Wall Street Journal số ra ngày 28/2/2014

VOL. XXXII NO. 21

FRIDAY - SUNDAY, FEBRUARY 28 - MARCH 2, 2014

Who’s YourMoney On?

PLUS: Will Lyons on releasing the potential ofBarolo

DJIA 16272.71 À 0.46% Nasdaq 4318.93 À 0.63% Stoxx Eur 600 337.21 g 0.15% FTSE 100 6810.27 À 0.16% DAX 9588.33 g 0.76% CAC 40 4396.39 g 0.01% Euro 1.3718 À 0.36% Pound 1.6688 À 0.24%

EUROPE EDITION

WSJ.com

Missing in Barcelona:

Genuine Innovation

BARCELONA—The hottest

showcase for new technology

at this year’s Mobile World

Congress wasn’t

in the event’s

cavernous exhi￾bition halls. It was actually

about3kilometers away, at

an affiliated show for startups

and venture capitalists.

In a makeshift array of

stages, geodesic tents and

seats made from beer crates,

organizers of the spinoff gath￾ering titled Four Years From

Now, or 4YFN, played host to

an array of mobile-related

startups with products like

GPS for motorcycle helmets,

and an application for Google

Inc.’s computer-enabled

glasses that lets users buy

things with a nod of the head.

“This is where the real in￾novation happens,” said

Christopher Pommerening,

co-founder of venture-capital

firm Active Venture Partners,

as a rock band blared on a

nearby stage. “Over there, in￾novation means having a

phone that is a millimeter

smaller than last year’s.”

Innovation has been hard

to come by in Barcelona this

year. At over one million

square feet, Mobile World

Congress is the mobile indus￾try’s biggest yearly confer￾ence. But this year’s show of￾fered another cascade of

glass-slab devices that varied

in size and, maybe, color.

That stagnation reflects a

broader shift in the mobile

business, as the smartphone

revolution nears the end of its

Please turn to page 16

Gold Bulls Come Back

After Last Year’s Rout

Investors are buying gold

again.

Gold is up 11% this year,

and wagers on rising prices

are atafour-month high in

the futures market. In Febru￾ary, investors were net buyers

of SPDR Gold Shares, the

biggest exchange-traded fund

that buys gold, for the first

time since December 2012.

Gold has a long way to go

to recover from last year’s

rout, the metal’s worst annual

performance in more than

three decades. Gold futures

ended Thursday at $1,331.60 a

troy ounce on the Comex divi￾sion of the New York Mercan￾tile Exchange, up slightly for

the day but down 16% from a

year ago.

Some money managers are

betting that the market hit

bottom at the end of 2013.

Risky assets that drew cash

away from gold last year, in￾cluding emerging-market

stocks and bonds, are looking

less appealing. Gold is also re￾gaining its role as a hedge

against inflation as some in￾vestors question the U.S. Fed￾eral Reserve’s commitment to

ending its economic stimulus.

“A reset needed to happen

in gold,” said Michael Tide￾mann, who manages $8.5 bil￾lion for 130 clients at Tide￾mann Wealth Management

in New York.

Like many investors, Mr.

Tidemann sold gold in Decem￾ber to lock in losses for tax

purposes. However, he started

buying shares of SPDR Gold

Shares in January and is rec￾ommending that new clients

hold gold. He said he sees

gold as a store of value should

the Fed’s stimulus policies

trigger higher inflation or a

weaker dollar.

SPDR Gold Shares, known

by its ticker symbol GLD, has

added 10.54 metric tons to its

gold holdings for February

through Wednesday, boosting

its total to 803.7 tons. Still,

the month’s increase is

dwarfed by last year’s decline

of 552.6 tons.

Investors have had plenty

of reason to buy gold in the

past few months. Doubts

Please turn to page 19

BY TATYANA SHUMSKY

AND IRA IOSEBASHVILI

BY SAM SCHECHNER

 Opinion: A somber wariness

in Ukraine..................................... 13

A new generation of

Italian designers teased

up their looks to bring

a sexy spirit back to

the runways

Personal Journal....25

Cypriot President Nicos

Anastasiades sees an

end to capital controls

by the end of this

year

Interview................. 5

Inside

Ukraine Roiled by Challenges From East

Yanukovych Says

He Is Still There;

Unrest in Crimea

Dozens of armed men took

over two government build￾ings in a restive, pro-Russia

region of Ukraine and the

ousted president broke his

nearly weeklong silence, de￾claring himself still to be the

country’s legitimate leader.

Both developments posed seri￾ous challenges to the provi￾sional government as it tries

to consolidate control.

In a statement provided to

Russian news agencies Thurs￾day, deposed President Viktor

Yanukovych said that the vote

in parliament last week to

strip him of his powers was il￾legal and that he remained

president.

Arseniy Yatsenyuk, who

was confirmed as prime minis￾ter in parliament Thursday,

countered that Mr. Yanuk￾ovych is “no longer president,

but a wanted man suspected

of mass murder and crimes

against humanity,” the Russian

news agency Interfax reported.

Mr. Yanukovych also asked

Russia to ensure his personal

safety “against the actions of

extremists.” Russia responded

by agreeing to provide secu￾rity to Mr. Yanukovych within

Russian territory, Russian

state news agencies reported,

citing unidentified govern￾ment officials.

Mr. Yanukovych hasn’t

been seen publicly since Satur￾day Feb. 22, when he was

driven from office following a

week of bloodshed in Kiev that

left more than 80 dead.

Russia had been muted in

its support of Mr. Yanukovych

since then, although officials

have argued that the govern￾ment taking form in Kiev

gained power illegally.

Russian President Vladimir

Putin, who had backed Mr.

Please turn to page 4

By Lukas I. Alpert

in Moscow and Paul

Sonne in Simferopol,

Ukraine

Supporters of Russia rally outside the regional parliament Thursday in the Crimean capital, where armed men occupied two buildings.

Reuters

$1.75 (C/V) - KES 250 - NAI 375 - £1.70

KievIs Looking

InAll Directions

For FinancialAid

Ukraine’s new government

on Thursday set in motion re￾quests for international finan￾cial assistance as it attempts

to cement its standing follow￾ing the removal of the coun￾try’s president last weekend.

The move comes amid

growing pressure on the

Ukrainian government’s fi￾nances, with the currency fall￾ing sharply in recent days and

foreign-exchange reserves de￾clining.

Ukraine hopes to secure a

bailout from the International

Monetary Fund, Russia and

other countries willing to of￾fer aid. Ukraine’s newly ap￾pointed finance minister Olek￾sandr Shlapak said Thursday

that the government will seek

at least $15 billion in aid from

the IMF.

The IMF separately said it

Please turn to page 4

By Andrey Ostroukh

in Moscow, Ian Talley

in Washington and

Laurence Norman in

Brussels

ANALYSIS

28| Friday-Sunday, February 28-March 2, 2014 THE WALL STREET JOURNAL.

HEARD ON THE STREET

Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

For Baidu,

Growth in

Profit Is

Elusive

China’s online-search be￾hemoth Baidu is doing what

it must to stay competitive.

But in a theme Chinese Inter￾net investors should get used

to, profit growth isn’t going

to be as bubbly as hoped.

That was the company’s

message to investors Thurs￾day. Fourth-quarter revenue

surged by 50% from a year

earlier while profits were flat,

as expected. But in a confer￾ence call with analysts, Baidu

Chief Financial Officer Jenni￾fer Li dropped a bombshell,

saying the company doesn’t

expect any increase in profit

this year as it continues to in￾vest. Pity the analysts, who

according to FactSet had opti￾mistically forecast a 31% rise

in 2014 net profit. Now they

are asking where the money

will be spent.

The answer is on more of

the same. The company has

been spending heavily to mi￾grate its desktop search ad￾vertising prowess to mobile,

such as by paying phone mak￾ers to preinstall its search

app. Baidu also plunked down

$1.9 billion to acquire 91

Wireless, a mobile-application

store. The good news is that

Baidu’s toehold in the crucial

mobile space is growing. Mo￾bile services accounted for

20% of total revenue in the

fourth quarter, compared with

10% just two quarters ago.

Baidu has little choice but

to invest in mobile or risk be￾coming a desktop dinosaur.

The hope had been that last

year’s investment would start

yielding profits this year. But

the investment treadmill con￾tinues.

Baidu hasaleading map

application, but faces rising

competition from AutoNavi,

part-owned by e-commerce

giant Alibaba Group, which is

now seeking full control.

Games and messaging colos￾sus Tencent last year muscled

in on Baidu’s core business by

buying a stake in upstart

search engine Sogou.

Investors are pricing high

profit growth into shares, but

competitive pressures could

squeeze margins across the

sector as everyone is forced

into defensive investments.

Sina told investors this week

it also plans to step up spend￾ing on its portal business and

its Weibo microblog. The

stock fell 9% the following

day. Baidu’s relatively modest

ratio of 26 times next year’s

earnings jumps to 35 times on

the company’s latest guid￾ance.

On the Chinese Internet,

the profits needed to sustain

such high valuations remain

elusive. —Aaron Back

No End for RBS’s Trouble

“Try again. Fail again. Fail

better.” Playwright Samuel

Beckett’s words might as well

be Royal Bank of Scotland’s

mission statement.

Certainly, RBS restructur￾ing plans have joined death

and taxes among life’s inevita￾bilities. The 81% state-owned

U.K. bank’s latest reorganiza￾tion follows a monumental £9

billion ($15 billion) net loss

last year. Whether new Chief

Executive Ross McEwan’s re￾vamp will work is anyone’s

guess, though investors are

skeptical—the bank’s shares

slumped another 9.3% on

Thursday.

The new business plan in￾volves shrinking RBS’s seven

business lines into three, with

medium-term cost-cut targets

totaling £8 billion. Head-count

reductions haven’t been de￾tailed, though previously an￾nounced spinoffs of RBS’s U.S.

bank Citizens Financial

Group and its Williams &

Glynn retail branch network

in the U.K. will take more

than 20,000 people off the

payroll, around a sixth of the

current total. Even so, RBS

may not achieveareturn on

tangible equity of 12% until

2020—a forecast too distant

to carry real meaning.

Mr. McEwan has at least

grasped the nettle of RBS’s

problematic investment bank.

Its risk-weighted assets will

be cut by £50 billion, a reduc￾tion of almost 40%. This

shrinkage—in line with the

government’s wishes—at least

gives RBS more strategic clar￾ity. But it may hinder its

growth back to a size that will

allow the U.K. government to

make good on the £45 billion

it plowed into the bank dur￾ing the global financial crisis.

Godot may yet arrive before

RBS returns fully to the pri￾vate sector.

RBS’s results, moreover,

capadismal reporting season

for Europe’s major banks. Five

years on from Lehman’s col￾lapse, none of them—includ￾ing Barclays, HSBC, Credit

Suisse, UBS, BNP Paribas

and Deutsche Bank—are

making a return on equity

above 10%. Sure, balance

sheets have been strength￾ened, but major banks’ core

Tier 1 equity hovers just

above 10% of their risk￾weighted assets at best. RBS’s

stands at 8.6%. The drip-drip

of scandal persists, with

probes into foreign-exchange

trading and Credit Suisse’s al￾leged tax-evasion schemes the

latest examples.

Against this background,

calls from the likes of UBS

Chief Executive Sergio Er￾motti to end bank bashing

sound ludicrous. The industry

has already moaned endlessly

about capital rules that will

still allow banks to borrow 33

times their equity. And in￾stead of taking the European

Union’s admittedly clumsy at￾tempts to cap bonuses as a

signal to show some pay re￾straint finally, bank executives

have spent the past few

months finding ways around

the new rules. Despite its loss,

RBS will pay out over £500

million in bonuses for 2013.

European banks’ shares

may have risen 19% in the

past 12 months. But an eve￾ning of Beckettian existential

angst is more likely to be a

pleasurable experience than

following their fortunes.

—Andrew Peaple

Europe Bond Juggernaut Rolls On

How low can you go?

Where other markets have

faltered so far this year, the

euro-zone government-bond

market has just kept on rally￾ing. Yields have fallen across

the board, with the sharpest

gains in southern Europe. Lit￾tle seems able to upset the

trend.

Italian and Spanish 10-year

yields have both fallen by

more than 0.6 percentage

point this year, to just under

3.5%, and are now at levels

unseen since early 2006. In

Portugal, the rally has been

even sharper: 10-year yields

have fallen more than a per￾centage point and five-year

yields by about two points.

That is generating strong re￾turns. Italian bonds are up

3.5% in the year to date, ac￾cording to Barclays indexes,

while Spain is up 4% and Por￾tugal 7.7%.

Importantly, the investor

base for euro-zone govern￾ment bonds is deepening. At

the peak of the euro-zone cri￾sis, domestic banks took the

strain and massively in￾creased their home-sovereign

bondholdings. But while Ital￾ian banks marginally reduced

their holdings of Italian gov￾ernment bonds in January, ac￾cording to European Central

Bank data, yields still fell

sharply, indicating interest

from other buyers.

Spanish banks did add

€18.1 billion ($24.77 billion) of

domestic government bonds,

but holdings are still well be￾low their 2013 peak. Encour￾agingly, French banks, which

dumped non-French govern￾ment bonds as the crisis

ramped up in 2011, added

€14.6 billion of non-French

bonds in January. Greater

cross-border flows would be a

sign of healing in Europe’s

bond markets.

So far, bond investors

don’t seem worried about low

inflation, which stands at just

0.8% in the euro zone. Low in￾flation or deflation would

normally be a bond investors’

friend—but it makes the pro￾cess of economic adjustment

harder, and may yet lead to

concerns re-emerging about

the sustainability of some Eu￾ropean governments’ debt

loads. The ultralow inflation

levels in Southern Europe also

mean that governments still

are paying relatively high real

debt yields.

But the broadening of in￾vestor demand, along with

Europe’s gradual recovery,

means that euro-zone govern￾ment bonds could yet offer

further gains. In Italy, there is

hope that new Prime Minister

Matteo Renzi will succeed in

introducing overhauls. In

Spain and Portugal, there are

signs that structural change is

paying dividends in growth.

Credit ratings have started to

move higher again after sev￾eral years of steep down￾grades.

Ultimately, euro-zone bond

investors are sheltered from

the debate about monetary

policy tightening that is under

way elsewhere.

Those hoping for radical

easing from the ECB may yet

be disappointed, as none of

the central bank’s options

come without drawbacks. But

investors can be sure the ECB

won’t be tightening policy for

a long time yet.

—Richard Barley

Falling Fast

Yield on 10-year government

bond, monthly data

The Wall Street Journal

Source: FactSet

7

2

3

4

5

6

%

’04 ’06 ’08 ’10 ’12 ’14

Italy

Spain

Ultralow interest rates

and a rush of money into

bond markets seeking re￾turns: times should be good

for high-yield borrowers. In￾deed, they are. Maybe they

areabit too good.

So far this year, defaults

among high-yield corporate

borrowers are noticeable by

their almost total absence.

In the U.S., there were no

defaults until Feb. 18, when

MModal Inc., a provider of

clinical documentation prod￾ucts, missed an interest pay￾ment, according to Standard

& Poor’s. S&P says it has

been 30 years since the first

U.S. corporate default arrived

so late in the year.

Globally, there have been

just three defaults year to

date, versus 13 in the same

period of 2013, the ratings

firm says. And 2013 was a

good year, too: S&P says the

global speculative-grade cor￾porate default rate was 2.3%.

That is music to the ears

of junk-bond investors, of

course. But it also might

raise some concerns among

policy makers that loose

monetary policy is storing

up trouble for the future.

OVERHEARD

Qantas Facing

Stormy Weather

More needs to be done to

get Qantas Airways out of its

tailspin.

Australia’s biggest airline

announced Thursday that it

will cut 5,000 jobs, delay or￾ders for 11 jumbo jets and sell

airport leases after swinging

to a first-half net loss of 235

million Australian dollars

(US$211 million). Still, Qantas

shares fell 9% as investors

worried more was needed to

combat intense competition

from rival Virgin Australia.

Qantas had Australia

mostly to itself after its sole

major competitor closed shop

in 2001. Then came Virgin,

which launched a fierce price

war in 2010. Qantas shares

have lost more than half their

value since then, while Virgin

Australia has amassed a third

of Australia’s flying market.

Qantas remains at a disadvan￾tage as unit costs, excluding

fuel, were about 15% higher

than Virgin’s last financial

year, according to Macquarie.

Virgin smells blood and

isn’t likely to back off. Though

its own shares have been bat￾tered by the price war, they

trade at well above net tangi￾ble assets. Qantas trades at

less than half that measure.

Virgin has the financial sup￾port of shareholders Air New

Zealand, Singapore Airlines,

Etihad Airways and Richard

Branson’s Virgin Group, who

together own 70% of the car￾rier. They have a long-term

strategic interest in carving

outastrong position in Aus￾tralia and destabilizing Qan￾tas.

Qantas’s predicament

raises the question of whether

Australia can support two ma￾jor airlines. That puts Austra￾lia’s government under pres￾sure to step in to maintain

competition. Qantas has re￾quested state debt guaran￾tees.Amore realistic option

might be lifting a 49% govern￾ment-imposed cap on foreign

ownership of the carrier.

More drastic measures

may be in the offing.Aspinoff

of Qantas’s Asia regional bud￾get carrier Jetstar would free

up capital and management

attention. Macquarie esti￾matesaspinoff could raise

about A$400 million. J.P.

Morgan estimates selling a

49% stake in Qantas’s fre￾quent-flier program could

raise up to A$1.6 billion, but it

is one of Qantas’s more profit￾able units.

The clock is ticking for

Qantas to figure things out.

While it does have A$2.4 bil￾lion of cash and A$630 mil￾lion in standby bank facilities,

losses are mounting. Its fate

seems increasingly tied to

whether Australia’s govern￾ment wantsatwo-carrier

country. —Rebecca Thurlow

The broadening of investor demand and

Europe’s gradual recovery mean euro-zone

government bonds could offer further gains.

Hope Lives On

RBS’s long-term targets versus

recent performance

The Wall Street Journal

Source: the company

Return on

tangible equity

Cost income

ratio

Core Tier 1

equity ratio

negative

73%

8.6%

12%+

about 50%

12%

2013 2018-’20 target

Ross McEwan, CEO of

Royal Bank of Scotland

Associated Press

2 | Friday-Sunday, February 28-March 2, 2014 AM IM UK SW FR IT SP TK BR PL IS AE GR THE WALL STREET JOURNAL.

PAGE TWO

Usually, the

biggest question

ahead of any vote

is who is going to

win. But for this

May’s European

elections, there’s another issue:

What are the parties and their

candidates trying to win?

In the last European election in

2009, the answer to the second

question was clear—parties

wanted to gain seats in the

European Parliament that would

help them shape new laws.

This time around, the answer

isn’t so obvious.

That’s because mainstream

European parties, including the

center-left Party of European

Socialists and the center-right

European People’s Party, or EPP,

are for the first time each

appointing a candidate to head

their campaigns.

These so-called lead candidates

aim to do more than bring out

votes across the European Union’s

28 member states. They are

seeking a personal prize: to

become the president of the

European Commission, the EU’s

executive arm and the only

institution with the right to

initiate policies.

Until now, the commission

president has been selected by the

bloc’s prime ministers and

presidents in closed-door

meetings after parliamentary

elections, with the new parliament

getting only a yes-or-no vote.

Giving voters more say on who

gets the EU’s top job seems like a

smart move atatime when the

bloc is facing a legitimacy crisis

after years of economic turmoil.

Yet the way this new system is

unrolling threatens to confuse

voters.

“If you try to introduce an

element of direct democracy into

the system without doing it

properly it will look likeastitch￾up,” says Heather Grabbe, director

of EU affairs at Open Society

Foundations,apro-democracy

pressure group.

The biggest problem with

modeling the selection of a new

commission president after the

way a prime minister is chosen in

parliamentary democracies such

as the U.K. or Germany is that this

new process hasn’t been endorsed

by EU leaders. Some, including

Germany’s Chancellor Angela

Merkel, have openly questioned

the link between lead candidates

and the top commission job.

That matters because EU

leaders still have to nominate the

new commission president and

send that person and other

commissioners for approval to

Parliament. While the legislature

can block their appointments,

there is no legal obligation for

leaders to select a winning

candidate.

The results of this indecision

have been obvious as European

parties select their candidates. No

high-profile sitting politicians

have been willing to give up their

posts for the insecurity of having

to win an election and then risk

seeing it ignored by EU leaders.

As a consequence, when

Europe’s top Socialists travel to

Rome this weekend to formally

appoint their lead candidate, the

only contender will be Martin

Schulz, the little-known president

of the European Parliament, who

faces skepticism even among

those in his own party in Germany,

the Social Democrats.

At the EPP’s congress in Dublin

next week, center-right delegates

will choose between former

Latvian Prime Minister Valdis

Dombrovskis and Jean-Claude

Juncker, the former prime

minister of tiny Luxembourg.

The small crop of contenders

isn’t the only symptom of the

uncertainty over the new system.

The candidates themselves have

been hazy on what position

they’re actually running for.

“Currently we’re talking about

president of the European

Commission,” Mr. Dombrovskis

said last week when asked

whether he would be content with

another top job at the commission.

Similarly, when Ms. Merkel’s

party, the Christian Democrats,

endorsed Mr. Juncker earlier this

week, it made no mention of the

commission.

Yet, despite the lukewarm

response to the idea of an elected

president, the process may already

be too far along to stop. In Rome

and Dublin, national party leaders

will take the stage alongside their

lead candidates—a photo

opportunity that may be hard to

erase when the election results

come out on May 25.

“In my opinion, the train

already left months ago,” says

Kostas Sasmatzoglou, the EPP’s

campaign manager.

Brian Synnott, his counterpart

at the European Socialists, said,

“This is really happening.”

They have already scheduled

two debates between lead

candidates that will be shown live

on major national broadcasters

and believe big channels in

Germany and France may even

want to stage their own debates.

“When the media starts writing

about them, they suddenly have a

back story,” Simon Hix, professor

of European and Comparative

Politics at the London School of

Economics and Political Science,

says of the candidates.

Whether coverage picks up

beyond broadsheet newspapers

and political television shows will

mostly depend on whether

national parties embrace their

candidates in their own

campaigns. The EPP has only

about €1.6 million ($2.2 million) to

promote its lead candidate, not

enough to run TV spots or

newspaper ads. The Socialists,

says Mr. Synnott, have even less.

ReadyorNot,HereComes

TheNextBrusselsLeader

[ Brussels Beat ]

BY GABRIELE STEINHAUSER

Note: During the last European elections, PollWatch correctly predicted 98% of seats won by each political group.

Source: Polls from all 28 EU member states conducted in the two weeks leading up to Feb. 19 and aggregated by PollWatch The Wall Street Journal

House of Shards

An aggregation of national polls shows no group winning a clear majority in the next European Parliament, which

will further complicate the selection of a new president for the European Commission, the EU’s executive arm.

February poll

751 seats

European

United Left￾Nordic Green

Left

Progressive Alliance

of Socialists &

Democrats

European Conservatives & Reformist

(EU-skeptic)

Europe of Freedom & Democracy

(far right)

The Greens

Alliance of Liberals & Democrats for Europe Group

European People's Party (conservative)

Other

56

217

44 70

200

42

30

92

iii

Business & Finance

n Allianz SE backed the new

management team at Pacific

Investment Management Co.,

even as the performance of the

U.S. fund manager weighed on

the German insurer’s fourth￾quarter earnings. 15

n Royal Bank of Scotland an￾nounced a plan to cut about £5

billion ($8.3 billion) in costs

over the next four years as the

state-controlled bank posted

its second-largest ever full-year

net loss. 15

n The European Commission

has sent a complaint to

Telefónica over its bid for the

German unit of Royal KPN,

raising the specter of tough

regulatory obstacles to consoli￾dation in the telecom sector. 15

n Gianni Versace SpA agreed

to sell a 20% stake to private￾equity firm Blackstone Group

LP in a deal that aims to fund

growth at the Italian fashion

house and could prompt a pub￾lic offering in a few years. 17

n WPP PLC became the latest

firm to be hit by turmoil in

emerging-market currencies,

which weighed on profit mar￾gins and prompted a cautious

outlook for the year ahead. 18

n A record $14 million whis￾tleblower award paid by the

SEC last year was for a tip

about an alleged Chicago-based

scheme to defraud foreign in￾vestors seeking U.S. residency,

according to people familiar

with the payment. 21

iii

World-Wide

n Cypriot President Nicos An￾astasiades said all capital con￾trols on the island would be

lifted by the end of the year. 5

n North Korea launched four

short-range missiles into the

sea off the eastern coast of the

Korean peninsula, stirring ten￾sions afteranaval incursion

earlier this week. 8

n Federal Reserve Chair￾woman Janet Yellen said the

Fed might consider a pause in

its reduction of bond buying if

the recent deterioration in U.S.

economic growth persists. 7

n Spain’s regional and central

governments may have to re￾fund as much as €13 billion

($17.8 billion) in fuel tax to

consumers and businesses af￾ter the European Union’s high￾est court said the tax violated

European law. 5

n Colombia’s finance minister

said some $12 billion in invest￾ment on infrastructure projects

this year will boost this An￾dean country’s gross domestic

product. 9

n The new conservative gov￾ernment, under pressure to

rein in its budget, will review

plans to double Australia’s

fleet of submarines. 8

n Germany wants Britain to

be a strong player in the EU,

Angela Merkel told U.K. parlia￾mentarians, stressing that its

membership was needed to

help Europe be competitive. 6

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THE WALL STREET JOURNAL. Friday-Sunday, February 28-March 2, 2014 | 27

OFF THE WALL

Hello to Arms:

Marines Bring

Back a Tradition

T

here were grumbles in 2009

when the U.S. Marine Corps

ordered troops to keep their

hands out of their pockets except

to quickly “retrieve something.”

But when the Corps’ commandant

later decreed that Marines had to

stop rolling up their sleeves, a

longtime fashion statement, the

leathernecks went into action.

“That’s what separated us from

every other branch, our sleeves,”

said First Sgt. Shawn Wright, a

career Marine who wasadrill in￾structor. Troops launched petition

drives and peppered superiors

with questions. Some complained

it hid their tattoos.

The top brass did an about￾face this week and returned the

right to bare arms, starting March

9.

“I can’t tell you how many

times we have been asked the per￾sistent question,

‘Commandant, are we

ever going to return

to SLEEVES UP?’”

said Gen. James

Amos, commandant of

the Marine Corps, in a

Facebook post on the

Marines account late

Tuesday. “I’ve thought

a lot about this over

the past 2.5 years; I

realize that it’s impor￾tant to you. Sleeves up clearly and

visually sets us apart. WE HEAR

YOU MARINES!”

The general’s Facebook post

garnered more than 30,000 likes

and nearly 3,000 comments in

less than a day. “The roar of ap￾proval from across the Corps has

been deafening,” said Lt. Col. Da￾vid Nevers, a Marines spokesman.

“In the four years since we began

using social media we haven’t

seen any post generate such an

overwhelmingly positive reac￾tion.”

Not every reaction has been

gung-ho. One Facebook comment

pooh-poohed the hoopla: “This is

why nobody takes the USMC seri￾ously.”

Rolled sleeves had long been a

point of pride. Even the highest￾ranking Marines could toil at fold￾ing, ironing and even starching

sleeves intoacrisp flattened roll

on their woodland-green camou￾flage and their desert-brown uni￾forms. Rolls could once be found

even in combat zones, but the

practice was slowly curtailed until

the 2011 order eliminated it en￾tirely.

First Sgt. Wright recalled how

preparing uniforms and shining

boots could take troops an hour

or more, especially for new Ma￾rines learning the ropes under the

tutelage of drill instructors like

him. “You could make your shoes

shine like glass,” he said nostalgi￾cally.

The sleeve rolls had to be just

right. The official Marine order at

the time said: “When authorized,

utility sleeves will be rolled with

the inside out, forming a roll

about three inches wide, and ter￾minating at a point about two

inches above the elbow.”

Sloppily folded sleeves were

known as “Gunny Rolls,” after

gunnery sergeants—salty senior

enlisted Marines known more for

their hard-bitten practicality than

spit-and-polish looks.

Marines’ sleeves stood out

from those in other services be￾cause, when rolled, the undyed

backside of the camouflage mate￾rial would show, making the roll

look white. Those in the Navy and

Air Force can still roll their

sleeves at certain

times, while the

Army also nixed

rolled-up sleeves

about a decade ago.

Unlike other

branches, Marines

rolled their combat

sleeves the same as

dress-shirt sleeves.

“The Army would roll

up their sleeves in an

accordion way, so the

button and cuff would end up on

the outside,” said Owen Conner,

the uniforms and heraldry curator

at the National Museum of the

Marine Corps.

The Marines’ precisely rolled

sleeves were a holdover of the

care put into their old-style uni￾forms—beforeauniform overhaul

10 years ago. “I understand it

sounds petty to some people,”

said Sgt. Steven Hoffman, 28,

from Freehold, N.J. “But it comes

back to tradition.”

The former Battle Dress Uni￾forms were starched and ironed,

with some troops even applying

glue or melting a bit of plastic

into trouser creases to keep them

razor sharp. Fastidious troops

would put their camouflage caps

on a metal frame after starching

them at night to help retain a per￾fect shape.

In 2004, the Marine Corps

switched to camouflage combat

uniforms made of wrinkle-free

material that don’t require iron￾ing. In fact, “the use of starch,

sizing and any process that in￾volves dry-cleaning,” according to

Marine orders, “is not autho￾rized.”

Marines also got new combat

boots around the same time.

Made of suede, they can’t be pol￾ished. The former Marine boots

were often spit-shined daily.

Some troops groused in 2007

when then-Commandant Gen.

James Conway announced that

only the summer-season, desert￾brown camouflage utility uni￾forms could have rolled sleeves.

In October 2011, Gen. Amos de￾clared all Marine Corps Combat

Utility Uniforms would be worn

“sleeves down” all year, no matter

the clime or place.

Marines are known for being

particularly ornery when it comes

to uniforms. Their camouflage

pattern has a U.S. patent, prevent￾ing other military branches from

copying.

In October, Gen. Amos quashed

a proposal that would have re￾quired male and female Marines

to wear the same “unisex” white

cap with their traditional dress￾blue uniforms after Marines, and

a few members of Congress, com￾plained.

Attention then returned to the

ban on rolled sleeves. “Americans

always likeatouch of individual￾ism with our uniforms,” said Mr.

Conner with the Marines museum.

“We’re not the Prussian Army.”

“We’re definitely glad to be

able to get it back, it was a good

call,” said First Sgt. Wright, who

added he can hardly wait until the

order takes effect. “I’m likeakid

at Christmas.”

Marines must continue to wear

sleeves down in combat zones,

during training and in winter

months. They still are forbidden

to keep their hands in their uni￾form pockets.

BY BEN KESLING

Marine sleeves up

Marine Commandant Gen. James Amos, shown speaking with reporters in 2011 before he banned rolled-up sleeves.

Associated Press

The U.S. Marines’

precisely rolled sleeves

were a holdover of the

care put into their old￾style uniforms.

©2014 Dow Jones & Company, Inc. All rights reserved. 3DJ3233

lord snowdon in the spotlight

with the wall street journal

next friday.

THE WALL STREET JOURNAL. Friday-Sunday, February 28-March 2, 2014 | 3

NEWS

Venezuelan Rebellion Spawns Folk Hero

Former General Who Resists Arrest Gains Support in Deeply Split Nation; ‘He’saOne-Man Military Rebellion’

CARACAS, Venezuela—A gun-tot￾ing retired Venezuelan general has

become a folk hero to the country’s

opposition and galvanized a protest

movement by defying the govern￾ment of President Nicolás Maduro,

engaging in a Rambo-like standoff

with security forces sent by the

president to arrest him.

Angel Vivas has been holed up in

his home in a hilly Caracas suburb

since last weekend, when Mr. Ma￾duro, on live television, ordered his

arrest for having backed student

protests that have convulsed this

oil-rich nation. When black-clad of￾ficers from military intelligence

went to the retired Army general’s

house Sunday morning, he emerged

wearing a flak jacket and armed

with a semiautomatic rifle and pis￾tol, warning that the only way he

would be taken was in a body bag.

Scores of neighbors came out in

support of Gen. Vivas and heckled

security forces, who eventually

backed down.

“I have a right to self-defense,”

Gen. Vivas said in an interview in￾side his bunkerlike home, which is

decorated with family pictures and

mementos to his 40-year career in

the army, including old rifles and

swords. “At no time did I order any￾one to commit violence,” he said, af￾ter the government said his tweet

giving defense advice caused a

death. “I was helping unarmed civil￾ians defend themselves….A priest

recommends prayer,adoctor rec￾ommends medicine,amilitary man

recommends how to defend.”

In the days since, Gen. Vivas has

become an inspiration to many of

the protesters, who have risen up in

past weeks against what they see as

an increasingly authoritarian gov￾ernment and an economy savaged

by high inflation and scarcity. The

violence has killed more than a

dozen people, mostly protesters

shot by either security forces or

pro-government militias, opposition

members say.

Venezuela’s Attorney General’s

office said Wednesday it had ar￾rested five members of the state in￾telligence division Sebin for their al￾leged involvement in the deaths of

two protesters.

Gen. Vivas’s Twitter account,

where he regularly blasts the Ma￾duro government as “illegitimate”

andastooge for Cuba, which has

close ties to Caracas, surged to

233,000 on Wednesday from some

50,000 followers on Saturday.

His 16-year-old daughter Nata￾lia’s account went to 15,000 follow￾ers, from 200, after she posted You￾Tube videos of the standoff.

“He has the guts that a lot of

people lack,” said Anessa Cafferata,

a 21-year-old engineering student

who takes part in daily protests

across the capital. “He’s protecting

his home, and we students are pro￾tecting the country.”

The short and stocky 57-year-old

general symbolizes some of Venezu￾ela’s deep divisions that have only

hardened in recent weeks as pro￾testers—largely backed by the mid￾dle and upper class—square off

against a populist government.

In the upper-middle class enclave

where the general lives, there is lit￾tle affection for the government,

blamed foracrumbling economy

where ordinary goods are scarce on

store shelves. One neighbor com￾plained that he went four months

without toilet paper. Another said

car batteries were nowafavorite

target for thieves because Venezuela

lacks the dollars to import new car

batteries. The local school has been

closed for two weeks due to the pro￾tests. Neighbors take turns standing

guard outside the general’s home,

ready to raise the alarm if the gov￾ernment returns to arrest him. Ac￾cess to the neighborhood is cut off

by barricades manned by protesters,

who have piled garbage, old tires

and tree branches at main intersec￾tions to stop government officers

from returning.

“He’saone-man military rebel￾lion,” said Ivan Monroy, an amateur

historian who visited the general’s

house this week to deliver a copy of

his book. None of the neighbors

wanted to say their full names, fear￾ing reprisals from a government

that in the past has fired public em￾ployees for supporting the opposi￾tion and in recent weeks jailed op￾position leader Leopoldo López for

supporting the protests.

Several former senior military

officers also stopped by the gen￾eral’s home in a show of support, in￾cluding Fernando Ochoa Antich, who

was defense minister during the

failed 1992 coup by then-Lt. Col.

Hugo Chávez, who eventually went

on to win the presidency and rule

for 14 years until his death last year

from cancer. “He’s making a heroic

stand,” said Mr. Ochoa, who came

along with three other retired mili￾tary men to chat with Gen. Vivas,

whose neighbors awarded him the

moniker of “Rambo.”

Venezuela’s army has a long his￾tory of political activism. In 2002,

army and navy officers briefly

booted Mr. Chávez from power, but

he returned thanks to massive sup￾port from the poor and parts of the

army that disagreed with the coup.

Mr. Chávez then purged the military.

Venezuela’s state-run television,

and private broadcasters who back

the government, have criticized Gen.

Vivas. Retired Lt. Esaul Olivar, who

heads a group calling itself Military

Revolutionary Front, called him a

“traitor” on state television and said

he was trying to organizeacoup.

Experts say the military is likely

to stay on the sidelines of the cur￾rent showdown between protesters

and the government, but that it

would become increasingly disgrun￾tled if called on to use widespread

force against civilians. “When you

speak with some active officers, they

express their discontent; they do not

like the politicization of the mili￾tary,” said retired Gen. Raul Salazar,

who was Mr. Chávez’s first defense

minister but who is now seen as op￾position-leaning. “But, of course,

there is fear of speaking out.”

Gen. Vivas first gained promi￾nence when he refused orders from

Mr. Chávez to have his troops use

the Cuban slogan “Patria o Muerte,

Venceremos,” translated as “Father￾land or Death, We Will Overcome.”

Instead, the general stepped down

from his post in 2007.

Ever since, he has used the Inter￾net as a soapbox to decry what he

sees as Cuba’s takeover of Venezu￾ela’s military and other institutions.

Gen. Vivas came of age in the mili￾tary at a time when Cuba was seen

as the enemy for having backed two

small-scale guerrilla invasions in

1967 that led to several years of vio￾lent fighting.

“We fought against them for

eight years, and then Chávez handed

the country over to them,” he said.

Gen. Vivas calls Cuba a “terrorist”

state, and Mr. Maduro the Cuban

“pro-consul.”

When the wave of student pro￾tests started a few weeks ago, Mr.

Vivas took to YouTube and posted a

long rant urging active duty officers

not to fire at protesters. On Twitter,

he offered practical advice on how

to defend against attacks, particu￾larly by gangs of pro-government

thugs on motorcycles that were

blamed for the shooting deaths of

several protesters. The general rec￾ommended stringing up nylon or

wire across streets to prevent riders

from crossing.

Venezuela’s government says a

21-year-old died last Saturday after

getting knocked off his motorcycle

late Friday by one such trap.

The government quickly blamed

the general for the death. “I have

given the order to seek out the re￾tired general, Gen. Angel Vivas, who

called for these tactics and trained

these fascists. Get him and bring

him in. Murderer!” Mr. Maduro told

a rally of supporters last Saturday.

Gen. Vivas was gardening when

his wife rushed outside and told

him, “The president is talking about

you on TV. He’s ordering your ar￾rest.”

The general says he and his fam￾ily prayed, and then decided he

would resist arrest. He took to Twit￾ter and sent a flurry of messages.

“This genocidal dictatorship wants

me to surrender and hand me over

to Fidel Castro. I WILL NOT SUR￾RENDER!” he wrote.

Gen. Vivas’ lawyer, Mercedes

Contreras, said the officials had no

proper arrest warrant. “The only

way you’re getting in here is with a

letter signed by Pope Francis,” she

says she told them.

Then the general reappeared,

toting a Colt .223 semiautomatic ri￾fle, several bands of ammunition

andaholster carrying his Beretta

.9mm pistol. He said goodbye to his

family, and gavealong soliloquy, in￾voking his pledge to defend Venezu￾ela from foreign enemies and said

the men were being used as tools by

the Cuban government.

The crowd of neighbors erupted

in applause. One began shouting at

a dark-skinned agent that he was re￾ally a Cuban in disguise.

BY DAVID LUHNOW

AND EZEQUIEL MINAYA

Above, neighbors of retired Army General Angel Vivas block their Caracas street

with a makeshift barricade to try to protect him from arrest. Right, Gen. Vivas

stands outside his house with an automatic weapon and wearing a flak jacket.

Associated Press (top); Reuters

Several former senior

military officers also

stopped by the general’s

home in a show of

support.

26| Friday-Sunday, February 28-March 2, 2014 THE WALL STREET JOURNAL.

HEARD ON

THE FIELD

SPORT

Bowled Over by the Oscars Again

With Parallels Between Sport and Film’s Hype-Fests, Here’saGuide to the Party

The Oscars are Sunday, and I am not

the first or last idiot to draw a par￾allel to major sporting events like

the Super Bowl. Both spectacles get

massive TV ratings, there’salot of

group viewing with pithy comments

and mediocre nachos, and the Cleve￾land Browns have never come close

to winning either.

This is the part where you ex￾claim: I am not going to watch the

Oscars this year! And yet you do.

Come on. You’re not fooling anybody.

You’re even picking “Monsters,

Inc.”—though it came out 13 years

ago.

The Academy Awards—that’s fan￾cypants-speak for Oscar—areacom￾forting if maddening routine. The

audience begins excitedly, and

slowly loses its mind. The unen￾thused fall asleep. The masochists

slog all the way to the end. It’s like

being a Knicks season-ticket holder.

Here are some rules foramemora￾ble Oscars viewing experience:

1. You might want to double￾check this, but I believe these Os￾cars—televised live from Ralph Wil￾son Stadium in Orchard Park, N.Y.—

are the first Oscars held outdoors at

a cold-weather stadium. How will

the weather impact the favorites?

Will it snow in the second half?

Tune in.

2. Warning: An Oscars telecast is

long. Like, brutally long. Tennis long.

Please hydrate. This year’s Academy

Awards telecast begins sometime

around 6 a.m. on Sunday and the fi￾nal award—Best Picture—is pre￾sented sometime around 4 p.m. on

Thursday, March 13.

3. By the way, there are nine Best

Picture nominees now. Nine nomina￾tions! It is now harder to not be

nominated for Best Picture than it is

to not make the NHL playoffs.

4. There are four stages of the Os￾cars telecast. Stage 1: This year’s

show isn’t actually so bad. Stage 2:

OK, this is getting bad. Stage 3: I re￾ally should do my laundry but I

can’t…stop…watching. Stage 4: (Falls

asleep for 38 minutes.) Stage 5:

(Wakes up mid-speech of Best Direc￾tor, yells at TV, falls back asleep.)

5. You do not need to watch all of

the nominated movies in order to

watch the Oscars. If you find yourself

sitting next to someone who has

watched all of the nominated movies,

congratulations, because you are sit￾ting next to Martin Scorsese.

6. If you think the Oscars are

some kind of logical endeavor, con￾sider that Scorsese’s “Hugo” won

more Oscars than “Goodfellas” and

“Raging Bull” combined.

7. If anyone at your Oscars party

refers to Scorsese as “Marty,” it’s OK

to ask them to leave.

8. Same with anyone who says

you didn’t really see “Gravity” unless

you saw the IMAX 3-D Experience.

9. Somebody at work is going to

ask you to join an Oscar Pool. Join

the Oscar Pool! It’s fun! Just know

that the Oscar Pool will be won by a

co-worker who hasn’t seen a movie

since “Harold and Maude” in 1971.

10. If you are throwing an Oscars

party, you need to decide if it’s go￾ing to be a cinema lover’s party or

an Oscars party. Atacinema lover’s

party, people dress up and have

thoughtful conversations about the

nominees and the year in cinema. At

an Oscars party, everyone sits in

their sweatpants and trashes every

single thing that happens for four

hours.

11. Will leave it up to you which

one is more fun.

12. That’s what Oscars Twitter is,

basically.

13. No you can’t serve the left￾over Super Bowl chili at your Oscars

party.Idon’t care that it was in the

freezer!

14. Ellen DeGeneres is your Os￾cars host this year but please next

year can it be Tara Lipinski and

Johnny Weir? Also please let Tara

Lipinski and Johnny Weir host the

Super Bowl. And the Final Four. And

the Masters. And the State of the

Union. Basically would like Tara and

Johnny to host everything from

here on out. Thanks.

15. For fun, divide up your Oscars

Party between people who were into

“Her” and not into “Her.”

16. No “True Detective” bickering

at your Oscars Party. Save it for the

Internet!

17. Do not get crazy with self-es￾teem issues watching celebrities ar￾rive on the red carpet. You would

look like that, too, if you ate only

kale and sand for six months.

18. Whenever you see a bad out￾fit at the Oscars, do not despair for

the celebrity wearing it. Despair for

the soon-to-be-former friend who

said, walking out the door to the

limo: “Yup. Looks amazing.”

19. Men have it easy at the Os￾cars. Basically there’s one rule: Don’t

show up looking like Mr. Peanut.

20. Yes: Those short films all look

amazing and you really should watch

them. Also: you’re never going to

watch them. Who is kidding whom?

21. It would be cool if Matthew

McConaughey won an Oscar. But not

as cool as if he pulled up to the Os￾cars in a 1970 Chevy Chevelle Super

Sport.

22. There’s always somebody at

every Oscars party who tells a long

story about the time they saw Rich￾ard Dreyfuss at the airport and he

was totally a nice guy.

23. Rule No.1of Oscars accep￾tance speeches: Thank your mother.

There is no rule No. 2.

24. The above is also a useful

rule for life in general.

25. Oscars insight: the farther

away from the stageawinner is, the

longer it takes them to get to the

podium, the happier, nicer and more

well-adjusted they are. Also more

likely they have half a turkey sand￾wich in their pocket.

26. The greatest pay-per-view of

all time would be an Oscars telecast

in which sensors inside Brad’s and

Angelina’s heads told you what they

really think about everybody in Hol￾lywood.

27. Let’s face it: This year, you

have seen three movies. And 3,508

YouTube cat videos.

28. Good luck everybody! Re￾member: Thank your mom. And

your agent’s mom!

BY JASON GAY

Seattle Seahawks quarterback Russell Wilson waves the Vince Lombardi Trophy ataFeb. 5 rally and Jennifer Lawrence grasps her 2013 Best Actress Oscar.

Warning: An Oscars

telecast is long. Like,

brutally long. Tennis long.

Five-Match Ban for Anelka

Over ‘Quenelle’ Gesture

West Bromwich Albion player

Nicolas Anelka was given a five￾game ban and $133,000 fine by

England’s Football Association after

finding him guilty of causing racial

offense with a goal celebration

deemed anti-Semitic. Anelka denied

his use of the gesture, known in

France asa“quenelle” and de￾scribed as an “inverted Nazi salute,”

was anti-Semitic.

But an FA disciplinary panel,

which heard the case this week, de￾cided otherwise for the former

France international who made the

gesture during a Premier League

match in December. The gesture in￾volves pointing one straightened

arm downward while touching the

shoulder with the opposite hand. It

was popularized by French come￾dian Dieudonne M’Bala M’Bala, who

has been convicted multiple times

for inciting racial hatred or anti￾Semitism.

—Associated Press

Video Pirates Slip Up

In Sochi Clampdown

NBC says it worked with Olym￾pics officials to stop some 45,000

instances of illegally posted video

or pirate streams showing competi￾tion during the Sochi Games.

Broadcasters pay big money to

the International Olympic Commit￾tee in return for exclusive TV and

streaming rights and guard that ex￾clusivity keenly. In NBC’s case, the

network paid $775 million for the

Sochi rights.

Officials estimated Thursday

that some 20,000 Olympics videos

were kept off YouTube and 20,000

more off other video-sharing sites

around the world. The antipiracy

police also said they located and

stopped an estimated 5,000 illegal

streams of Olympics material,

much of it live competition. —AP

Australia’s Warner Fined

Australia batsman David Warner

was fined by the International

Cricket Council on Thursday for “in￾appropriate” comments suggesting

South Africa wicketkeeper AB de

Villiers was ball-tampering in the

second Test in Port Elizabeth.

Warner said in a radio interview

that de Villiers regularly wiped the

ball with his glove in Australia’s

second innings. Australia lost by

231 runs, with South Africa fast

bowler Dale Steyn getting the ball

to reverse swing extensively for his

four wickets.

The ICC said Warner was fined

15% of his match fee after admit￾ting the offense. —AP

HEARD ON

THE PITCH

Agence France-Presse/Getty Images

Nicolas Anelka denied that his

gesture was anti-Semitic.

Associated Press (left); Reuters

4| Friday-Sunday, February 28-March 2, 2014 THE WALL STREET JOURNAL.

Interim Government Under Pressure

Yanukovych, has made no public

comment on Ukraine since the gov￾ernment there collapsed. His spokes￾man didn’t respond Thursday to calls

seeking comment.

Mr. Yanukovych’s whereabouts

wasn’t immediately known and it

wasn’t possible to verify whether the

statement was authentic.

Two of Russia’s leading news

agencies said they had received the

statement from an aide for Mr. Yanu￾kovych, but declined to provide a

copy. Neither said they had seen Mr.

Yanukovych.

Interfax later reported, citing a

source close to Mr. Yanukovych, that

he would hold a news conference

late Friday in Rostov-on-Don, a Rus￾sian city close to Ukraine and the

Black Sea.

Hours earlier, dozens of armed

men took control of the parliament

andanearby executive building in

the capital of the Ukrainian region of

Crimea, barricading themselves in￾side and raising a Russian flag above

the building. Ukraine’s acting inte￾rior minister, Arsen Avakov, said the

country’s military and police had

been put on alert.

Taken together, the moves raised

the volume on threats of secession in

Ukraine’s eastern regions, which are

dominated by ethnic Russians, and

where Mr. Yanukovych drew most of

his support.

Some more hard-line Russians in

Crimea—a Black Sea peninsula that

belonged to Russia until 1954 and re￾tains a degree of autonomy—are de￾manding that the region secede or

once again become part of Russia.

Crimea also is home to Russia’s Black

Sea Fleet.

In his statement, Mr. Yanukovych

said that people in Crimea and

across Ukraine’s southeast “don’t ac￾cept the anarchy and lawlessness in

the country,” nor do they want a new

government elected by “a mob in a

square.”

His reference was to Kiev’s Inde￾pendence Square, where the pro-Eu￾ropean uprising was centered. Pro￾testers remain gathered there and

have been weighing in on the selec￾tion of a new government.

“I officially declare my intention

to fight to the end for the implemen￾tation of important compromise

agreements to bring Ukraine out of

its deep political crisis,” he said, re￾ferring to a pact reached with the

political opposition, brokered by Eu￾ropean diplomats, on Feb. 21—a day

before he fled Kiev.

Continued from first page

Crimea has become the flashpoint

forabacklash against the pro-West￾ern protesters that drove Mr. Yanuk￾ovych from power. Despite the occu￾pation of the local parliament,

Crimea’s legislature met Thursday to

fire the government and called a re￾gionwide referendum on May 25 to

vote on further autonomy from Kiev.

“They are accusing us of separat￾ism. But we have a feeling that they

want to separate from us,” said the

parliament’s speaker, Vladimir Kon￾stantinov. “The Crimean parliament

is the only legitimate institution in

Crimea.”

Anatoly Mogilyov, the chairman

of Crimea’s Council of Ministers, said

the gunmen were asked to leave the

buildings but refused, saying they

weren’t authorized to negotiate.

A possible outbreak of violence in

the region has led to worries about

Russian military intervention. Rus￾sian officials have said there are no

plans to do so, but others have said

Russia has an obligation to protect

its military installations and citizens

if need be.

On Wednesday, President Putin

ordered military preparedness test￾ing for 150,000 Russian soldiers, in￾cluding some stationed not far from

the Ukrainian border.

Adding to the uncertainty, Ukrai￾nian officials said Russian armored

personnel vehicles were detected

outside their naval base in the Cri￾mean port of Sevastopol.

Russia’s Deputy Defense Minister

Anatoly Antonov was quoted later as

saying that the Black Sea Fleet is not

threatening Ukraine.

“Currently, all formations and

units are doing their daily activities,

including those associated with com￾bat training. Such actions pose no

threat. There are no legal limitations

on that,” the minister told reporters,

according to Interfax.

He also was quoted as saying that

“places of deployment, personnel

numbers and the number of weap￾ons” are well below levels allowed

under a 1997 agreement over the

base with Ukraine.

A group of Russian parliamentari￾ans also arrived in Crimea to assess

the situation, Russian officials said.

Sergei Mironov, leader of the pro￾Kremlin Just Russia party, who was

among the group, said, “Everyone

should know that Russians don’t

abandon their own during wartime

and it looks like things are headed

for war.”

Ukraine’s acting President Olek￾sander Turchynov warned against

any breaches of Ukrainian territory

by Russian military forces, particu￾larly those stationed in Sevastopol,

which he said would considered an

act of aggression.

The seizure of the two buildings

came a day after dueling demonstra￾tions erupted outside the parliament

between thousands of pro-Russian

protesters and Crimean Tatars, who

had backed the protest movement

that forced Mr. Yanukovych from

power.

The occupation drew deep con￾cern in the West, with the top offi￾cial from the North Atlantic Treaty

Organization, Anders Fogh Rasmus￾sen, calling it “dangerous and irre￾sponsible.”

He said that “I urge Russia not to

take any action that could escalate

tension or create misunderstanding.”

Russia’s Foreign Ministry said in

a statement that NATO’s focus on

Ukraine “sent the wrong message”

and it “strongly advised” the organi￾zation to respect Ukraine’s neutral￾ity.

New Prime MInister Arseniy Yatsenyuk, left, speaks Thursday with Vitali

Klitschko, another former opposition leader, during a parliament session in Kiev.

European Pressphoto Agency

Crimea ataGlance

The Black Sea peninsula belonged to

Russia until 1954, when Soviet

authorities transferred it to the

then-Soviet republic of Ukraine.

Source: Ukrainian Census & Election Commission

Sevastopol

Crimea

National

84%

78

49

Ukrainians

24.4%

Russians

Total

population

of Crimea

2 million

58.5%

Crimean

Tartars

Others

5%

12.1%

Ethnic breakdown

Share of Yanukovych voters from

2009 election

Black Sea

Sevastopol

Home of Russia’s

Black Sea Fleet

Simferopol

CRIMEA

100 miles

100 km

Storied Past

Crimea’s turbulent history

 From 700 BC Greeks settle

along the coast of Crimea; their

colonies are subsequently absorbed

into the Roman Empire. The

peninsula is later overrun by a

succession of nomadic tribes.

Merchants from Venice, then

Genoa, control main trading posts.

 1441 Tatars, ruled by

descendants of Genghis Khan,

establish Crimean Khanate, a

protectorate of the Ottoman

Empire.

 1783 Russia, under Catherine

the Great, annexes the Khanate,

and establishes a naval base at

Sevastopol.

 1854 Britain, France and the

Ottoman Empire launch Crimean

War to thwart Russian ambitions.

The Charge of the Light Brigade at

Balaclava, and the yearlong Siege

of Sevastopol, are immortalized by

Tennyson and Tolstoy.

 1941-42 In another epic siege,

Sevastopol holds out for eight

months before falling to the Nazis.

 1944 After liberating Crimea,

Stalin orders the deportation of

Crimea’s 200,000 Tatars on a false

pretext of having collaborated with

the Nazis. According to Tatar

estimates, over 40% of the

deportees die en route or in exile.

 1954 Nikita Khrushchev, Stalin’s

successor and a Ukrainian, orders

the transfer of Crimea to the

Ukrainian Soviet Socialist Republic,

after a mere 15 minutes of

discussion in the Communist

Party’s central committee.

 1991 Ukraine becomes

independent of the U.S.S.R. Crimea,

excluding the municipality of

Sevastopol, becomes an

autonomous republic of Ukraine.

Tatars begin to return.

 1997 Russia and Ukraine divide

the Soviet Black Sea Fleet. Russia

gets to lease the Sevastopol naval

base foraminimum of 20 years.

 2010 Russia and Ukraine extend

lease on Sevastopol base to 2042.

 2014 Armed men proclaiming

loyalty to Russia take control of

the Crimean parliament in the

capital, Simferopol after the

ousting of President Yanukovych.

UPHEAVAL IN UKRAINE

Deposed President Viktor

Yanukovych called

parliament’s vote last

week to strip him of his

powers illegal.

Kiev Looking In All Directions for Financial Assistance

received a bailout request from

Ukraine. “We are ready to respond

and in the coming days will send an

IMF fact-finding mission team to

Kiev to undertakeapreliminary dia￾logue with authorities,” IMF manag￾ing director Christine Lagarde said

in a written statement.

She said the IMF is in talks with

other countries as part of a larger fi￾nancing package.

Meanwhile, Russian President

Vladimir Putin ordered his govern￾ment to consult with foreign capitals

and the IMF on aid for Ukraine, the

Interfax news agency quoted his

spokesman as saying late Thursday.

Russia suspended a $15 billion

aid package for Kiev after pro-Rus￾sian President Viktor Yanukovych

was deposed last week by pro-West￾ern demonstrators. Russia doesn’t

Continued from first page recognize the new government in

Kiev, and there was no indication

that the Kremlin would lift the sus￾pension of its own money.

But Western officials have said

that Russia must be part of any new

assistance package.

Mr. Putin ordered his govern￾ment to continue talks on building

trade ties with Ukraine. Russian offi￾cials in recent days have threatened

to limit Ukrainian imports if Kiev

draws closer to Europe.

The IMF aid request came shortly

after an interim government was ap￾pointed in Ukraine. Mr. Shlapak, the

new finance minister, said that he

would continue talks with Russia

about credit line extensions and a

discount on gas supplies.

Ukraine is seeking aid to help it

pay existing foreign debt, finance re￾forms and stabilize its currency, the

hryvnia. Officials engaged in discus￾sions with Ukraine said the country

needs $4 billion immediately. By the

end of 2015, Ukraine hopes to raise

some $35 billion.

The European Union and the U.S.

are exploring aid packages—both

short-term and longer-term—but

some of the assistance will likely be

linked to an IMF loan deal being

agreed upon first.

“We are looking to provide im￾mediate assistance for urgent needs

in the next couple months, in close

cooperation with an IMF reform

package. In the medium term we will

also look into combined interna￾tional efforts in support of bigger

reform programs,” a senior EU dip￾lomat said.

Among the short-term options

under review by the U.S. and EU are

small bilateral bridge loans, loan

guarantees and a short-term emer￾gency credit line from the IMF that

isn’t tied to the strict conditions a

large-scale bailout requires.

Ms. Lagarde said the IMF would

first assess the economic situation

and Ukraine’s needs and start dis￾cussing with the transitional govern￾ment “the policy reforms that could

form the basis of a Fund-supported

program.”

The IMF has said it would re￾quire extra conditions for any bail￾out because of the failure of Kiev to

live up to previous financing pro￾gram requirements.

IMF spokesman Gerry Rice said

Kiev has indicated it will commit to

wide-ranging changes as part of its

bailout request.

Mr. Rice said he couldn’t address

possible timing of an IMF bailout or

whether the fund would consider a

short-term emergency credit line in

the meantime.

The IMF has previously pushed

for Kiev to depreciate its currency,

phase out fuel subsidies and tighten

government spending.

On Wednesday U.S. Secretary of

State John Kerry said Washington

could provide some $1 billion in loan

guarantees for Ukraine to help the

economy. The EU is also exploring a

number of steps—from possible fi￾nancial assistance to help with en￾ergy security and improved market

access—in parallel to an IMF-led in￾ternational package.

Mr. Yanukovych was in talks with

the IMF for much of last year con￾cerning extending a loan program

but he rejected the Washington￾based lender’s demands that Ukraine

cut energy subsidies and devalue its

currency.

THE WALL STREET JOURNAL. Friday-Sunday, February 28-March 2, 2014 | 25

PERSONAL JOURNAL

Young Designers Bring Sexy to Runways

Milan

A new generation of Italian de￾signers is bringing sexy back to

Milan Fashion Week.

Up-and-coming fashion houses

such as Marco De Vincenzo, Fausto

Puglisi, Au Jour Le Jour featured

short skirts and plenty of skin in

the Milan collections, which

wrapped up Monday. They teased

up their looks with glittery sur￾faces and im￾ages of puppies

and the Statue

of Liberty on

the clothes.

By contrast,

many older,

more estab￾lished houses—even those such as

Gucci, Versace and Dolce&Gab￾bana that built their aesthetic with

safety-pin and bustier dresses—

toned it down with covered-up

fashions. Turtlenecks, blanket

capes and jeweled cowls masked

the body’s curves.

While the big labels have

staged daring shows in recent sea￾sons, the new designers bring a

youthful allure that has been miss￾ing forawhile. The emergence of

new designers—with their fresh

and humorous take on sexiness—is

essential for Milan’s reputation as

a fashion capital. In recent years,

the city has lost its edge to Lon￾don, Paris and New York as a stage

for fresh talent.

Retailers, publisher Condé Nast,

the Italian fashion-industry trade

group and designers such as Dolce

& Gabbana and Giorgio Armani

have all undertaken initiatives to

scout and support up-and-coming

designers. Now, the new names are

giving editors and buyersanew

reason to see the collections.

Voluptuous appeal has been

woven into Italian style for de￾cades—think of the starlets of Ital￾ian cinema in the 1960s. Milan

fashion has long celebrated curves.

(A new exhibition encapsulating

the history of Italian fashion will

open at London’s Victoria & Albert

Museum this spring.)

But sexiness has become more

subtle among veteran designers.

There wasn’t a bare midriff in

sight on the Milan catwalk. Ver￾sace and Pucci, two of Milan’s raci￾est houses, put a woman’s back

and legs on display—hardly the

most risqué zones.

“Sexiness is the attitude and

sense of style that every woman

has,” Alessandra Facchinetti said

after her second collection for

Tod’s. “That doesn’t mean you

have to show legs or breasts.”

Ms. Facchinetti has found a

sweet spot designing a wardrobe

to go along with Tod’s shoes. After

stints at Valentino and Gucci, Ms.

Facchinetti was picked by Tod’s to

broaden its product offering. This

season she crossed Tod’s knowhow

in leather with interior-design mo￾tifs. Never has matching the carpet

looked as good as it did on a coat

mimicking the lozenge pattern on

the runway.Asilver leather skirt,

perforated with an oversize check,

looked effortlessly casual, a tough

feat for the material. Skirts hit be￾low the knee and collars were

high.

Prada remains the unchallenged

top draw at Milan Fashion Week.

Designer Miuccia Prada’s unpre￾dictable swings in style from one

season to the next are closely

watched. Her fall collection was

more overtly sexual—but darkly

so—than recent creations, such as

the art-inspired items now in

stores. Models wore sheer sheaths

over deep-cut sweaters, with

gaudy shearlings and fierce rub￾berized boots. Oversize chains on

the bags added to the show’s in￾dustrial feel.

Gucci and Versace, two stal￾warts of Milanese sultriness,

swayed conservative this season.

At Gucci, designer Frida Giannini

put away the flowing tunics and

navel-grazing V-necks to return to

the Mod era of the 1960s,afavor￾ite inspiration. Ms. Giannini spoke

of a return to “glamour at its pur￾est.” Gucci’s icy pink, blue and

green car coats were prim over

leather blouses buttoned up to the

top. Her go-go boots with a loafer

front could be a commercial hit

like Valentino’s hybrid Mary Jane

bootie this past winter.

Buttons were big at Versace

too: military fastenings and epau￾lets on dresses with asymmetrical

hems that dipped below the knee.

Donatella Versace (whose ramrod￾straight platinum hairdo appeared

on some of the runway models)

spiced up double-breasted coats

with lace-up stiletto boots. Sharp

shoulders channeled a self-assured

woman who could still vamp it up

in a shaggy blood-red alpaca fur.

Powerful women also charged

the runway at Dolce&Gabbana.

The design duo took a Sicilian

fairy tale as a starting point, but as

often as not, the models played

knights in shining armor instead of

damsels in distress. Rich velvets

and brocades were worn over leg￾gings with jeweled flats. The only

visible lingerie from the brand that

popularized bustiers was obscured

by a black lace gown.

Leave it to the newest design￾ers to play to Italy’s love of bare

flesh and curves. Fausto Puglisi, in

his second runway show, opened

his collection with a body-con￾scious top and miniskirt patched

with embroidery. Mr. Puglisi also

designs for Emanuel Ungaro, but

his colorful style seems to come

more easily to his eponymous col￾lection. Triangles of harlequin col￾ors provided a barely-there top on

a minidress. A bodysuit was cut

daringly high over the hips. His

fun side came through with the

Statue of Liberty’s likeness printed

on shirts. Like Salvatore Ferrag￾amo, Antonio Marras and Fendi,

Mr. Puglisi played with pleats in

skirts. But his lengths went from

short to shorter.

Marco De Vincenzo also spliced

pleats into his glittery rainbow￾colored collection, using a mix of

leather and chiffon for swingy vol￾ume. Mr. De Vincenzo, whose main

job is on Fendi’s design team, pre￾sented his collection a day before

luxury-goods giant LVMH Moët

Hennessy Louis Vuitton, the owner

of Fendi, announced it has taken a

minority stake in his house. His

use of leather in wavy strips was a

funky alternative to the bourgeois

use of leather at Tod’s.

At Au Jour Le Jour,ayoung

brand that Giorgio Armani sup￾ported by letting it stage its show

in his Milan theater, the collection

opened with chunky sweaters over

straight skirts—a popular silhou￾ette that also appeared at Bottega

Veneta and others. But the short

pinafores, tunics overwrought with

ruffles and drop-waist baby-doll

dresses in puppy and kitten prints

were kitschy. It was like watching

a little girl playing dress-up as

sexy—which can bealittle creepy.

BY CHRISTINA PASSARIELLO

Puppy Love

Young brand Au Jour Le Jour

createdagirly-sexy look with short

skirts and kitschy touches such as

puppy and kitten prints.

Sheer Style

Far from girlish, Prada offered a

darkly provocative show that

included see-through sheaths with

fur accents.

Armor for Winter

Dolce&Gabbana offered fairy-tale

imagery of cloaked knights

and rich gowns. Body-conscious

it was not.

Visual Effects

Up-and-comer Marco De Vincenzo

played with blocks of different

textures, colors and materials.

Interior Design

At Tod’s, long known for leather

goods, a bold coat echoed a carpet

pattern on the runway itself.

Vamping It Up

Versace’s women looked glam

and powerful with lace-up

boots and shaggy red fur. Getty (3); Corbis (Au Jour Le Jour, Marco de Vincenzo); Associated Press (Prada)