei Mironov, leader of the opposition Just Russia party, said joining the WTO would not make the economy more competitive. Radio Free Europe quoted Mironov as saying, "We will in fact become a mere provider of raw materials to the world.”


4. Putin backs amendments to controversial bill on civic groups


Russian President Vladimir Putin supports amendments to a proposed law regulating the funding of independent civic groups but will brook no delays in implementing it, RIA Novosti reports. The bill would require groups receiving funding from abroad to label themselves "foreign agents," publish twice-yearly financial statements, and undergo yearly audits. Violators could face fines of up to 1 million rubles ($30,000) or up to four years in prison.


Lyudmila AlexeyevaLyudmila Alexeyeva
To make the bitter pill easier to swallow, Putin also promised to triple the state funding for such organizations from 1 billion to 3 billion rubles ($90 million). However, Moscow Helsinki Group head Lyudmila Alexeyeva said she doubted the human rights organization she founded would see any of this money. She also said the group would refuse any Western grants to avoid the "foreign agent" label.


According to The Moscow Times, Putin denied that the law represents an attack on civil liberties and added that "foreign agent" is a normal way of referring to organizations that receive foreign funding.


Putin also defended a new measure criminalizing libel but said it should be softened by removing the threat of prison sentences for offenders.


5. ID cards not demonic, Georgian church assures believers


The Georgian Orthodox Church’s main governing body has reassured its members that there is no spiritual danger in using new electronic identity cards. The cards “do not represent the mark of the Antichrist,” the Holy Synod announced 5 July, according to AFP.


The electronic IDs, introduced in August, allow secure access to online state services and serve as digital signatures on official documents.


Some church members became concerned and started a petition to ban the cards when rumors began circulating that an electronic chip in the cards contained the “number of the beast, 666.” The Orthodox Church is considered the country’s most trusted institution.


The Holy Synod, made up of 38 clerics, also asked the government to provide the option of choosing between electronic and alternative documents, Democracy and Freedom Watch reports. Deputy Justice Minister Giorgi Vashadze said although the electronic IDs are not yet compulsory, the government is not looking into alternatives.


Ky Krauthamer is a senior editor for TOL. Ioana Caloianu and Joshua Boissevain are TOL editorial assistants. Sofia Lotto Persio is a TOL editorial intern.
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