Air France plane diverted by Russia for “military exercise”

BERLIN - Air France says a plane carrying 495 passengers and 22 crew was diverted on its way from Shanghai to Paris after Russia announced at short notice that part of its airspace was closed for a military exercise.

The company said flight AF111 was forced to land in Hamburg, Germany, early Wednesday to refuel because the plane had too little fuel on board to complete the flight following its detour.

Hamburg Airport confirmed that the plane landed shortly after 6 a.m. (0500 GMT) and was able to take off for Paris again after an hour and a half.

It wasn't immediately clear if Russia's military exercise was linked to the increased troop activity on its western border with Ukraine.

Meanwhile, the World Bank warned Wednesday that Russia's economy could contract this year if the country is hit with more serious sanctions following its annexation of Crimea.

The organization said in its annual report that it expects the Russian economy to grow 1.1 percent this year if the fall-out from the Crimean crisis is short-lived, but warned of a 1.8 percent fall if Russia is hit with more serious sanctions than those already specified.

So far, the sanctions have been fairly limited and haven't touched on Russia's vital economic interests. The United States and the European Union have imposed travel bans and asset freezes on two dozen Russians who are believed to be close to Putin.

The World Bank said Russia's economic problems are not just to do with the recent events in Ukraine. Last year, Russia grew 1.3 percent, its lowest growth in the past 13 years barring the downturn-hit 2009.

The bank blamed the lack of structural reforms for the downturn. In the past, it said the economy's structural deficiencies were "masked by a growth model based on large investment projects ... fueled by sizeable oil revenues."

The developments in Crimea, it added, "compounded the lingering confidence problem into a confidence crisis and more clearly exposed the economy weakness of this growth model."

Investors have certainly grown jittery of late - recent figures suggest that Russia suffered roughly $70 billion of capital outflow in the first three months of the year, which is more than in all of 2013. Russian monetary officials, however, insisted that they would not be introducing capital controls to stem the flight.

Mikhail Dmitriev, of the Moscow-based Centre for Strategic Research think tank said the annexation of Crimea will only temporarily distract Russians from worrying about the economy, according to Reuters.

"If there is no economic growth it is likely that the influence of Crimea and other foreign policy events on political ratings won't be long-lasting," Dmitriev, who predicted mass protests against Putin in 2011-2012, told Reuters. "The population will start to look at politics from the point of growing economic struggles."

Dmitriev was beaten and had his laptop stolen by unidentified people last week. It is unclear whether the attack was related to his work and sometimes forthright views.