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The "reset" malfunctions

As Clinton arrives in Moscow, Putin announces that Russia will start Iran’s reactor in June. A START treaty successor appears likely. Thousands hold “Day of Wrath” to protest Putin and declining living standards. China’s VP signs $1.6 billion in Russian deals. And a Moscow paper reports — erroneously — that Naomi Campbell is pregnant with an oligarch’s child.

 Top News: U.S. Secretary of State Hillary Clinton flew to Moscow this week for two days of talks on bilateral relations and a meeting of the Middle East Quartet. The trip opened on a sour note. Despite declarations by Clinton and Foreign Minister Sergei Lavrov that the U.S.-Russia relationship had been successfully reset, the two publicly clashed over Russia’s stance on Iran. Prime Minister Vladimir Putin chose the precise moment that Clinton arrived in Moscow to announce that Russia would start up Iran’s Bushehr reactor in June. Clinton called the move “premature.” 

Clinton later met with President Dmitry Medvedev and with Putin, who spent most of the meeting pressing Clinton with complaints about bilateral trade.

On a seemingly positive note, Clinton said Moscow and Washington were close to signing a new deal on bilateral nuclear arms reductions (a successor the START treaty), but provided no details. Nearly daily for the past five months, headlines in Russia have shouted that a new agreement is just around the corner.

Several thousand people in cities across Russia held a “Day of Wrath” on March 20 to protest decreased living standards and Putin’s policies. It was the largest show of discontent since Putin came to power, but still touched a small portion of the population. The biggest protest came in Kaliningrad, Russia’s Baltic exclave.

Medvedev announced the site for “Russia’s Silicon Valley,” a new government-sponsored initiative to boost investment in high-tech, innovative projects. The scheme is being led by Vladislav Surkov, the Kremlin’s chief ideologist and grey cardinal, who has, called for tight government control over the initiative. He repeated those thoughts this week.

Russia announced it was halting its program sending rich tourists into space, in order to free capacity for flights to the International Space Station. A Soyuz capsule carrying U.S. astronaut Jeff Williams and Russian Maxim Suraev landed safely this week.

Money: Official statistics saw a drop in unemployment last month, but that was accompanied by a host of other problems. Investment, retail sales and GDP continued to plunge, and some 200,000 people are still owed wage arrears, valuing $139.9 million.

State-owned oil giant Rosneft, which went from being the country’s eighth largest oil firm to its biggest by snapping up Yukos assets at fixed bankruptcy auctions, ran into trouble this week. A U.K. court froze £425 million of Rosneft money held in U.K. bank accounts, in order to force Rosneft to pay a loan, plus fines and interest, that the company took on when it bought assets that once belonged to Yukos, the oil firm bankrupted after the arrest of its CEO, Mikhail Khodorkovsky. Rosneft shares have slid on the news.

U.S. oil company ConocoPhillips has decided to reduce its stake in LUKoil, Russia’s largest private oil company. It is believed to be looking to dilute its stake from 20 to 10 percent. The Russian government has denied it is interested in taking part in the share buyback plan.

Xi Jingping, China’s vice president, is in Russia this week. He has already signed $1.6 billion worth of deals during a visit to the Far Eastern city of Vladivostok. He is due to fly to Moscow next, meeting with Putin and Medvedev, where a series of energy deals will be signed. The two sides are also expected to discuss Iran.

Elsewhere: For the next two weeks, Moscow will host the Golden Mask festival, showcasing the best in theatre and music.

Moscow hipsters are happy – Talib Kweli, the U.S. rapper, is playing Moscow March 28.

The Moscow News, a local newspaper, is reporting that Naomi Campbell, who has been dating Russian oligarch Vladislav Doronin for a couple years, is pregnant with his child. Not sure whether to believe it though – the woman in the photo accompanying the article is certainly black, but she is most certainly not Naomi Campbell. Not the greatest sign of thorough reporting.