Anger over the Russian government's clandestine move to bust up and takeover parts of the Yukos oil concern continues to seer in the German media on Friday, with many predicting the state's moves to expropriate private businesses could have dire consequences for Russia's economy. Growth may be considerable now but if foreign investors flee and government takeovers lead to inefficient and decaying industrial giants, the country could face a collapse worse than that which followed the fall of the Iron Curtain.

The conservative Berlin-based Die Welt writes: "It's now clear that the state-owned crude oil firm Rosneft acquired Yukos' core business through a straw man -- a (government) expropriation of a company that will have widespread consequences on the economy." The paper worries that other cases will follow and "the whole economy will be sorry: the private oligarchs have finally been investing in their companies, but now they will be replaced with a new layer of bureaucrats who will want to get their share."

Generally the antithesis to the Die Welt's conservative thinking, the left-leaning Die Tageszeitung finds plenty of room to agree on the issue. "Following the asset stripping of the private Yukos concern, nothing else stands in the way of laying the foundations for a state-owned raw material's empire," the paper writes. "The winners of this move are its mastermind -- Vladimir Putin's chief lieutenant and Rosneft board member Igor Setschin -- and Moscow's new state-appointed oligarchy." The editorial grimly forecasts the "end of Russia's modernization."

Under the guise of patriotism, the biggest redistribution of companies is taking place since the dubious privatizations of the 1990s. But this time the beneficiaries are state dignitaries who understand how to socialize losses (e.g. stick taxpayers with the bill) and stick the profits in their own pockets. Worse yet, argues Die Tageszeitung "Russia won't fail to use the power it will now amass in the energy sector as a political tool for increasing the pressure abroad -- both near and far." And this is just the perspective for the medium-term. "The departure from modernization will dampen any hopes that Russia will have enough economic growth to join the developed world. In the end, rotting structures could collapse behind the magnificent façade -- and it could result in an impact even greater than the collapse of the Soviet Union."

Is Putin completely indifferent to the foreign shareholders in Yukos who have just been fleeced, asks the conservative Frankfurter Allgemeine Zeitung? "Not even Putin is concealing the fact that this was an expropriation," the paper writes. "The government is carrying out its revenge for the doubtlessly dubious privatizations that took place a decade ago with the aim of taking control of the key sectors of the national economy." In light of the Yukos maneuver, people are rightly asking what, exactly, it is that's crossing the minds of Putin and his loyalists? "And some western investors may soon be rubbing their eyes when they look around and see state-owned competition in every sector in the new-old Russia."

Yet while Russia moves away from democracy and free markets, its closest neighbor, Ukraine, is preparing to embrace these concepts in its third-round presidential runoff, which will likely result in a victory for opposition candidate Viktor Yushchenko. His probable election follows a heart-warming "Orange Revolution" in the country that saw millions of protesters battle against a moribund and corrupt government that tried to steal an election. The vote brings hope, but the country still has serious problems -- a system that's utterly messed up and a powerful neighbor that seems fixed on autocracy.

"Russia's most important western neighbor, Ukraine, will elect a new president with the entire world watching as it prepares to end an autocratic, mafia-like system," exclaims the left-leaning Sueddeutsche Zeitung. "The impressive grassroots movement at Independence Square pressed hard against the ailing state for three weeks. Now they are getting their payback by putting Viktor Yushchenko in the country's highest office," it continues. Nor will Russian President Vladimir Putin succeed in hindering the progress of democracy. "That's the greatest triumph of the protestors in Ukraine -- they'll be able to look out across the border and laugh at Putin. Their desire for freedom and the push for transparency and justice stands in diametrical opposition to the direction Putin has been taking Russia in recent months." After all, Putin is constricting democracy, he's controlling and mistrusting. "His politics demonstrate his fear and his striving for autocratic power."