Post Ukraine Gazprom moves against three more nations
Moscow: Russia's moves to strengthen its grip over gas supplies to Europe took another turn yesterday with its State backed oil and gas entity, Gazprom, moving to increase sharply the cost of gas sold to neighbouring countries such as Bulgaria, Moldova and Turkey.

Energy officials in Sofia accused Gazprom of seeking to treble the cost of gas supplied to Bulgaria, even as Bulgaria's Energy Minister, rejected as "unacceptable" Gazprom's demand that a barter system under which it supplies gas to Bulgaria in lieu of pipeline transit fees be scrapped. It now appears that Gazprom wants to pay cash for transit to third countries, including Greece and Turkey, while Bulgaria would pay market rates, effectively raising the gas price from US$87 per 1,000 cubic metres to US$257.

Having just resolved a dispute with Ukraine, Russia continued withholding gas supply to Moldova for the sixth day yesterday as talks continued over a new supply agreement in which Gazprom is seeking a doubling of the price. Turkey, meanwhile has entered the fray saying that it might seek international arbitration in a dispute with Gazprom. Botas, the Turkish gas utility, complained that its current price of US$273 per 1,000 cubic metres is too high.

Meanwhile, confidential terms of this week's Ukrainian deal, leaked to the media reveal that the new gas price of US$95 per 1,000 cubic metres is valid only for six months. This effectively exposes Ukraine to the risk of a second round of price increases before the end of the year. The contract also gives RosUkrEnergo, a Gazprom controlled entity, a pivotal role in marketing gas in the Ukraine.

Analysts now feel that with this week's deal Gazprom has secured two objectives: raising gas prices and more control over the Ukrainian market. Most of the gas supplied under the new Ukraine contract will be sourced from Turkmenistan, which in turn is keen to secure a higher price from Gazprom, its sole buyer.
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Corporate bankruptcies in UK up 11 per cent
London: Corporate insolvency in the UK jumped by 11 per cent in 2005, according to a British financial data firm Experian. There were 18,122 corporate bankruptcies, the highest number since 2002, and Experian expects the figure will increase further in 2006.

The sectors hardest hit were non-food retail, up 40 per cent, business services, up 12 per cent, and media, up 15 per cent.
Experian gets its figures by analyzing the adverse notices received from Companies House that indicate that a company has little or no chance of recovering to a normal status in the future." The financial landscape for UK companies had already begun to change by the start of 2005 as rising interest rates, the consumer slowdown and increased red tape all took their toll," said Richard Lloyd, managing director of Experian's Business Information division.
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US adds two million new jobs in 2005 — Bush says economy is healthy
Washington: Even as the Labour Department released figures saying that the United States had generated about 200,000 new jobs a month in the last part of 2005, President Bush immediately went on the offensive to promote his economic record and agenda of tax cuts, tighter limits on government spending and more trade.

The nation added 108,000 jobs in December as the unemployment rate edged down to 4.9 percent, the Labor Department said Friday. The job creation in December was much lower than most forecasters had expected, but the Labor Department also said the nation added far more jobs in November, 305,000, than it had estimated last month.

Over all, the nation added about two million jobs in 2005, about the same as in 2004.

Bush and top officials from the administration are now tramping across the country celebrating what they see as a success. The news comes as some relief amidst mounting bad news about the war in Iraq, criminal investigations into prominent Republicans and a sense amongst people that the economy is not as good as the numbers project it to be.

Meanwhile, Bush is now demanding that Congress extend his major tax cuts on wages and on dividends, capital gains and estate taxes, saying, "By cutting taxes on income, we helped create jobs." He said that the Congress must now make the tax cuts permanent.

In 2005, the economy expanded by about 3.6 per cent in 2005, the fourth consecutive year of solid growth, despite the soaring energy prices and the destruction caused by Hurricane Katrina. Consumer prices climbed at a rate of 3.5 per cent for the 12 months ended in November, but only about 2 per cent after excluding the volatile sectors of food and energy.

Analysts meanwhile are contesting if tax cuts had anything to do with the upswing in the economy. They point out the housing boom as driving consumer spending, which they say had very little to do with tax cuts. A falling dollar also helped drive up exports.
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