The economy has been promised another 350 billion roubles in aid.
The two meetings President Dmitry Medvedev held with the Prime Minister and ministers have resulted in a promise by cabinet members to allocate a further 350 billion roubles in support of the economy in the near future. The Central Bank thinks the problems with banks are over, and the White House is now planning to guarantee company loans. The necessary funds may become available from the Investment Fund or the State Investment Programme for 2008 and 2009.
Yesterday President Dmitry Medvedev held two "snap" meetings at his out-of-town residence Gorki, which appear to have been dedicated to new financial injections in the economy. In the afternoon, Mr Medvedev invited Prime Minister Vladimir Putin. The presidential press briefing was succinct: "The social and economic situation was discussed." At 5 p.m. members of the Government's economic team and Central Bank chairman Sergei Ignatyev were summoned to Gorki. The second meeting passed without Mr Putin. Among officials summoned to Gorki were Central Bank First Deputy Chairman Alexei Ulyukaev, Deputy Prime Ministers Igor Shuvalov and Alexei Kudrin, and Economy Minister Elvira Nabiullina. Arkady Dvorkovich, an aide to the Head of State, and Sergei Naryshkin, the presidential Chief of Staff, represented the presidential administration.
An opening statement said that the banking sector no longer needed liquidity support. The bank Governor assured Mr Medvedev that "the number of banks experiencing financial difficulties has become fixed and is no longer growing." In the opinion of Mr Ignatyev, stability came after a law on subordinated loans to the banks was passed and the Central Bank issued 300 billion roubles to Sberbank. Mr Ignatyev did not make new proposals in Gorki yesterday. Mr Kudrin, on the other hand, said he was ready to spend as much as on Sberbank.
The Deputy Prime Minister said he was prepared to draft decisions, including changes to the Budget Code, "on state loan guarantees, both for two to three years or more." Mr Kudrin said he was ready "to earmark 300 billion roubles for such guarantees" and increase this sum "if necessary." Such amounts have never been considered by the Central Bank or the Government as an economic support measure. Their sum, however, will not surpass 5% of all banking system's assets. In addition, Mr Kudrin said that "the Government is discussing measures to buy out mortgages to improve banks' balance sheets", a Russian counterpart move to the buyout of "sub-prime mortgages" planned in the earlier stages of the "Paulson Plan" in the US (see p. 1). First Deputy Prime Minister Igor Shuvalov also spoke of new infusions. The White House, he said, is going to allocate another 7 billion roubles to subsidise loans for farm producers and will earmark up to 30 billion roubles for leading air carriers (see p.14). Ms Nabiullina had previously announced at an International Forum on Nanotechnologies that an additional six billion roubles would be allocated in support of technological exports.
So far, all these remarks have been unofficial, and at the presidential residence nothing was said about a new "anti-crisis package" and its sources of financing, which Mr Putin is likely to unveil. Mr Shuvalov is looking for resources: yesterday, before going to Gorki, he chaired a meeting "to improve the use of the Investment Fund." On November 27, Mr Putin instructed him to "optimise" spending. On the same day Mr Kudrin suggested that all funding be stopped for unlaunched projects, thus saving 400 billion roubles. The White House promised to sort out the issue before the weekend. An alternative source of financing is to redistribute budget sums earmarked for federal target programmes and federal target investment programmes. According to the Federal Statistics Service, between January and September 2008 half of state investments - 658 billion roubles - were backed by the budget. So far, unspent money is in the Treasury, and the Finance Ministry is not insisting that it be spent quickly. The Budget Code allows redirecting funds untapped by slow users.
Pyotr Netreba