Transcript of the beginning of their conversation:
Sergei Stepashin: Can I make you a few gifts, Mr Putin? We are celebrating the 1020th anniversary of Russian Christianity and are regaining our property. Do you remember how Nikita Khrushchev ceded almost all of it? Now we have regained almost all our landed possessions in the Middle East-what belonged to the Russian Empire and the Soviet Union.
I want to show you, Mr Putin, the first certificates of reinstating our estate in Bethlehem and Jericho-here they are, the two papers. So this is Russian land now.
Vladimir Putin: Congratulations!
Sergei Stepashin: Allow me to congratulate you, too. The principal issue will be settled in July. It concerns the St Sergius Metochion in Israel. I passed your letter to Mr Olmert (Israeli Prime Minister Ehud Olmert).
Vladimir Putin: We have discussed this theme. They are settling the issue in our favour.
Sergei Stepashin: This is a landmark event, you know.
Vladimir Putin: We should thank them.
Sergei Stepashin: Certainly! There are many other things I would like to tell you. Implementation of the budget for 2007 budget implementation comes first. I know the Government Presidium discussed it. We are ready with a conclusion to present to the State Duma in September.
There are problems you surely know but I cannot help mentioning. True, we have enough money, and national projects are success. Mind you, they have not boosted inflation. I mean that the economy does not feel inflationary pressure in the fields where money is not misspent and reaches the consumer.
There are two or three problems, however. First, investment projects are implemented in a very bad way. A mere 72% of ambitious projects have been commissioned for a number of reasons-inadequate planning, regulations drawn too late and, last but not least, inadequate managerial experience. There is also a big problem-Federal Law No 94 (the Federal Law on the Placing of Contracts for Commodity Supplies, Job Execution and Services for State and Municipal Needs). This law concerns contracting, and a good idea underlies it. Let us be serious about fighting corruption-let us make everything transparent! As for budgeting proceeding from previous achievements, we have over-organised it.
Vladimir Putin: It is entangled in red tape.
Sergei Stepashin: You are perfectly right. The Accounts Chamber has no right of legislative initiative. We are ready with proposals for the State Duma to make certain amendments in Federal Law No 94, and if we are to shift to budgeting proceeding from previous results, let us introduce real responsibility for such results.
Russia presently has its Treasury, Accounts Chamber and Rosfinnadzor (Federal Service for Fiscal and Budgetary Supervision). We are ready to guarantee contest transparency. This is certainly a serious problem.
Piecemeal funding is another problem.
Last but not least is what surprised us more than anything else in 2007. Despite extra allocations to settle the most serious social issues, the social sphere could not use the budget money it received-40-50% of direct budget allocations were not used up. Such things should be punished. I wrote it all in a memo I addressed you, and I shall talk about it all to the Duma in September.
Vladimir Putin: OK.
Sergei Stepashin: There are many other problems I shall tell you in writing.
Vladimir Putin: OK.