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Hungary’s Economy Takes Off, Medvedev Gets Punk’d

Plus, Rosneft seeks a sanctions shelter, and Kosovo arrests an imam as a crackdown on radical Islam continues.

by S. Adam Cardais, Ioana Caloianu, and Anders Ryehauge 15 August 2014

1. Hungarian growth beats expectations

 

Hungary’s economy expanded at its fastest pace in eight years in the second quarter of 2014, Bloomberg reports.

 

Gross domestic product rose 3.9 percent compared with the same period last year, exceeding the already robust year-on-year growth of 3.5 percent in the first quarter, according to Portfolio.hu.

 

Industrial production, construction, and agriculture were the main drivers of growth, statistician Pal Pozsonyi told reporters, according to Bloomberg, which notes that increased car production at Daimler AG and Volkswagen AG plants have helped Prime Minister Viktor Orban rejuvenate the country’s industrial base.

 

Increased consumption was likely driven by rising investments, which were in turn spurred by the central bank’s stimulus program, Portfolio.hu writes.

 

The buoyant economic news sets Hungary apart from most of the EU as well as Eastern Europe, where growth was sluggish in the second quarter, Bloomberg reports.

 

The figures come after a string of warnings to Hungary from officials in Brussels to lower the country’s worryingly high public debt. And Hungary has recently managed to keep its annual budget deficit within EU limits only after the European Commission threatened to freeze EU funding in 2012 if it did not do so.

 

In the coming months, Portfolio.hu predicts the economy will cool somewhat, as car production eases off its peak, the effects of stepped-up government spending before the April parliamentary elections wear off, and banks possibly tighten lending after being forced by the government to take losses on some foreign currency-denominated mortgages.

 

2. Hackers unleash hoax tweets from Medvedev’s account

 

Russian Prime Minister Dmitri Medvedev’s love of technology came back to bite him 14 August when his Twitter account was hacked, the Guardian reports.

 

Dmitri Medvedev
In the series of hoax tweets that followed, Medvedev resigned because he was “ashamed” of the government, criticized Vladimir Putin, and repudiated Russia’s annexation of Crimea. “#CrimeaIsNotOurs please retweet,” one post read, a play on the popular Russian-language hashtag #CrimeaIsOurs.

 

As for future plans, Medvedev has his sights set on becoming a freelance photographer. Medvedev enjoys photography, the Guardian notes.

 

After confirming the hack, the government’s press service said Medvedev’s account had since been buttressed. The group Shaltay Boltay (Humpty Dumpty) seemed to claim credit on Twitter, according to the Guardian.

 

In the past, Shaltay Boltay evidently infiltrated several email accounts and iPhones belonging to Medvedev, as well as the email of at least one other top official. After the group published leaked emails of a deputy prime minister last month, Russia’s communications regulator blocked its blog and Twitter account.

 

Since rising to president in 2008, Medvedev has embraced technology, especially social media like Twitter, Facebook, and Instagram. In contrast, Russian President Vladimir Putin claims to not even own a cell phone.

 

Under Putin’s leadership, the government has tightened its grip on the Internet, including requiring popular bloggers to register with authorities and banning anonymous Wi-Fi use in public.

 

3. Report: Sanctions-hit Rosneft asks Moscow for $45 billion

 

Russian oil giant Rosneft is reportedly asking Moscow for a huge bailout after being hit by U.S. sanctions.

 

Citing the business daily Vedomosti, Radio Free Europe reports that Rosneft head Igor Sechin, a longtime ally of Vladimir Putin, has asked the government to help the company repay a nearly $45 billion debt, perhaps by using the National Wealth Fund to buy Rosneft bonds.

 

Reuters notes that the fund is earmarked for Russian pensions. It called Rosneft’s request “one of the most stunning of several proposals” for Moscow to help companies hit by Western sanctions over Russia’s aggression in Ukraine. Sechin said the company needed the cash due to a ban on certain U.S. credits and loans.

 

 

Moscow is considering the request, but analysts told Reuters the odds are long. If turned down, they said, Rosneft can fall back on billions of dollars in loans from China.

 

The majority state-owned company is the world’s largest listed oil producer. The U.S. added Rosneft to its list of sanctions on 16 July, after imposing an asset freeze and visa ban on Sechin, Bloomberg reports.

 

Rosneft is a linchpin of a Russian economy heavily dependent on revenues from oil and natural gas sales.

 

4. Kosovo arrests imam on terrorism charges

 

Kosovo continued a crackdown on Islamist extremism 13 August with the arrest of an imam suspected of plotting terror, Reuters reports.

 

Police detained the unnamed, 30-year-old imam in the eastern town of Gjilan for allegedly recruiting and participating in terrorist cells. In a statement, police accused the imam of “being one of the main inspirers of jihad.”

 

A day later, on 14 August, Kosovo police remanded to custody 40 men detained on 11 August who are believed to have fought with radical Islamist forces in Syria and Iraq. In 60 raids aimed at uncovering recruitment centers in Kosovo, police also seized explosives and other munitions.

 

After the Monday arrests, authorities said imams were also under investigation, Balkan Insight reports. Balkan Insight also reports that another terror suspect was detained 13 August.

 

Due largely to a volatile mix of high unemployment and a young population, Kosovo officials have long feared the fledgling country could become a hotbed of radical Islam. This week President Atifete Jahjaga said, “Kosovo will not allow itself to become a shelter of extremism.”

 

5. Human rights group urges energy transparency initiative to sanction Azerbaijan

 

Human Rights Watch is urging that Azerbaijan’s membership in an international coalition on transparent governance in energy-producing states be suspended because of an ongoing crackdown on civil society there.

 

HRW told the Extractive Industries Transparency Initiative (EITI) “that Azerbaijan is blatantly violating EITI rules,” in spite of “claiming to international audiences that it’s a leader on open civic participation and good governance.”

 

EITI, made up of representatives from governments, companies, and civil society organizations, encourages greater transparency about state revenues from oil, gas, and mining. But HRW said the Azerbaijani government’s pursuit of nongovernmental organizations casts serious doubts on its commitment to EITI principles.

 

“For some time independent groups working on revenue transparency issues in Azerbaijan have faced restrictions that impede their work. However, in recent months their situation has worsened dramatically, as the government has frozen their bank accounts or refused to register their grants, leaving the groups unable to draw on funds,” HRW said in a statement.

 

Even groups that sit on the EITI steering committee in Azerbaijan have been affected, HRW said.

 

Among several cases HRW cited is that of Gubad Ibadoglu, who sits on EITI’s international governing board and whose Economic Research Center handles the finances for the EITI civil society coalition in Azerbaijan. With its account frozen, neither the center nor the coalition can register new foreign grants with the Justice Ministry, as required by law, HRW notes, and the coalition has not been able to pay rent since June.

 

HRW noted that although EITI has taken note of the situation, its board has not publicly pushed Azerbaijan to change course.

 

Azerbaijan also holds the rotating presidency of the Council of Europe’s Commission of Ministers, an intergovernmental group that aims to uphold human rights. 

S. Adam Cardais is a TOL contributing editor. Ioana Caloianu is a TOL editorial intern. Anders Ryehauge is a TOL editorial intern.
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