Eastern approaches

ON THE tightly controlled Russian airwaves, Ekho Moskvy, a liberal radio station, has always stood out. Despite being two-thirds owned by Gazprom Media, an arm of Russia’s gas monopoly, it has aired acerbic criticism of the Kremlin and invited guests blacklisted by state television.

This freedom is now under threat. Alexei Venediktov, the station’s long-serving editor, is set to lose his place on the board, as are two independent members. Journalists on the board will be replaced by managers and an independent seat will go to a former classmate of Dmitry Medvedev, Russia’s outgoing president. Mr Venediktov will stay as editor but the board will be tipped in the state’s favour, making it easier to sack him. Gazprom Media says this is just a corporate shake-up, but Russia's recent political protests make that unlikely.

The Kremlin tolerated Ekho Moskvy partly as a safety-valve for the discontented intelligentsia and as a useful tool to refute Western criticism of Russia's lack of freedom of speech. Ekho was also guaranteed by Vladimir Putin, the once and future president, who often invited Mr Venediktov to media gatherings. Their relationship has been like an autocratic leader’s to the wise fool, licensed to speak the truth. This made Mr Venediktov almost untouchable.

Echo Moskvy was thus not only an institution for the liberal intelligentsia but also a channel of communication for the Kremlin. But after December’s dubious Duma election, Ekho Moskvy’s role as one of the media resources of the protesters put new pressure on Mr Venediktov. Mr Medvedev apparently demanded his sacking. Instead, Mr Venediktov was invited to ask Mr Putin tough questions in a televised telephone call-in session.

Now Mr Putin appears to have removed his protection. Last month, at a gathering of national news editors, he publicly accused Ekho Moskvy of acting in America’s interest and of “pouring diarrhoea on him from day till night.” What may have offended him most was Mr Venediktov’s refusal to follow some other Russian editors and celebrities in endorsing his presidential candidacy.

“Do you not trust me?” an irritated Mr Putin asked Mr Venediktov. “Because I trust you.” As Mr Venediktov explained, Mr Putin did not give an order to pursue him or Ekho Moskvy. But his public criticism was a green light to those keen to carve up the media market at a time of political uncertainty.

MOST people living in Latvia know speak Russian. And perhaps half of the country’s ethnic Russian population (around 27% of the population) does not speak Latvian fluently, or even at all. So would it not be fair to make Russian an official state language, in which monoglots could fill in official paperwork, deal with public officials, and engage in political life? From the outside, that proposal, to be decided by a referendum on February 18th, looks superficially reasonable.

Yet most Latvians strongly resent the idea. They speak Russian because of Soviet rule, which started in 1940 when their country was wiped off the map as a consequence of the Hitler-Stalin pact. Latvia returned only in 1991 when the Soviet Union collapsed. Soviet rule brought not only forced migration of Russian speakers, but also compulsory linguistic Russification. 

The referendum is bound to fail. But its significance lies in the polarisation of Latvian politics that it represents, and stokes. Ethnic-Russian voters (around half have Latvian citizenship, either by birth or naturalisation) were incensed by the election result last year, when the centrist parties of the prime minister Valdis Dombrovskis and the ex-president Valdis Zatlers shunned a coalition with the main pro-Russian party (and election winner) Harmony Centre. Instead the country’s leaders went into a coalition government with a radical right-wing party, the National Alliance which goes under the cumbersome moniker “All for Latvia!–For Fatherland and Freedom/LNNK”.

This party started collecting signatures for a petition for a referendum to force all publicly financed schools to use Latvian as the sole language of instruction. Their argument was that this would entrench the national language and unify the country. Critics said it was a provocative attempt to chip away at the russophone Latvians’ slice of the public pie. The petition failed: it collected only 120,433 signatures, which is not enough to initiate a referendum on this subject. But it produced a perfect pretext for pro-Moscow activists, such as the former leader of the Latvian branch of the National Bolshevik Party Vladimir Linderman, the leader of the radical-left Osipov’s party Yevgeny Osipov, and the youth movement “United Latvia”, to launch one in response, pronouncing it a protest against the attempts to assimilate minority children in the country.

This petition collected 187,378 signatures, more than the necessary 10% needed to trigger a referendum. The poll has prompted a resurgence of Latvian national feeling. Old gripes and grudges are getting a thorough airing on both sides and politicians are grandstanding. The mayor of the capital Riga, Nils Ušakovs, who is also the leader of the “Harmony Centre”  is supporting the referendum, despite having tried to moderate his party’s image and appeal to ethnic-Latvian voters in recent years. President Andris Bērziņs first said he would abstain, but then urged people to “go and protect Latvian language”. Mr Dombrovskis has declared that “the status of Latvia’s core values is not questionable”, urging people to vote “no”. Some lawmakers, mainly right-wingers, have asked the Constitutional court to cancel the referendum as unconstitutional.

Some fear that the tacit reconciliation of recent years, in which Latvian residents of all stripes just got on with their lives rather than arguing about history, may be jeopardised. Whether or not the referendum will be followed by protests and uprisings from the Russian community, as promised by the initiators, the bill for the referendum will be a heavy one. Latvia has so many other things to worry about.

SERBIA, like the rest of the Balkans, is covered in a deep blanket of snow. In central Belgrade, though, a less bucolic sight beckons. Large patches of pavement have been cordoned off because of the threat of death from falling icicles. On February 7th a woman was killed by a 4kg block of falling ice. Across the rest of the country another 20 are reported to have died. A state of emergency has been declared. No wonder Boris Tadic, Serbia’s president, who is touring affected areas, looks exhausted. Mr Tadic has been denying persistent rumours of his ill health but he is not the man that Silvio Berlusconi, the former Italian prime minister, once dubbed “President Clooney” because of his resemblance to the American heart-throb.

He is likely to look even more haggard after a referendum on February 14th-15th in the four Serb-dominated municipalities of northern Kosovo. In it Serbs will vote to have nothing to do with independent Kosovo dominated by ethnic Albanians. The plebiscite will not help Mr Tadic in his bid to secure EU candidate status for Serbia when EU foreign ministers meet at the end of the month. In the meantime he is running out of time to strike a deal a precondition the EU has set: Serbia and Kosovo must agree to sit together in regional gatherings.

Of course, even if such a deal were struck, Serbia's candidacy might remain in limbo. Angela Merkel, the German chancellor, has made it clear that she wants Serbian institutions in Kosovo to be dismantled. This is a reference to Serbia’s not-so-discreet police and intelligence services in the parts of Kosovo where the referendum is to take place.

Continue reading "Serbia's cold dead of winter"»

OUTSIDERS find the Polish-Lithuanian spat the most incomprehensible in Europe. How come two countries with so much common history and so many common interests get on so badly? Is it just the appalling personal chemistry between some senior officials? Or is it, absurdly, about spelling? Poles in Lithuania want to spell their names using letters like ł and ę in official documents. (We can't use them, or most other diacritics, in the print edition of the Economist because our typeface doesn't have those characters).

I have not met any Lithuanian, even on the nationalist fringe, who believes that the authorities in Vilnius have handled this issue absolutely perfectly from the very beginning. Lithuanian politicians have habitually promised more than their parliamentarians are willing to vote for, or their officials are able to implement. It is easy to see why Poles feel cross about that.

But the real problems lie deep in history. It is only the symptoms, not the causes, that are on the menu of the current spat. To get a flavour of what's going on, try reading this sour commentary, or this more balanced piece (both in English) on the Lithuanian Tribune website. It takes apart a recent piece (link in Polish) in Rzeczpospolita (a leading Polish daily) by Jerzy Haszczynski, which accuses Lithuania of wobbling towards Russia. The Lithuanians remember that the Polish minority in 1989-91 was used by Soviet loyalists to try to derail the independence cause. The argument soon goes back to who did what in 1831, and before that to the joint Lithuanian-Polish state of the early modern era (which both sides remember differently).

As I pointed out in my column in European Voice (the Economist's sister paper in Brussels) one big problem is that Poland is big (nearly 40m) and Lithuania is small (3m). Poles are very good (quite understandably, given their history) at seeing themselves as victims. They find it much harder to understand that some of their neighbours find them quite intimidating, linguistically, culturally and even politically. Another important psychological factor is that Lithuanians have learned through their own ghastly historical tragedies that stubborness pays off, whereas weakness is penalised. A concession to Poland on a matter that (at least in their eyes) is of vital national importance would send a signal to Russia that Lithuania can be pushed around. The result is a siege mentality in Lithuania, and outrage in Poland at promises unfulfilled

It is possible to detoxify these kinds of relationships. But it takes a lot of effort on both sides, whereas politicians so far seem far keener on posturing aggrievedly than trying to be constructive . For the time being, the best on offer is containment. The news that NATO's Baltic air policing mission is to be extended, in effect indefinitely; and the inching forward of the Polish-Lithuanian gas pipeline, shows that the broader concerns are not being forgotten.

The latest twist is that the OSCE's minority-rights commisioner Knut Vollebaek is looking at the issue. He visited both countries late last year and will do so again. His recommendations are private, but they are thought to include a mixture of points about process and substance. On process, the most useful thing for now would beto lower the rhetorical temperature, on the lines of "if you don't have anything constructive to say, then better not say it.". On substance, an important point is to remind the Lithuanians is that human-rights questions are not about reciprocity. This is about a government treats its own people, not about how it gets on with its neighbours. 

The most easily fixable point may be on the spelling issue in documents. The right to spell one's name in the standard Latin alphabet (including the letter 'W' which does not exist in Lithuanian) is hard to contest. This is not just a problem for Poles: it's a nuisance if your name is Williams). And the law is probably against Lithuania on this one. The signage issue is more tricky: getting local authorities to accept that a shop can be called a Sklep (in Polish) will be hard. The question of property restitution in the Vilnius region is thornier. It is difficult in theory because its pre-war status, under Polish rule, is seen as an occupation by the Lithuanians. In practice, the problem is more about what might politely be called "administrative capacity" in the public institutions concerned.

But by far the most important issue is education. Lithuania is trying to improve the quality of Lithuanian-language teaching in schools (amid a wrenching decline in school numbers) and has required the Polish-language schools to teach more subjects in Lithuanian. This has sparked a furious protest by local Poles, readily echoed in Warsaw.

And that, in fact, is the nub of the problem. So long as Polish-Lithuanian relations are hostage to the grievances (real, exaggerated or wholly imagined) of the local Poles, and in particular of their sometimes dodgy local leaders, this row will continue to poison the air. The local Poles' ability to call up heavy artillery from Warsaw in local disputes makes the Lithuanian leadership feel beleaguered and even betrayed: they start questioning the loyalty of their ethnic-Polish compatriots to the Lithuanian state itself. The best thing that Poland can do is to make sure that those fears seem groundless.

The most disastrous turn of events would be if Polish public opinion started pressuring politicians to take an even tougher stance. That has not happened yet, for which the Lithuanians should be grateful. But it could. Many will be wishing Mr Vollebaek the best of luck in his thankless task.

ANYONE who takes financial-market indicators as a guide to the real world must be mad or a banker. But it is still interesting to note, as Bloomberg has just calculated, that on risk-adjusted returns Polish government bonds are a better bet than either German bunds or US Treasuries. The Bloomberg ranking gives Poland the top spot with an 8.3% return in local currency in the three years to February 6th, against 4% for German government debt and 3% for the US paper. Polish debt was only ninth in total returns, but shot up the index because of its lower volatility.  

That is better news for lenders than taxpayers: Polish borrowing costs are still quite high by international standards, at around 6%. But it is a feather in the cap for Poland's finance minister, Jan Rostowski, who has piloted the country almost unscathed through the economic storms in the euro zone.   

Poland is striving to get the budget deficit below 3% of GDP this year, which is a condition of eligibility for euro zone entry in 2015. However Mr Rostowski is backing away from that target: he told the BBC that Poland would join the common currency "only when it is safe to do so".

Along with AA- credit ratings for Estonia and the Czech Republic (better than Italy's), the Bloomberg calculations help highlight the relative economic strength of countries that were once part of the continent's "east European" periphery.

ARE corrupt officials disproportionately fat? George Orwell thought so: the pigs that ran Animal Farm were “porkers” who gorged themselves on milk and apples. Perhaps the World Bank agrees. In a report released last week, “Fighting Corruption in Public Services: Chronicling Georgia’s Reforms” , the authors note that the country’s notoriously bent traffic police of early 2000s were “mostly corpulent”. 

Of course, not all fat officials are corrupt. Kakha Bendukidze, architect of many of Georgia’s anti-corruption reforms, is blessed with a fuller figure. Nor does thinness prevent kleptocracy: think of President Mobutu of Zaire. 

But the question is not as flippant as it may appear. When the Rose Revolution occurred in 2003, corruption, crime and dysfunctional public services plagued Georgia. Notoriously, the traffic police would even trump up charges against pedestrians to solicit bribes. Yet by 2010, Transparency International ranked Georgia the best corruption-buster in the world. 

What can others learn from Georgia’s success? Leadership and political will are all important. So too is establishing early credibility: in early 2004, the government thought it had eight months to get quick results. Most famously, 16,000 traffic police officers received their waddling orders overnight. In an effort to sustain public support, attention-grabbing symbols matter.

The fight took place on many fronts simultaneously. Ideological purpose lent clarity to the government’s efforts. Driving out corruption became part of a broader, libertarian effort to roll back the state; a smaller government would give fewer opportunities for graft. To push through their reforms, they needed new staff – often young and western-educated – and salaries big enough to ensure they avoided temptation.

Some lessons lean towards David Brent-style management-speak: “develop unity of purpose and coordinate closely”; “tailor international experience to local conditions”; “use communication strategically”. But read in context, they make sense: a small team of officials at the highest levels met regularly to drive through reforms. They adopted other countries’ practices with enthusiasm, such as Italian anti-Mafia legislation and German police training techniques. Keeping public opinion onside was critical, although it was an area where the authorities could have done better.

Most controversial will be the recommendation to consider adopting “unconventional solutions”. In Georgia, that often meant cutting corners. Filming the arrests of senior figures on corruption charges helped communicate the government’s efforts to the public, but did nothing for due process. Similar was the decision, in light of the state’s empty coffers, to negotiate cash payments with jailed officials in return for their release than to keep them in jail at the tax-payers’ expense.

Did the government strike the right balance here? Key officials claim they had no alternative: extraordinary times called for extraordinary measures. Others are less certain. Some institutions, most notably the Ministry of Interior, remain overly powerful. Here, the report adopts the cautious, consensus-seeking tone: issues remain, some progress has been made, but more needs to be done.

Recent events suggest that the government’s authoritarian streak is alive and kicking. New regulations on political party funding aim to limit the ability of Bidzina Ivanishvili, Georgia’s richest man, to use his wealth to drive the government from power. A coalition of leading non-governmental organizations claim the changes “jeopardize freedom of expression and freedom of property” and create “an uneven election environment”. 

Meanwhile, the pardon in early December of two Israeli businessmen, Ron Fuchs and Ze’ev Frenkiel, who were imprisoned last year for attempting to bribe the Prime Minister, highlights concerns about judicial independence. The government called it a humanitarian decision, as both men were in poor health. But on the same day the Ministry of Justice announced a settlement with their company, Tramex, which shaved $73 million dollars from the arbitration award against Georgia. Officials deny any connection between the two; not everyone is convinced.

The report chimes with Georgia’s efforts to sell itself as a model to fledgling democracies in the Arab world. It also underlines Mr Saakashvili’s rehabilitation on the international stage, which took a battering following Georgia’s disastrous war with Russia over South Ossetia in 2008. Last week, President Obama received his Georgian counterpart in the White House, where he praised Georgia’s reforms, and discussed deeper cooperation over defence and free trade. 

Mr Ivanishvili also took his battle to Washington last week in the form of op-eds in the New York Times and the Washington Post. Complaining of “a super-centralized, almost neo-Bolshevik style of governance, which exhausted itself long ago”, he urged Mr Obama to help ensure that Georgia’s planned elections are free and fair. 

That will be an acid test. Georgia needs stronger institutions and checks and balances on executive power. But none of this should obscure the country’s real progress in recent years. That key politicians continue to favour the ballot box over street demonstrations is an important development. So too are its fitter, slimmer officials.

THE cold weather in Europe and worries about the reliability of Russian gas supplies is sending prices soaring. In Britain they have reached levels not seen since early 2006, when prices spiked after Russia cut off all gas supplies to Ukraine and an explosion disabled the UK's Rough storage gas platform. 

ICIS Heren, a market research firm, notes that British prices on Monday reached 93p per therm (p/th), the highest since March 17 2006 (when a combination of an explosion at Britain's main Rough storage facility and a Russian-Ukrainian gas spat spooked the market) . The British price is up from 60.7 p/th on January 31st. Prices in France are 25% higher since Friday, at 101.77 p/th, and in Germany 20%.

Germany’s biggest energy utility, E.ON, said last week that its imports from Gazprom were down 30% on February 3. Russia blames a sharp increase in demand from its European customers. The prime minister Vladimir Putin has ordered Gazprom to give preference to domestic customers.

Everyone involved stresses that this is not an emergency. Europe's gas storage has improved in recent years and supplies are diversified by the availability of liquified natural gas (LNG). But the price spike comes just as the EU's favourite big pipeline project, Nabucco, which aims to bring gas from Central Asia and the Caucasus to Europe via the Balkans and Turkey, seems to have foundered. Turkey seems to favour a rival Russian-backed project, South Stream. Only a clear commitment from Azerbaijan can save Nabucco, and the omens don't look good. That may be good news for some cheaper, rival projects, such as the BP-backed South East European Pipeline (which unlike Nabucco mostly uses existing infrastructure) and two smaller projects, the Interconnector Turkey-Greece-Italy (ITGI) and the Trans-Adriatic Pipeline (TAP).

THEY have been called "worms", "violent and inept slum-dwellers", and "suckers". And yet hundreds of them, exasperated about austerity measures, political incompetence and lack of public consultation over laws, keep coming out on to the freezing winter streets of Bucharest and other Romanian cities to urge the president and government to resign.

"Now is the winter of our discontent—Suckerspeare" read one banner in Bucharest's University Square—the same spot where anti-Communist protesters were beaten and killed in the early 1990s in clashes with government-controlled miners. Now the demands are more diverse: no to shale-gas exploration and gold-mining with cyanide, yes to the return of the long-defunct monarchy, higher pensions, lower taxes, more bicycle paths.

Others are simply asking for politicians to respect them. And after two weeks of protests, it seems that the politicians have started to listen. Or at least to find some scapegoats.

On Monday Teodor Baconschi, the foreign minister, was sacked after writing about the "violent and inept slums" that were home to the protestors, to be compared with the rest of "hard-working Romania." Then Iulian Urban, a deputy from the ruling Democratic Liberal Party (PDL), resigned after calling the protesters "worms".

On Wednesday President Traian Băsescu finally broke his silence with a televised speech in which he admitted there was a "rupture" between him and part of the population. He said that austerity was needed to restore Romania's economic health, and complained that it was "unfair" to be labelled as a "dictator", as some protestors have done.

Yet Mr Băsescu conceded that he needs to "reduce the blunders I sometimes make in public", such as the one that sparked the protests—his row with a respected doctor who opposed the government's plan to partially privatise the health-care system.

The opposition, meanwhile, is trying to capitalise on the anger movement, by organising parallel demonstrations. General elections are due in November, and the Social-Liberal Union is riding high in the polls with about 60% support, while the PDL languishes at around 11%.

This week Romania's constitutional court gave the opposition another boost by ruling against a government plan to hold local elections at the same time as parliamentary ones. The unpopular PDL had wanted to merge the two so as to postpone the local campaign by a few months.

But the advent of a centre-left government later this year is unlikely to save Romanians from more austerity. The country has contracted another $5 billion loan from the IMF, on top of a $27 billion rescue package agreed in 2009 with the IMF and the EU. And with growth forecasts being slashed all around the region as the euro-zone crisis bites, Romania's winter of discontent has few chances of turning into a glorious summer.

(Photo credit: AFP)

IT WAS a swift, and surprisingly productive, about-turn. After declaring war on the IMF and repeatedly rejecting calls from the EU to change contentious laws, Viktor Orbán, the Hungarian prime minister, insisted this week in Brussels that he was open to discussion. "We are ready to consult on all issues," he told the Wall Street Journal. "Some disagreements are still there, but I am in an optimistic mood. I think we are very close to our targets now." 

Arguably, he had little choice. Hungary wants a financial safety-net from the IMF and EU. But any such deal must be green-lit by the EU, which has launched infringement proceedings against Hungary over its controversial central-bank law, the independence of its data ombudsman and its judicial reforms. In theory it is the Hungarian parliament rather than Mr Orbán that has the say on rewriting laws, but there is little danger of the faithful Fidesz flock objecting to the rapid about-turn.

Mr Orbán's charm offensive had fast, and impressive, results. Markets were reassured: the forint, which had plummeted against the euro ealier this month, rallied to less than 300 to the euro, and yields on Hungarian debt fell.

Mr Orbán was doubtless feeling bolstered by a massive demonstration in Budapest last Saturday, when at least 100,000 protestors (400,000, according to the interior ministry) took to the streets to show their support for the government. The protest, organised in part by right-wing journalists, was one of the largest since the change of system in 1989 and showed that the ruling party can still bring out far greater numbers than the opposition.

Many of the protestors carried placards attacking the EU and the IMF, doubtless unaware that even as they marched for sovereignty, Mr Orbán was preparing to surrender it in Brussels.

But there is still a long way to go before any agreement is signed. The IMF is now criticising Hungary's new flat-tax law, which would need a two-thirds majority in parliament to overturn. José Manuel Barroso, head of the European Commission, remains wary. A separate row over Hungary's budget deficit could lead to the freezing of EU development funds.

The question of judicial independence is likely to remain a sticking-point. Mr Orbán is forcing hundreds of judges into early retirement at the age of 62. Tünde Handó, a friend of the Orbán family and the wife of a prominent Fidesz MEP, has been appointed head of the new National Judicial Authority. (In response government supporters ask why the commission is so quiet about the parlous state of justice in Romania and Bulgaria.)

The United States shares the EU's concerns, says Eleni Tsakopoulos Kounalakis, its  ambassador to Hungary. She warns that the judicial reforms place "tremendous power" in the hands of a political appointee for nine years. American suggestions for including checks and balances were all ignored.

Pressure is also rising over media freedom.  Vaira Vīķe-Freiberga, a former Latvian president who now heads an EU advisory panel, has sharply criticised what she labels the government's "extraordinary concentration of power". She has called for Hungary to reconsider its media regulation, which, she says, "may be in contravention of various fundamental principles".

Klubrádio, a liberal radio station that has often acted as an unofficial opposition in Hungary, is turning into a cause célèbre in Brussels and an increasing irritant for Mr Orbán's government. The station is immensely popular in Budapest, especially after purges of independent-minded journalists at the state broadcast media. But it will soon be forced off the air in the capital; its frequency has been handed to an obscure rival that submitted a higher bid and that plans to broadcast music rather than talk.

This week in Brussels Neelie Kroes, the digital-agenda commissioner, met György Bolgár, Klubrádio's star presenter, and András Arató, its CEO. Ms Kroes described the latest developments as "worrying", noting that "high music content has been given priority over political commentary and discussion".

No IMF deal will be contingent on the fate of Klubrádio. But the station's uncertain future is certainly not helping Hungary's cause. This may be why Ms Kroes, according to one of her tweets yesterday, has been talking to Tibor Navracsics, Hungary's deputy prime minister, about "a solution for media freedom and pluralism". The station, your correspondent predicts, will be saved.

A FEW years ago I spent some time with Zek Morina (pictured). Each year, between May and October he and his family, their 360 goats and eight Sharr dogs troop up the mountains to Tushovice behind the town of Prizren in southern Kosovo. Then, on market day, someone treks down to Prizren and sells the big cheeses you can see on the shelves for €4 a kilo.

If Mr Morina’s cheese was cut into tiny, delicate little morsels, packaged and labelled as organic, natural and good for you (as it is), it could probably sell in London or Paris for at least seven times that amount.

Of course, the problem is that there is no way to get Mr Morina’s cheese from Tushovice to Tesco (or, more likely, an expensive specialist deli). Moreover, Kosovo is not yet ready to export dairy products like Mr Morina’s into the European Union.

Mr Morina’s story came back to me when I read a report on Bosnia's cheese industry by Populari, a Bosnian think-tank. It comes at a time when the country is agog at the prospect of the demise of its dairy sector. Simply put, the Bosnians have not done what they need to do on EU sanitary rules. This means that when Croatia joins the EU next year (assuming a referendum on accession is successful this weekend) it will no longer be able to accept its neighbour's dairy produce.

In fact, now that Bosnians are finally inching towards the formation of a government, and a prime minister has been approved, they may just be able to get their act together in time to avert this catastrophe.

The Populari paper looks at the development of specialist Bosnian cheese producers, who are already several steps ahead of the likes of Mr Morina. It focuses on Eko Vlasic, a co-operative. "Possibly without even realising it," the paper says, "Eko Vlasic is getting ready to take part in what is called the ‘experience economy’. The concept... treats physical products (goods) in the same league as services. It... is no longer enough to offer only goods and/or services, as consumers are now looking for experiences.”

How can these producers get their stuff out to European consumers? First, the report argues, they need to register their cheese names. This can be done in Bosnia, and they can then be protected at the EU level. This, for example, is what stops Welshmen selling Camembert, or Swedes from selling fake Stiltons or Sardos.

The think-tank goes on to point to a possible model. “Just like in Bosnia, the picturesque mountain meadows of Switzerland are suitable for cheese production. Traditional Swiss cheese is not produced in large factories, but in rural small farm dairies.”

The Swiss and cantonal governments have long supported their farmers. “This policy has enabled the farmers to maintain the high level of quality, which together with clever marketing, ensures high profits. The very same story could be told in Bosnia too.”

I look forward to the day I can buy a small Vlasicki in London.

VLADIMIR PUTIN is nothing if not consistent. The Russian prime minister’s latest response to the popular protests that shook his dozen-year rule last month is to contend that only he can steer his country through the shoals of chaos and stagnation. His assertion came in a newspaper article laying out his reasons for seeking another presidential term in March.

The spectre of anarchy is an old trope among Russian rulers seeking to justify their autocracies. No coincidence, then, that Mr Putin, who likes to compare himself to strong-willed 19th-century reformers, titled his manifesto "Russia is Concentrating," a quote from Prince Alexander Gorchakov, the 19th-century foreign minister who described Russia’s renewal following its devastating defeat in the Crimean war.

Mr Putin criticised a “constantly recurring problem in Russian history”: what he called the urge for revolution. “Today people are talking about various ways to renew the political process”, he writes. “But what are we supposed to be negotiating about?”

Mr Putin may be attempting to court the tens of thousands of largely urban, middle-class protesters who took to the streets to denounce the fixing of parliamentary elections in December. But by paying lip service to their demands he has only drawn attention to his central dilemma: crack down and risk bigger demonstrations, or ease up and undermine the carefully cultivated perception of authoritarian dominance.

Yulia Latynina, a political observer, recently pointed out that Mr Putin’s apparent belief that concessions to public opinion display weakness means “you actually do show weakness when you compromise, something the public perceives just like a shark senses the blood of a wounded fish”.

Mr Putin has used his entire political toolbox to try to undermine the opposition. He trotted out President Dmitry Medvedev to issue another call for easing restrictions against political parties. On Monday the Kremlin introduced his most significant promise to parliament: a bill that would revive the direct elections of governors. Mr Putin cancelled these in 2005.

But the vague stipulation that parties nominate candidates “following consultations with the president, who will set the procedures for such consultations” has largely discredited the measure.

Some took the reassignment of Vladislav Surkov, the Kremlin's chief ideologist and the brains behind Russia’s “sovereign democracy”, as the deepest nod to the protesters. But Mr Surkov's appointment to the position of first deputy prime minister actually looks like a reward for his hard work during a scheduled reshuffle.

The choice for Mr Surkov's replacement appears more significant: Vyacheslav Volodin, a loyal enforcer from Mr Putin’s United Russia Party expected to be a reliable overseer of the presidential election. His appointment follows the promotion of other close allies of Mr Putin, including Sergei Ivanov, a steely former KGB officer, to be his chief of staff. The regime appears to be closing ranks.

Finally, the masquerading of Mr Putin’s loyal allies as reformers has returned in the person of Alexei Kudrin, who was forced out as finance minister in September. Mr Kudrin joined the protests last month, but showed his cards soon afterwards when he lauded Mr Surkov’s reappointment as a sign that the government was ready to begin serious reform. Yesterday he admitted that his efforts to act as a mediator between the government and opposition had failed.

Although Mr Putin will almost certainly win re-election in March, how much real power he retains will largely depend on his handling of the election. Experts agree that he will want to win in the first round to preserve his aura of invincibility. The elections commission is set to select final candidates tomorrow. Most predict that either Mikhail Prokhorov, an oligarch, or Grigory Yavlinsky, a veteran liberal, will be ditched. Both are seen as Kremlin-approved figures meant to add a sheen of legitimacy to the process.

Moscow’s next big protest takes place on February 4th. If it attracts a larger and more varied group of protestors than the last demonstration, on December 24th, some think Russia’s elites could start to believe their positions would be more secure under another leader.

Still, the uncomfortable fact for advocates of democracy is that even the apparently progressive middle-class Russians who praise life in western countries benefit from Russia's vast corruption, which gives many of them a stake in the system.

So far Mr Putin’s “concessions” have fallen flat. But the real battle will come if an increasingly emboldened opposition continues to undermine the promises of stability that have underpinned his tenure. Its course may depend on how far he is willing to go to stay in power.

THE Czech Republic’s decision to grant Oleksandr Tymoshenko asylum has prompted speculation about whether the country is becoming a base for exiled allies of his wife Yulia, Ukraine’s jailed former prime minister and the heroine of the Orange Revolution. The answer is: not yet.

Mr Tymoshenko is the second member of his wife's circle to have fled Kiev for Prague. (Last year Bohdan Danylyshyn, her long-time economy minister, settled here.) Mr Tymoshenko has told the Ukrainian service of Radio Free Europe that he left Ukraine because he wanted to deprive the authorities there of a lever to pressure his wife, whom they want to “destroy”.

The seven-year prison sentence handed to Mrs Tymoshenko last year for signing a gas deal with Russia has done more than anything to isolate the administration of her arch-rival, President Viktor Yanukovich. In December the European Union postponed signing a free-trade deal with Ukraine because of the case. Mrs Tymoshenko's supporters say Mr Yanukovich wants to stop her from running in parliamentary elections this October.

The Czech Republic was a natural choice for her husband, who has business interests here and is registered to reside in the upscale suburban village of Lidice. Charged in Ukraine as a co-defendant in newly opened criminal cases against his wife—a billionaire who made her fortune in Ukraine’s murky natural-gas business in the 1990s—Mr Tymoshenko has been tight-lipped about the nature of his Czech dealings, which appear to centre on real estate.

He may also have been encouraged by the Czech authorities’ decision to grant amnesty to Mr Danylyshyn, whom the Ukrainian government accuses of squandering $2m of public funds during his time in office. Mr Danylyshyn ended up here by chance, after Ukrainian investigators lured him from Germany to their Prague embassy for questioning. Promised he would not be detained, he was nonetheless arrested by the Czech police on a Ukrainian request. He applied for asylum from jail.

Still, Mr Danylyshyn points out that Ukrainians have had close ties with Czechoslovakia since at least the 1920s, when many intellectuals and other refugees fled the Communist regime. Although he and Mr Tymoshenko are the sole high-profile asylum cases here, Ukrainians make up the Czech Republic’s largest minority, many of them working in low-paid jobs. Mr Tymoshenko’s speedy asylum bid has angered some of those who have spent years waiting for decisions on their own residency applications.

Prague’s significance to the Ukrainian opposition has undoubtedly grown. Mr Danylyshyn set up a non-profit group here to promote reform in his home country and lobby western governments last year. “We’re trying to unite Ukrainian progressive forces in various countries”, he said, “to develop democracy in Ukraine based on European values”.

The Czechs are also happy to stick it to Ukraine, which has condemned Mr Tymoshenko’s asylum as an excuse to stash money for his wife. Karel Schwarzenberg, the forthright foreign minister, characterised Ukraine’s response to Mr Danylyshyn’s asylum last year as a “fit”. Czech diplomats expect worse this time.

But Czech human-rights groups want Mr Schwarzenberg to do more for Ukrainians. The pipe-smoking Habsburg prince is perhaps the strongest pro-European voice in Prague, and hopes to run in the first direct presidential election next year. But he has said that the decision to grant Mr Tymoshenko asylum was made by the interior ministry alone.

It is not yet clear how much that choice was part of a coherent policy toward Ukraine, and how far it was the shunting ajar of an often tightly-shut door to a well connected figure.