Update 3-russia Halts Lithuanian Dairy Imports Before Eu Summit

Taking aim at another sector, the Russian consumer protection agency Rospotrebnadzor said inspections of Lithuanian dairy imports had revealed “numerous violations” of quality and sanitary standards in products including cheeses and yoghurt. “We are seeing a sharp weakening of (Lithuania’s) position on protecting the rights and safety of consumers,” Rospotrebnadzor chief Gennady Onishchenko said, according to the Interfax news agency. Russia is also stepping up monitoring of Lithuanian meat and fish imports, state-run news agency Prime reported, citing an unidentified source. Rospotrebnadzor declined to comment. Lithuanian Agriculture Minister Virgilijus Jukna told reporters the government had received no “official news about halting milk or meat or fish exports”, but President Dalia Grybauskaite said her country’s patience was wearing thin. WTO COMPLAINT? “The situation which is developing at our border and in trade relations with Russia has been worrying for the past several weeks,” Grybauskaite told reporters. “It is necessary to prepare to refer the trade obstacles which Russian institutions are raising to Lithuania at the World Trade Organisation,” she said. Russia’s Onishchenko denied politics lay behind the suspension, but Kremlin critics have seen ulterior motives behind such trade restrictions in the past, including bans on wine and mineral water from Georgia and vegetables from the EU. “It is obvious that this is used as a means of political pressure”, said Nerijus Maciulis, chief economist at Swedbank in Lithuania, adding that around one fifth of the country’s dairy exports went to Russia, or 0.4 percent of national output. In Brussels, the European Commission said it had “complete confidence” in the quality of Lithuanian dairy products and called for discussions with the Russian side. “The EU has the most stringent system in the world when it comes to food safety,” Frederic Vincent, Commission spokesman for health and consumer policy, told a regular press briefing. Of the 15 former republics that became independent states when the Soviet Union disintegrated in 1991, only the Baltic states of Lithuania, Latvia and Estonia have joined the EU. But the EU’s Eastern Partnership policy, designed to draw six other ex-Soviet states closer to the European fold, has run up against President Vladimir Putin’s efforts to revive Moscow’s sway by promoting closer ties among its former vassals.

NEWSMAKER -Russia’s new central bank head shows independent streak

This is our main goal,” Nabiullina told reporters. “Let me say it again: monetary stimulus would not be effective in our view.” Such briefings mark a departure for the central bank, which until a few years ago did not even disclose the dates of its meetings. Nabiullina’s comments show her in tune with the concerns of ordinary Russians – and Putin voters. According to surveys by the Levada Center, a respected opinion research group, at least two-thirds of Russians consider inflation as the country’s most pressing economic problem. The second worry – poverty – comes a distant second. TO LISTEN AND TO HEAR Konstantin Sonin, a professor at the Higher School of Economics that is headed by Nabiullina’s husband Yaroslav Kuzminov, calls expectations of quick monetary easing “incompetent dreams”. Sonin doubts that there will be much meddling by the Kremlin in policymaking at the central bank. “The whole experience of Putin’s rule shows that when it comes to macroeconomic policies he trusts his advisers very much,” he said. “In fact, he has protected them from political pressure.” Artyom Konstandyan, chief executive of Promsvyazbank, acknowledged Nabiullina’s independence but had greater appreciation for her engagement with the financial community. “Banking has its own specifics that the current chairman will learn with practice,” Konstandyan told Reuters. “But there is a willingness not only to manage, but to listen and to hear, and it is greater than in the previous chairman.” Significantly, Ignatyev, who retired after 11 years in the has been retained by Nabiullina in an advisory role. The central bank has only limited scope to meaningfully influence the cost of credit to Russian borrowers, while overseeing Russia’s unruly collection of 1,000 banks poses huge challenges. But, under Nabiullina, it has simplified its interest-rate toolkit while offering longer-term funds at a narrower premium in a bid to improve the ‘transmission’ of its policy via the flow of affordable credit to the real economy. The bank’s clout is undeniable – it is one of the country’s most respected institutions and holds half a trillion dollars in reserves, an important buffer to protect Russia’s resource-dependent economy against external shocks.