Nadezhda Tolokonnikova and Maria Alyokhina, members of Pussy Riot, have been detained in Sochi. Photo: Getty
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Two members of Pussy Riot arrested in Sochi

Nadia Tolokonnikova and Masha Alyokhina, who were released from prison less than two months ago, say they were arrested in Sochi with a group of activists and journalists.

This article first appeared on newrepublic.com

Pussy Riot was arrested in Sochi today. 

Yes, you read that right. Pussy Riot members and internationally known “prisoners of conscience” Nadia Tolokonnikova and Masha Alyokhina, who were released from prison less than two months ago, were just arrested in Sochi.

Tolokonnikova claims they were just strolling through town (with a group of activists and journalists), the police claim there was a theft at the hotel where they were staying. 

Pussy Riot had come down to Sochi to do a performance piece called “Putin Will Teach You How to Love the Motherland.” “The police didn’t know how to neutralize them, so they made up a theft in the hotel,” a local lawyer told me as he drove to the station to which the Pussy Rioters were being driven.

But Tolokonnikova and Alyokhina are not your average hotel thieves. After their August 2012 show trial, these girls are media experts, live tweeting their arrest. 

Маша Алехина, я и еще одна участница Pussy Riot едем в отдел полиции Блиново за нахождение в Сочи. pic.twitter.com/bj8qpX7gMN

— Надя Толокно (@tolokno) February 18, 2014

(“Masha Alyokhina, another member of Pussy Riot and I are being taken to the Blinovo [police] station for being in Sochi.”)

Такой олимпийский Сочи. Едем в АДЛЕРОВСКОЕ ОТДЕЛЕНИЕ. pic.twitter.com/PoafsAGTZO

— Надя Толокно (@tolokno) February 18, 2014

(“This is Olympic Sochi. Going to the ADLER STATION.”) 

При задержании применяли силу.

— Надя Толокно (@tolokno) February 18, 2014

(“They used force while arresting us.”)

 
 

Pyotr Verzilov, Nadia’s husband and the group’s informal manager, tweeted out their local lawyer’s number. Then he tweeted out the address of the police precinct to which the Pussy Rioters were being taken, adding, “See you at the station, journalist friends!”

Nadia tweeted out her cell phone number and even picked up the phone and talked, allowing this reporter to hear Alyokhina yelling at someone in the background.

Something tells me that heads are going to get bopped at the local police station. The local cops probably got the tip that Pussy Riot was in town and were told to make the problem go away. Panicking about messing up Putin’s Sochi party, they made the situation far worse, given the group’s brand recognition in the West and the number of foreign journalists swarming the place and bored of covering ski jumps.

What’s arguably even stupider is that they did the thing the Russian is state is great at doing: they remade heroes out of Pussy Riot, just as Nadia and Masha were busy mucking up their own image, going on junkets to authoritarian countries and shamelessly asking for money around the world. 

“How stupid do you have to be to arrest Pussy Riot in Sochi during the Olympics?” opposition leader Alexei Navalny tweeted. “There is no Ketchum in the world that can help you on this one.”

This article first appeared on newrepublic.com. New Republic Senior Editor Julia Ioffe will be writing dispatches from Russia for the duration of the Olympics. For the entire collection of her pieces, click here.

Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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