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Russia refuses to lift Georgia ban

Published: 12:11PM Wednesday October 04, 2006 Source: Reuters

Russia has rejected US and EU calls to lift economic sanctions on Georgia, saying it had cut transport links to curb a dangerous military build-up by its pro-Western neighbour.

In unusually strident remarks, Russian Foreign Minister Sergei Lavrov lashed out at the United States. US support for Georgia had "stimulated" Tbilisi into taking unfriendly steps against Russia, he said.

Russia cut rail, air and postal links with the former Soviet republic in response to the arrest of four Russian soldiers on spying charges. Tbilisi released the four on Monday in what it termed a goodwill gesture.

But Moscow made clear the spying row was just part of what it sees as a deeper dispute with Georgia, which has irked Moscow by aggressively pursuing membership of Nato and the European Union and pulling out of Russia's orbit.

Asked at a Moscow news conference if the sanctions might soon be lifted, Lavrov said: "Not for the time being."

Lavrov said Georgia was channelling funds from organised crime in Russia into a slush fund to buy weapons in a massive military build-up directed at the Georgian breakaway regions of South Ossetia and Abkhazia, both backed by Moscow.

"Millions of dollars are passing from Russia to Georgia at a time when Georgia is engaged in a huge military build-up," he said. "We can only draw one conclusion: they are preparing very actively to solve militarily the conflicts on their territory."

Georgian President Mikhail Saakashvili has vowed to restore central control over the breakaway regions but Tbilisi has ruled out military action against them.

Georgia says it is boosting military spending to reverse years of neglect and bring its forces up to Nato standards.

Lavrov spoke to foreign journalists amid growing Western unease over Moscow's decision to go ahead with the sanctions even after Tbilisi released the Russian soldiers.

"We do hope that Russia very, very soon lifts these sanctions because sanctions do not, particularly in this case, lead anywhere," EU External Relations Commissioner Benita Ferrero-Waldner told Reuters in an interview in Tbilisi.

In Washington, US State Department spokesman Tom Casey urged Russia to drop its blockade against Georgia and appealed to Moscow to work with Tbilisi "in a positive spirit".

In a new sign of the tensions, Georgia urged Russia to stop nearby naval exercises, calling them a threat to regional peace and a violation of the United Nations charter.

Russia's state-run gas monopoly Gazprom promised to maintain supplies of gas to Georgia. But flights and trains from Moscow to Tbilisi were cancelled as the transport ban began to bite.

Georgian Economic Development Minister Irakly Chogovadze told Reuters the sanctions would hit the economy but added: "We will survive."

Ratings agency Standard and Poor's, which gave Georgia's debt an initial long-term sovereign credit rating of B+ in December, said the deteriorating relations with Russia might threaten the positive outlook on its credit ratings.

Georgians were alarmed by moves in Russia's parliament to give ministers the power to halt money transfers to Georgia.

Almost a sixth of Georgia's national income comes from cash sent home by relatives working in Russia, who number about one million, according to central bank estimates.

"I am very concerned - me and my family depend on the money that comes from Russia," said Georgi, 35, who was receiving a $200 wire transfer from his parents in the Russian city of Rostov-on-Don at a bank branch in central Tbilisi.

But it was unclear how the Russian measure would be enforced, or if it would materialise at all.

Georgian officials said if a ban was imposed, money transfers could be re-routed through third countries.

Russia's parliament had said initially the measure would be put to a vote on Wednesday. But the deputy in charge of drafting the proposal said on Tuesday it was being examined by legal experts and he could not give a date for a vote.

At his news conference, Lavrov noted Georgia arrested the Russian soldiers soon after Saakashvili visited Washington.

"I am not saying it was done on orders from somebody outside Georgia. But it certainly stimulated Georgia to act as it did."

Lavrov also questioned whether Saakashvili - swept to power in a 2003 "Rose Revolution" - was a legitimate president.

Officials close to Saakashvili believe the Kremlin's ultimate goal is "regime change" in Georgia. Russia denies this.