The Political and Economic Results of March 2013

Abstract

In March, Russia was faced with the unsavory prospect of a considerable loss of funds kept by Russian enterprises and individuals in Cyprus, traditionally one of the most attractive jurisdictions for Russian businesses A significant portion of those funds was frozen or seized by the Cypriot authorities in an attempt to mitigate the dire financial problems besetting their own country. It turned out that, in fact, Russia had no means of responding to that challenge – the credit previously extended by Russia to Cyprus had not resolved any of the problems that were plaguing that country, and furthermore, Russia did not have any prerogatives to control the domestic economic policy of an EU member country, and was clearly reluctant to directly negotiate with the EU in order to protect Russian deposits in Cypriot banks. Elvira Nabiullina was nominated as head of the RF Central Bank. Nabiullina’s nomination was seen as a compromise in the intra-government struggle between the supporters and opponents of a tight monetary policy. The State Duma adopted the first reading of a draft law amending Russia’s parliamentary election procedures. Introduced for consideration by the State Duma by Vladimir Putin, the draft law is designed to restore single-mandate electoral districts and to allocate 50% of State Duma seats to their representatives. It also reduces the existing election threshold to 5%. However, the Draft Law erects a new electoral barrier in the form of a ban on persons convicted of serious crimes standing for parliament. It should be noted that, among other things, the ‘serious crime’ category comprises numerous types of economic offences carrying sentences that can easily be used as a means of political persecution.