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Krull Corp.’s Mirtchev discusses Russia-Ukraine supply dispute

As Russia and Ukraine continue to disagree over natural gas pricing and shipments to Europe, Russia’s growing influence in the region is becoming very apparent. How will the Russia-Ukraine natural gas partnership affect Europe’s foreign and energy policies? What does Russia’s growing influence in the energy sector mean for the United States? During today’s OnPoint, Alexander Mirtchev, founder and president of Krull Corp. and a top international consultant on energy and oil markets, discusses the details of the Russia-Ukraine natural gas partnership and explains why Europe will continue to face shipment disruptions. Mirtchev also discusses Russia’s expanding influence in the energy sector and how this will affect the foreign policy decisions of European nations and the United States

Monica Trauzzi: Welcome to the show. I’m Monica Trauzzi. With us today is Alexander Mirtchev, founder and president of the Krull Corporation and a top international consultant on energy and oil markets. Alexander also serves as the senior economic adviser to the prime minister of the Republic of Kazakhstan. Alexander, thanks for coming on the show.

Alexander Mirtchev: It’s my pleasure.

Monica Trauzzi: Earlier this week we heard that Ukraine and Russia had finally reached an agreement with their European nations on resuming the supply of natural gas from Russia to Europe. Russia claims that Ukraine has essentially shut off the pipelines that would allow this gas to go to Europe. What’s the latest on where this situation stands and when we actually might see these pipelines reopening and natural gas going to Europe? What’s the situation at this point?

Alexander Mirtchev: I believe, first and foremost, it’s fascinating to see how this issue has been seen from the point of view of different countries in the region and you will see how they project their own political interests on the situation making it much more complex than it is.

Interview with Alexander Mirtchev
You can view the whole transcript of this video with Alexander Mirtchev

Toward a New Magna Carta by Alexander Mirtchev and Norman Bailey

The world economy cannot count on growth to solve the global debt problem – and stimulus measures are not a sustainable solution. In the third installment in their series “The Search for a New Global Equilibrium,” Dr. Alexander Mirtchev and Dr. Norman Bailey argue the time is ripe for a “new Magna Carta” – a redefinition of the social contract among the government, Main Street and Wall Street.

As always, the ultimate hopes of addressing the issue of debt appear to be pinned on growth as a way out of the rising waters of debt. Rightfully so. And yet, in the current economic circumstances, growth seems more likely to come from a divine miracle than from mere mortals making the difficult choices that must be made.

In reality, the prospects of global economic growth in the context of prevailing indebtedness are faced, on one side, by the Scylla of austerity measures and the Charybdis of stimulus packages that invariably lead to higher states of indebtedness. Essentially, a damned-if-you-do, damned-if-you-don’t conundrum.

The threat posed by Scylla entails accommodating, on one side, the imperatives for sometimes draconian austerity measures, which could, however, have a dampening effect on growth by restricting demand.

In Portugal, the government has cut state pensions by up to 10%, cut public sector salaries by 5% and increased the value-added tax to 23%, one of the highest rates in the world. Subsequently, the government fell.

Similar measures are being taken in Spain, Ireland, Greece and elsewhere. Furthermore, the reactions to such measures should not be overlooked – witness the demonstrations that regularly take over the streets of Athens, Paris or Lisbon (and Madison, Wisconsin).

On the other side is Charybdis – the prospects for inducing growth via stimulus packages confronted by mounting debt that can lead to stagnation. When total debt in Japan rose beyond 90% of GDP, for example, the effect of adding further debt was to restrict growth. In other words, in the current situation, chasing growth to breach the surface of the ocean of debt does not break the vicious circle – it reinforces it.

We are unlikely to navigate safely between these two ancient monsters. There is no evidence that the prospects for a debt tsunami would dissipate in their own right. Now that Social Security payouts exceed income – more than $200 billion this year and trending towards $1 trillion within the decade, according to the 2009 Financial Report of the U.S. Government – entitlement programs in the United States are reaching the point of no return, adding significantly to the debt service burden each year.

Many developed and developing economies are also exposed to increasing demands on the state to finance a range of social commitments, from pensions to infrastructure-development financing. U.S. states such as California, New York, Florida, New Jersey, Ohio, Indiana and Wisconsin are tackling budget shortfalls of up to 30%, and cities such as Chicago are facing deficits of close to 10%.

In Europe, cities like Lisbon, with its 7.3% deficit, are urgently looking for ways to cut costs, while entire regions in Spain, Britain, Belgium and elsewhere are themselves insolvent, adding their buckets of water to the debt ocean.

The examples of the devastating effect of the debt burden range from the unsustainable premiums countries like Greece and Portugal must incur when raising funds, to the case of Iceland, where the whole country went bankrupt.

Read the full article by Alexander Mirtchev and Norman Bailey

FC – Novosti: Stanislav Tarasov about the Summit of the “twenty” and a comment from Alexander Mirtchev

MOSCOW, March 19. / “FC-Novosti” /. On the eve of the Summit of the “twenty” in London, many analysts are trying to determine a scenario in which events may occur at this forum. This task is difficult because until recently the leaders of major economies in the world, including Russia, have expressed different visions of the options out of the global crisis.
In the context of their statements are often brightly was seen not only economic but also political component. This, above all, was the position of the United States and other countries of the “Big Seven”, as well as countries with economies in transition such as Russia, Brazil and China. There was a problem scenarios and proposals that identified different priorities in the footsteps of the crisis.
On the eve of the London meeting of heads of financial institutions of “twenty” the U.S. made a proposal to follow their example and use to stimulate their economies, fiscal measures amounting to not less than 2 percent of GDP. This position, which provides a selection of major new facilities to boost national economies, openly supported the London and China.
Made against the European Union. European Commission President Jose Manuel Barroso said the EU should avoid “artificial” choice between fiscal incentives and a higher degree of control over the financial markets. France and Germany insisted on the need to first stabilize global financial markets, including through the establishment of its new architecture, and then only to stimulate economic growth. The term “new architecture” refers to the modernization of the existing from the time of World War II international financial institutions.
As for the position of Russia, judging by the statements of senior officials, they are more words joined to crisis developments the EU, although in practice the implementation of anti-crisis measures – the use of the Stabilization Fund and strengthening the regulatory role of the state – often operated by American standards. A final clarification on this issue and has not appeared after a summit of finance ministers of “twenty” in London. However, it seems, the moment of truth.
On the Kremlin Web site put up “anti-crisis plan” that will be offered to Russia at the summit of the “twenty” in London. Moscow has offered, in particular, to radically reform the International Monetary Fund, reallocating quotas and voice in it in favor of emerging markets. In her opinion, the proposed architecture is an international financial relations should be based on the principles of democracy and equal responsibility for decision making, transparency of operations of all participants and the fair distribution of risks.
“We believe that the new system should be based on dialogue and partnership for mutual responsibility and interdependence of nations – said in this regard, presidential aide Arkady Dvorkovich. – And by the way, even after changing the management structure of the IMF, the U.S. share of this direction is reduced. The main thing is the readiness of our partners to accept their mutual responsibility with us. ”
Partners do not have to wait. They welcomed the proposal of Moscow. Not accidentally, almost simultaneously with the appearance of the proposals made by the head of the Moscow Bank of England Governor Mervyn King. He stated that the April G20 summit in London provides an opportunity to give impetus “to the process of decision-making on long-term reforms in areas such as banking regulation, reforming the monetary system and the management of international financial institutions.”

By and large, it is about creating the basic structure of the “new capitalism”. While clearly only one thing out of the crisis must be sought together. The economy and financial systems of developed and developing countries were so intertwined that the anti-crisis measures “of the national character of the local” lead only to a standstill and further aggravate the situation. There comes a time for a new type of coordination on the part of developed and developing economies. Only then may receive the light at the end of the tunnel.
Stanislav Tarasov about Alexander Mirtchev, especially for “FK-Novosti.”
Read the full story here. Alexander Mirtchev

Alexander Mirtchev – Expert on the situation in the Russian banking system

The Russian government will not be easy work, to call to order the Russian banks. Banks eagerly accepted by the Government allocated aid, but the government is not happy the way banks use it. Russian prosecutors have already issued a warning to 70 Russian banks that have used these funds intended to stimulate lending for the purchase of foreign currency, undermining the Russian ruble.

Our correspondent Ellen Pinchuk asked Alexander Mirchev, founder of the company KRULL Corp, Which helps elite clients, private companies and sovereign nations cope with economic, social and structural constraints, assess the situation in the Russian banking system.

Alexander Mirchev: I do not see anything wrong. On the one hand, banks have tried to find a financial solution to their difficulties, but on the other – we should not forget that all this happens in a context of deep global economic crisis, to which each country tries to cope by local measures. The crisis will remain with us for a long time, so that measures are taken now in Russia to combat the crisis, more or less adequate to the task. But to address the global problems need global solutions. Otherwise, there will be new regional alliances, which will take protectionist measures, fragmenting the world economy and hinder the solution of its problems.

Pinchuk: Debt of Russian companies to foreign creditors more than $ 400 billion and it will pay over the next four years. Is this not cause for alarm?

Alexander Mirchev: This is not just Russia. International banks offered to Russian companies to negotiate a debt restructuring and presented a very impressive restructuring plan. To be significant restructuring of debts of Russian companies. This process will take place in all emerging economies, Russia is no exception. It will focus on reliability and quality of assets, not its liquidity.

Dr. Alexander Mirtchev is the founder and president of Krull Corp., USA, a global strategic solutions provider, with a focus on global economic security, new economic trends and emerging policy challenges.

Article source Alexander Mirtchev on Voice of Russia
Read more from Alexander Mirtchev

Dr. Alexander Mirtchev Warns Against the Mid and Long-Term Repercussions of Unbalanced and Even Mindless State

Alexander Mirtchev, Washington-based economic strategist and expert,
reviewed the actions of governments in the emerging markets in support of
the beleaguered financial sector and their potential effects with
Mergermarket, the partner publication of the Financial Times.

Dr. Mirtchev explained that governments had little choice in taking urgent
measures to the financial crisis. “With the crisis looming, it was not
possible to stick to ideological positions or specific doctrines — you do
not consider the price of the carpet you are using to put out the fire in
your house,” said Mirtchev. However, he believes that it is high time to
look beyond the immediate short-term pressures, and devise a broader
policy response that would address the long-term needs to encourage
productivity, competitiveness and growth. He is of the view that, when
devising such strategies, governments have to take into account the truly
global nature of today’s financial system. “The world financial system
has evolved to the point where no economy functions as a closed circuit.
Economic interaction in a specific market cannot be considered a zero-sum
game.” In the case of emerging markets such as India, China, Mexico,
Indonesia and others, “participation and integration in the global
financial system makes sense,” in particular with a view to the
productivity and growth-generating role that these markets have in the
world economy.

He considers that in the short-term direct government support and
recapitalization can help banks and institutions continue their function
as the mechanism that pumps capital throughout the global economy, and it
seems already unavoidable. However, the key is, at the end of the day, to
face the reality of the newly emerging global financial system of the XXI
century, not to try and “put the genie back in the bottle” by returning to
the model of the 1990s, and jumpstart the new, inclusive financial order
that could accelerate the recovery and sustain growth.

Dr. Alexander Mirtchev is President of Krull Corp., a Washington-based consultancy and serves as senior economic adviser to the country’s Prime Minister. Follow Alexander Mirtchev on Twitter