Tag Archives: St. Petersburg

Putin’s Cronies Helped Russian Mafia In Spain, Prosecutors Say: Report

Vladimir Putin
Russian President Vladimir Putin attends a session of the Civic Chamber at the Kremlin in Moscow, Russia, on June 23, 2015.

One of Russia’s largest mafias operated out of Spain for more than a decade with help from some of Russian President Vladimir Putin’s cronies, prosecutors in Madrid said.

A 488-page complaint to the Central Court obtained by Bloomberg News alleged direct links between Moscow officials and the St. Petersburg-based crime organization Tambrov, which allegedly moved into Spain in 1996 to launder profits from its criminal activities.

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Russia getting on with World Cup job as FIFA fights scandal

ST. PETERSBURG, Russia (AP) — As he shared the stage with FIFA’s departing president Sepp Blatter, Russian President Vladimir Putin’s message was simple. FIFA may be in chaos, but Russia is getting on with the job.

“I’d like to emphasize again that all the plans to prepare for the World Cup will be fulfilled,” Putin said, standing alongside the embattled Blatter at Saturday’s preliminary draw for the 2018 tournament. “Hosting it is one of our key tasks.”

Against the backdrop of Swiss authorities investigating how the 2018 World Cup was awarded to Russia, the draw was held in St. Petersburg, both Putin’s home town and the site of the most troubled of all the 12 World Cup stadiums.

For years, the construction of St. Petersburg’s 68,000-seat arena — due to host a semifinal in 2018 — was a costly, repeatedly delayed symbol of Russian state inefficiency, so bad that Prime Minister Dmitry Medvedev publicly said it looked “disgraceful.”

Finally, almost a decade after construction began, it is close to completion. Estimated at 75 percent ready by project chief Vitaly Lazutkin, much of the remaining work is focused on installing seats and finishing off complex systems such as the retractable roof and movable pitch.

The final stages of the St. Petersburg build coincide with optimism that the 2018 World Cup, while beset by controversies over corruption allegations and racism by fans, will at least avoid the construction chaos that marred preparations for last year’s tournament in Brazil.

FIFA's President Blatter addresses next to Russia's President Putin during the preliminary draw for the 2018 FIFA World Cup at Konstantin Palace in St. Petersburg

It’s a “relaxing situation,” FIFA general secretary Jerome Valcke, who expects to leave office in February along with his longtime boss Blatter, told journalists Friday.

“Russia is really way on track and I have no concern. The next FIFA secretary general should be happy with the work that I give him because he will have a very organized World Cup.”

Russia getting on with World Cup job as FIFA fights scandal

The Petersburg stadium, provisionally titled the Zenit Arena, is set to cost 38 billion rubles ($650 million). Until the ruble dropped sharply in value last year against the backdrop of international sanctions and a low oil price, the same ruble budget was worth over $1 billion, which ranked it among the most expensive football stadiums in history.

Originally planned as a 45,000-seat arena by Zenit St. Petersburg’s owner — the Russian state-controlled company Gazprom — Russia’s successful bid to host the World Cup brought problems. Hosting a semifinal required an increase in capacity to 68,000, sending the partially-built project back to the drawing board.

FIFA, Blatter get back to World Cup business at Putin home

“The main problem that delayed the construction was that the stadium was redesigned three times,” project director Lazutkin said Monday. “That required quite a long time for redesign work and also for rebuilding the stadium.”

Since a Soviet-era stadium on the site was demolished in 2006, the Zenit Arena project has seen not only cost rises, but fraud investigations into subcontractors, the death of Japanese architect Kurio Kurosawa and political disputes.

MOS07. St.petersburg (Russian Federation), 25/07/2015.- Russian President Vladimir Putin (L) and FIFA President Joseph Blatter (R) attend the Preliminary Draw of the FIFA World Cup 2018 at Konstantinovsky palace outside St.Petersburg, Russia, 25 July 2015. St.Petersburg is one of the host cities of the FIFA World Cup 2018 in Russia which will take place from 14 June until 15 July 2018. (Rusia) EFE/EPA/MAXIM SHIPENKOV

Now the stadium’s roof has been fitted and work is under way to put in the seats, Lazutkin says the first games could be held in little more than a year’s time.

Calling the stadium “disgraceful” is no longer possible, he insists, adding: “Mr Medvedev said that earlier. Now he has a different opinion, as far as I know.”

One of Russia’s 12 World Cup arenas is raising concerns, however. Construction is fully under way at every stadium but the one in the western exclave of Kaliningrad, near the Polish border.

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That stadium was caught in a political tug-of-war between the regional and federal governments over its location. By the time the regional authorities’ costlier plan to put the stadium on an island prevailed, precious time had been lost.

The stadium’s design has only been signed off by a federal architecture watchdog in recent days, allowing work to begin. Worries over the stadium lying empty after the tournament also led to a cut in capacity by 10,000 seats to 35,000. Organizers say the reduced size will allow construction workers to make up for lost time.

“We have absolutely no doubts that the stadium will be ready on time and that everything will be up and running there soon,” organizing committee CEO Alexei Sorokin said Monday.

With less than three years to go until the tournament, Russian government revenues have contracted sharply under pressure from the low oil price, meaning that organizers are keen to save money.

A fall in the value of the ruble has meant organizers are swapping costlier imported materials and equipment for cheaper local alternatives, while many hotels and some infrastructure projects have been cut from Russia’s plans, reducing the total budget to 631.5 billion rubles ($10.8 billion).

The reason for removing the hotels, organizers say, was fears that luxury establishments could end up lying empty after the World Cup.

Sports Minister Vitaly Mutko said Friday that one of Russia’s main problems is that organizers don’t always know who to talk to at a rapidly-changing FIFA. At a time when officials are in custody and Blatter due to leave, Mutko said communication is “somewhat thwarted.”

Vladimir Putin Returns After Absence and Dismisses Rumors

President Vladimir V. Putin met with the president of Kyrgyzstan, Almazbek Atambayev, in St. Petersburg on Monday.

MOSCOW — President Vladimir V. Putin reappeared in public on Monday after a curious absence of more than a week, appearing healthy, offering no explanation and commenting wryly that things “would be boring without rumors.”

Rossiya 24, a state television station, showed Mr. Putin with the president of Kyrgyzstan, Almazbek Atambayev, at a palace in St. Petersburg. The two discussed Kyrgyzstan’s planned accession to a Russian-backed regional trade group.

The meeting reportedly began more than an hour late, prolonging concerns about Mr. Putin’s whereabouts, a subject that has obsessed Moscow and Russia for days.

Until Monday, the last confirmed public sighting of the Russian president had been at a meeting with Prime Minister Matteo Renzi of Italy on March 5. Mr. Putin abruptly canceled a trip to Kazakhstan and postponed a treaty signing with representatives from South Ossetia, who were reportedly told not to bother flying to Moscow.

Further stirring unease here, the Russian leader was absent from an annual meeting of top officials from the F.S.B., Russia’s domestic intelligence service.

The rumor mill churned, and among the possible explanations were that Mr. Putin had fallen ill with a virulent strain of the flu, that he had surreptitiously flown to Switzerland for the birth of his love child, that he had had a stroke and that he had been ousted in a coup.

Dmitry S. Peskov, the president’s spokesman, brushed off the health questions, saying that Mr. Putin’s handshake was so firm it was bone crushing, and that the president had been busy working.

Though Mr. Putin was mostly filmed sitting down, Mr. Atambayev volunteered to members of the news media in St. Petersburg that he and Mr. Putin had toured the palace grounds and that the Russian leader was by all appearances in good health.

“With your permission, Vladimir Vladimirovich, I would like to add something here,” Mr. Atambayev said, addressing the Russian leader before the news media. “Just now, Vladimir Vladimirovich drove me around the grounds, he was sitting behind the wheel himself. This was to dispel the rumors. I often hear different rumors about myself, this isn’t right. That is, the president of Russia not only walks, he races around, he gives guests rides.”

Mr. Putin’s departure from the public eye captivated Moscow’s political class, already uneasy from the war simmering in neighboring Ukraine and from the killing of the opposition leader Boris Y. Nemtsov on Feb. 27.

Before reappearing in St. Petersburg, on Monday morning Mr. Putin ordered a military exercise in western and northern Russia that put the Northern Fleet, the Western Military District and some airborne forces on full combat readiness, the Tass news agency reported. The exercise will test the readiness of 38,000 soldiers, 56 ships and submarines, and 110 planes and helicopters to defend Russia’s Arctic borders, Tass said.

U.S. Sanctions Over Ukraine Hit Two Russian Banks Hardest

WASHINGTON—Banks controlled by three billionaire friends of Russian President Vladimir Putin have seen about $640 million of assets frozen in the U.S. as retaliation for the Kremlin’s actions in Ukraine, according to U.S. government records.

The figures, not previously reported, show the surprising extent to which the economic sanctions imposed by the U.S. have pinched the pockets of some of Russia’s most politically connected firms.

Hit the hardest is Bank Rossiya, which had at least $572 million blocked in U.S. accounts, according to records released to The Wall Street Journal by the Treasury Department. That is equivalent to roughly 10% of its 2013 assets, at today’s exchange rate.

The St. Petersburg bank, whose founder Yuri Kovalchuk is alleged by the U.S. to be one of Mr. Putin’s “cashiers,” was described by the Obama administration as a personal bank for senior Russian officials.

Russian President Vladimir Putin, left, and billionaire Arkady Rotenberg attend the funeral of a former judo trainer in St. Petersburg in 2013.
Russian President Vladimir Putin, left, and billionaire Arkady Rotenberg attend the funeral of a former judo trainer in St. Petersburg in 2013. PHOTO: GETTY IMAGES

Also hit is SMP Bank, majority-owned by Arkady and Boris Rotenberg, two brothers who are childhood friends and former judo partners of Mr. Putin. They have amassed some of Russia’s biggest fortunes, built in part on lucrative contracts with the state and state-owned companies.

Their bank has had at least $65 million—equal to about 2% of 2013 assets—blocked across dozens of accounts in U.S. financial institutions, Treasury documents show.

Dozens of other Russian firms have been ensnared in U.S. sanctions, including a prominent weapons manufacturer. But none comes close to those amounts, reflecting the two banks’ exposure to Western money channels.

The figures also highlight the limited reach of such targeted sanctions—at least relative to the immense fortunes amassed by Russian oligarchs.

The Obama administration and the European Union have imposed several rounds of sanctions since the conflict in Ukraine began. Some mandated visa restrictions and the freezing of individual or company assets, while others sought to restrict Russian access to Western financing or technology.

The idea was to penalize the Kremlin’s inner circle and increase the pressure on Mr. Putin to change course. Yet, nearly a year after the Kremlin grabbed Crimea from Ukraine, there is no evidence the strategy has substantially affected Mr. Putin’s calculus.

Even as Western sanctions help push the Russian economy toward recession, Western officials say Moscow has continued to support and arm separatists in eastern Ukraine in a fight that has claimed some 6,000 lives.

Moscow says its annexation of Crimea reflected the will of the people, citing a vote held under occupation. It has denied aiding the rebels, and imposed its own countersanctions against individuals and some Western imports.

The U.S. and EU have warned of additional sanctions if a peace plan for Ukraine, reached last month, falls apart. There have been calls for more draconian sanctions, including cutting Russia off from the Western bank-transfer system.

But U.S. and European officials have indicated they aren’t seriously considering this option. Some Russian officials have said it would amount to an act of war.

More comprehensive restrictions on Russian business would be particularly sensitive in Europe, which relies on Russian energy imports. Washington has sought to coordinate closely with the EU because unilateral U.S. sanctions would lack the same impact.

Moscow maintains its annexation of Crimea reflected the will of the people living there. It has consistently denied aiding the rebels and imposed its own counter-sanctions against individuals as well as some Western imports.

Amid the renewed Cold War atmosphere, asset freezes targeting Mr. Putin’s longtime friends could contribute to even greater personal animosity.

Arkady Rotenberg had some real-estate holdings blocked in Italy last year, in what appears to be the only publicly disclosed instance of property frozen under the EU sanctions. Mr. Rotenberg acknowledged the problem in a recent interview with the Russian news agency Interfax, calling the freeze “an administrative arrest.”

The Russian parliament is considering a bill, dubbed the Rotenberg law, that would compensate Russian companies and individuals for assets frozen in the West. Mr. Rotenberg, whose net worth Forbes this year estimated at $1.4 billion, says he had nothing to do with the bill and needs no state subsidies.

Some Kremlin-connected oligarchs have minimized their exposure to Western financial markets, in possible anticipation of sanctions.

For instance, Gennady Timchenko, another billionaire friend of Mr. Putin, sold his long-held stake in major oil trader Gunvor just a day before he landed on the U.S. sanctions list in March 2014.

The Treasury Department released the documents after a request made by the Journal under the Freedom of Information Act, but wouldn’t comment further.

Bank Rossiya declined to comment. Mr. Putin has always denied any personal financial connection to the bank, but after the sanctions were imposed he announced that in solidarity, his government salary would henceforth be deposited there.

In a rare interview with Russian state television last year, Mr. Kovalchuk, the bank’s largest shareholder, dismissed the U.S. sanctions as immaterial for the bank or his own finances.

He also called on Russian businesses to become more patriotic and minimize their exposure to the West. “People understand, intuitively, on which side of the barricades business stands,” he said.

At the time, Bank Rossiya had $435,433,344 sitting in a single U.S. account with a financial firm called Computershare Inc., according to the Treasury. Computershare declined to comment. The company says on its website that it manages dividend payments and shareholdings on behalf of its clients.

In 2013, Bank Rossiya reported total assets of 338 billion rubles, which is about $5.6 billion at today’s exchange rates. The assets frozen include accounts held by Sobinbank, a wholly owned subsidiary.

The nature of Bank Rossiya’s U.S. assets in Computershare and elsewhere couldn’t be determined.

“It would appear that Computershare administers investments held by Bank Rossiya outside of Russia,” said Lee Wolosky, a former White House official and a sanctions expert now with Boeis, Schiller & Flexner law firm.

The dollar figure on the account could reflect the market value of securities, which might be harder to sell in a hurry, Mr. Wolosky said.

It’s unclear whether Bank Rossiya attempted to wind down its Western holdings. The bank’s second-largest blocked account in the U.S., worth $73,132,260, was with J.P. Morgan Chase .

J.P. Morgan, which declined to comment, served as the U.S. correspondent bank for Bank Rossiya as well as SMP Bank.

Igor Iliukhin, an SMP spokesman, said assets frozen in the U.S. are “inessential” and that sanctions have only a “slight impact” on the bank’s activity. He said the blocked assets are “much less” than the $65 million figure contained in Treasury reports, but declined to elaborate.

SMP Bank had total assets of about 170 billion rubles in 2013, which is roughly $2.8 billion at current exchange rates.

Unlike Bank Rossiya, SMP Bank didn’t have most of its U.S. assets in a single account, but maintained hundreds of accounts at major financial institutions. Its biggest account was with Citibank N.A., holding $6.4 million. SMP also had millions sitting at Deutsche Bank, MasterCard and others. The banks declined to comment.

In announcing sanctions against the Rotenbergs, Treasury said the brothers received some $7 billion in contracts for Sochi Olympics. Boris Nemtsov, the prominent Putin critic who was killed in Moscow last week, had detailed the Rotenbergs’ alleged no-bid contracts in Sochi in a 2013 report.

Arkady Rotenberg has denied he benefited financially from his connections with Mr. Putin.

“If we are talking about business, it is often harder for me than for my competitors,” he told Russia’s Interfax news agency in October. As for SMP Bank, Mr. Rotenberg said it “didn’t suffer much” from sanctions because most of its business is in Russia.

Besides the banks, Russian firms with significant cash tied up in the U.S. banking system include weapons maker KBP Instrument Design Bureau, with nearly $10 million frozen in four accounts at Citibank, Treasury documents show. Citibank again declined to comment.

KBP makes and exports antitank weapons, air-defense systems and mortars, among other armaments. It referred questions to its holding company where a spokeswoman wasn’t available for comment Thursday. It is unclear why KBP, which had been sanctioned even before Ukraine for alleged dealings with Iran, would even risk keeping any assets in the U.S.

Because of privacy laws, Treasury redacts the names of sanctioned individuals whose assets have been frozen, although it identifies institutions. There aren’t many such individual accounts, and the largest single individual account has $2 million, at Brown Brothers Harriman. The bank declined to comment.

There are mildly comical instances too: East Ukraine’s separatist Donetsk and Luhansk People’s Republics set up PayPal accounts holding $5,354 and $637, respectively, according to the Treasury documents. The accounts were apparently registered under the militias’ real names. PayPal froze them. The company declined to comment.

“The bullets are in each of us” – Stunning photos from Russia’s marches for Boris Nemtsov

Russian opposition supporters carry photos of Boris Nemtsov in Moscow

When Russian opposition leader and former deputy prime minister Boris Nemtsov was shot to death on Friday in Moscow, the country lost many things. It lost a charismatic and forceful political organizer.

Opposition activist and former Russian Prime Minister Mikhail Kasyanov participates in the rally mourning Nemtsov

It lost a prominent critic of Putin and of his war in Ukraine. It lost a sense that, even if journalists and activists are unsafe in Russia, at least high-profile political leaders did not have to fear for their lives.

The Cathedral of St Basil, on Red Square, is visible behind the marchers in Moscow

In a smaller and more immediate way, Russia also lost a leader for a protest rally that Nemtsov had been helping to plan for Sunday in Moscow.

Two days after his murder, the rally went ahead, but primarily as a memorial for the man who was to lead it. A smaller rally was also held in Saint Petersburg; mourners gathered in the Ukrainian capital of Kiev as well.

A woman holds flowers at the site where Nemtsov was shot to death, in view of the Cathedral of St Basil


Ralliers carry a banner reading “Heroes never die — these bullets are in each of us” | SERGEI GAPON/AFP/Getty

Police stand guard in Moscow | YURI KADOBNOV/AFP/Getty

Flowers laid by supporters rest at the spot where Nemtsov was shot to death. | Sefa Karacan/Anadolu Agency/Getty

St. Petersburg

Thousands also marched in Saint Petersburg, Russia’s second-largest city. Police have estimated that 6,000 people attended.

Ralliers carry a banner reading, “Boris Nemtsov, don’t forget, don’t forgive” | OLGA MALTSEVA/AFP/Getty

Sergey Mihailicenko/Anadolu Agency/Getty

Sergey Mihailicenko/Anadolu Agency/Getty

Sergey Mihailicenko/Anadolu Agency/Getty

Riot police stand guard as ralliers march past. | Sergey Mihailicenko/Anadolu Agency/Getty

A woman holds a portrait of Nemtsov amid Sunday’s rally. | Sergey Mihailicenko/Anadolu Agency/Getty

Ralliers carry the flags of Russia, Ukraine (blue and yellow), Saint Petersburg (red), and the political party Yabloko. | Sergey Mihailicenko/Anadolu Agency/Getty

Ralliers hold signs reading “The sleep of reason produces monsters” and “Freedom to Savchenko – You can not afford two heroes.” Nadiya Savchenko is a Ukrainian pilot who was captured by pro-Russia rebels and is currently on hunger strike in a Russian prison. | Sergey Mihailicenko/Anadolu Agency/Getty



Small crowds of supporters have also gathered in the Ukrainian capital of Kiev. Nemtsov was critical of Russia’s annexation of Crimea and its military involvement in eastern Ukraine. His position was deeply unpopular in Russia, but appreciated in Ukraine, where he was viewed as a politician sympathetic to Ukraine and a contrast with Putin’s policies of exerting control over Kiev. Ukrainian President Petro Poroshenko called him “a bridge between Ukraine and Russia.”

Mourners cross themselves at a ceremony for Boris Nemtsov in Kiev’s Independence Squara. Former Ukrainian Prime Minister Yulia Tymoshenko stands at center. | SERGEI SUPINSKY/AFP/Getty

Supporters lay flowers for Nemtsov at the Russian embassy in Kiev on Saturday | Vladimir Shtanko/Anadolu Agency/Getty

A man in a Putin mask and a Nazi SS uniform carries a sign reading “Bloody Putin” | SERGEI SUPINSKY/AFP/Getty

Plunging Ruble Unsettles Russians, Poses Test for Putin

People wait near a sign advertising exchange rates in Moscow on Tuesday.

MOSCOW—As Russian President Vladimir Putin has ratcheted up the conflict with the West for most of the year, the economic fallout on ordinary Russians has been limited.

Suddenly, though, the plunging ruble is reawakening fears of rising prices and the kind of financial crisis Mr. Putin has sought to put behind his country. As the ruble hit a record low, falling as much as 20% against the dollar Tuesday,

Moscow residents rushed to buy electronics and other big-ticket items and drained rubles from ATMs to swap them for dollars and euros—signaling a new feeling of vulnerability among Russians and a fresh challenge to their leader.

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From St. Petersburg to Siberia, money changers ran out of foreign currency and were raising exchange rates. Sberbank , Russia’s state savings bank, and Alfa Bank, Russia’s largest private lender, said they were experiencing a rush for dollars and euros.

“The demand is enormous. People are bringing piles, huge piles of cash. It is madness,” said Kamila Asmalova, a manager at a Moscow branch of Sberbank. The branch ran out of foreign currency by 2 p.m., she said.

Lanta Bank, a midsize Moscow lender, said its foreign counterparts would be unable to send foreign currency Wednesday as aircraft that typically transport cash are full.

Apple Inc. said it halted online sales in the country because of theruble’s volatility, and IKEA announced it would raise prices there.

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The ruble’s continued fall despite the Russian central bank’s move to raise interest rates to 17% rippled across global markets Tuesday, fueling a selloff in emerging market currencies and stocks.

In the U.S., the turbulence was more muted, as the Dow Jones Industrial Average closed down 0.7%. The yield on the 10-year Treasury, a traditional haven, fell to 2.07%, its lowest closing level since May 2013.

People wait in a line to pay for her purchases at the IKEA store on the outskirts of Moscow, Russia, Wednesday, Dec. 17, 2014. The collapse of the national c...

Abroad, Russia’s crumbling currency—driven by sanctions and eroding oil prices—raises the threat of a currency market contagion, particularly for emerging economies facing headwinds, such as Turkey and Indonesia.

At home, economists say the Russian central bank’s rate gambit is certain to push the country’s faltering economy into recession by raising borrowing costs. Even before the rate increase, the central bank estimated the economy could contract as much as 4.7% next year if oil remains around $60 a barrel.

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On Tuesday, Economy Minister Alexei Ulyukayev said that the government would introduce some “regulatory measures” on the foreign-exchange market, but that it wasn’t discussing any capital-control measures.

The big question is whether Russia’s economic troubles will turn into a real political challenge for Mr. Putin, whose approval ratings remain above 80% and who retains tight control over politics and the economy.

People enjoy refrestments in a street side cafe, whilst figures indicating the spread on the dollar-ruble rate of an exchange office, are visible through the...

The faltering economy could fortify the already strong backing for the Kremlin in its confrontation with the West, since Moscow blames the problems on enemies.

As the White House said Tuesday that President Barack Obama would sign a bill turning Russian sanctions into law, Russian Foreign Minister Sergei Lavrov told television station France 24 that “Russia will not only survive but come out much stronger.”

Banks were already bracing for the impact of high interest rates. UBP fund manager Pavel Laberko said banks would be the first to be hit by the higher cost of borrowing, with weaker institutions having to halt operations.

“A lot of [market] participants are in serious condition because of these events,” Bank of Russia Deputy Chairman Sergei Shvetsov told reporters Tuesday. “The choice the central bank made [to raise rates] was between very bad and very, very bad.”

Global banks also have curtailed the flow of cash to Russian entities this week. Banks including Goldman Sachs Group have started rejecting requests from institutional clients to engage in certain ruble-denominated repurchase agreements and other transactions designed to raise cash, according to people familiar with the matter.

A woman waits in a line to pay for her purchases at the IKEA store on the outskirts of Moscow, Russia, Wednesday, Dec. 17, 2014. The collapse of the national...

With credit more expensive after the rate increase, rising prices are set to hurt consumers. The Association of Retail Companies expects food and drink prices to rise by as much as 15% in the first quarter of next year, according to its spokesman.

Russians have in recent days rushed to spend their rapidly weakening rubles on electronics and cars before their prices are expected to rise. M.video, an electronics retailer, attributed around one-third of current sales to such purchases.

Shoppers reported long lines at IKEA stores in Moscow after the company announced price increases in the coming days. Last month,Apple raised the price of the iPhone 6 by 25% in its online store in Russia as the U.S. dollar continued to rise against the ruble.

Deputy Prime Minister Olga Golodets warned that rising prices would lead to an increased number of people living in poverty, a rare government acknowledgment of impending economic pain.

Maria Semyonova, a 30-year-old home maker from Nizhny Novgorod around 200 miles east of Moscow, said she was expecting tough times paying for her mortgage and baby on her husband’s salary and her maternity pay. She said the family was cutting back on New Year’s presents, buying theater tickets for her parents rather than spending thousands of rubles on gifts.

Still, Mrs. Semyonova said she and her husband agreed with Mr. Putin that the West was at fault for the crisis. “I think that Putin is acting appropriately given the situation,” she said.

Mr. Putin’s main supporters—poorer people and state workers—often don’t have savings and their expenses are mostly in rubles. The ruble’s slide is mostly hitting the middle classes who sometimes vacation abroad and have savings.

A man pushes a cart with purchases to his car at an IKEA store on the outskirts of Moscow, Russia, Wednesday, Dec. 17, 2014. The collapse of the national cur...

Tatiana Boytsova, a 28-year-old finance professional from St. Petersburg, said her colleagues spent 40 minutes in line trying to exchange rubles. She said she and acquaintances were canceling trips abroad even if tickets couldn’t be refunded, since costs there would simply be too high.

Ms. Boytsova said she wasn’t expecting much of an end-of-year bonus, and was even thinking about trying to sell her ticket to an opera Friday. “At the moment, money feels better than the opera,” she said.

Some retailers were putting up prices on Tuesday after holding them steady for several weeks, so as not to scare customers while they sold off stock.

A store in central Moscow selling Apple products temporarily removed old price tags for computers and gadgets on Tuesday, while printing out new ones with prices higher by as much as $50 in ruble terms.

Russia launches first-ever gas trading in St. Petersburg

The central office of Saint Petersburg Commodity and Stock Exchange (RIA Novosti / Vadim Zhernov)

Russia, the world’s second-largest producer of natural gas, has launched its first auction of natural gas on Friday at the St. Petersburg International Mercantile Exchange (SPIMEX). It will be Europe’s largest natural gas trading post.

The project is intended to create a more competitive market for natural gas prices, which at present are more-or-less tied to oil. Now, independent producers will have access to a broader range of buyers.

The exchange will facilitate up to 35 billion cubic meters of gas annually, with Gazprom, Russia’s largest producer, maintaining the right to sell a half of that, and independent producers the remaining 17.5 billion cubic meters.

During the first trading session, Gazprom and eight independent gas producers will sell 882.6 million cubic meters of gas for November volumes.

The gas will be delivered to two compressing stations – Nadym (552.6 million cubic meters) and Vyngapurovskoye (270 million cubic meters), which are connected to Russia’s gas transportation system (GTS). The supplies are not eligible for re-sale.

Russian Prime Minister Dmitry Medvedev endorsed the launch, saying “Today, SPIMEX begins its first natural gas trading session, and I sincerely congratulate them.”

The head of the exchange, Aleksey Rybnikov, opened trading which will run until 3pm local time (11:00 GMT). Friday’s auction launched bidding for delivery in the next month, but in the future the exchange plans to evolve into weekly and daily trading.

“Our mission was to create the conditions to ensure these auctions were executed. At the St. Petersburg Stock Exchange, we plan to start organized gas trading. This is a fairly lengthy process. Before, there were preliminary algorithms associated with trading platforms that Gazprom put together. Our task now is that these are acceptable to all,” Deputy Energy Minister Kirill Molodtsov said Thursday.

SPIMEX is the largest commodity exchange in Russia.

Igor Sechin, CEO of the world’s largest listed oil company, was appointed chairman of its board of directors in May.

SPIMEX was first registered in May 2008, receiving its official license to trade the following month. In September 2008, the exchange registered its first trades in diesel and jet fuel. It now offers spot and derivatives contracts, and covers a wide variety of petroleum products.

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