With nationalization due to the corona crisis

Berlin Russia is fighting the corona crisis in a different way than other countries: While subsidies and financial aid for mask manufacturers are planned in Germany and other EU countries, Moscow has simply nationalized the largest protective mask manufacturer. The city of Moscow has just taken over the largest manufacturer of medical protective masks. According to the city, the goal of nationalization is to be able to procure and distribute sufficient masks at cost price.

For a long time, Russian President Vladimir Putin denied the danger of corona to his country, and then overnight sent the whole people into paid free time for weeks, demanding that they stay at home. With over 252,000 infections, the giant empire is now the country most affected by the coronavirus after the United States.

However, Putin has now lifted compulsory vacation payable by companies, although the number of infected people continues to rise dramatically. Now, however, the regions and no longer the Kremlin should curb the pandemic centrally.

Part of the strategy to combat the virus is to wear full face masks. In Moscow, there is a mask requirement in public transport, in shops and in all places where several people meet. This turned the city into an entrepreneur: “When we realized that the city would need a considerable amount of medical masks and that we would be faced with a lack of masks in the market, we acquired a production facility”, Vice Mayor Vladimir Efimov declared the nationalization .

According to the city, the manufacturing price for masks has increased sevenfold: from just over one euro cent before the pandemic broke out to almost eight euro cents. The reason is that the cost of the raw material has risen just as much.

As buyers drove prices higher and higher, the most important manufacturer has now been brought into state hands, says Jefimow. KIT has so far produced one million masks, but should soon reach two to three million. Four million masks were sold every day in the Russian capital.

In Russia, nationalizations keep disguising themselves

The company KIT – Society for Innovative Technologies – produces a third of all these textile consumer goods in Russia. Experts estimate the value of the nationalized company at 1.5 billion rubles, the equivalent of almost 20 million euros.

Typically Russian: According to a report by the Moscow business newspaper “Vedomosti”, two largely unknown funds were interposed when acquiring KIT. In the end, the company ended up with the city equity investment company. There is silence about the purchase price.

Nationalizations in Russia have repeatedly resulted in disguises. The best-known case is probably the expropriation of the Yukos oil company by the oligarch Mikhail Khodorkovsky, who had previously been massively attacked by Russian President Vladimir Putin.

In 2004, the country’s largest oil producer at the time was auctioned off to the Baikal finance group, which had been founded and then dissolved only a few days earlier, and then ended up three days later with the state-controlled oil company Rosneft.

Massive corruption has repeatedly occurred in state takeovers.

More: At first Russia had frozen its economy, now the requirements are gradually being relaxed. But the risk of infection remains high.


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