"Rossiiskaya Gazeta": "ECONOMY IS THE WATCHWORD"
The Government passes amendments to the Budget
The need to offset the budget deficit in 2009 out of the Reserve Fund will make it necessary to amend the Law On the Budget, Prime Minister Vladimir Putin told a meeting on economic issues yesterday.
The information was first revealed last Friday when the Prime Minister met with the leadership of the United Russia party at his Novo-Ogaryovo residence. Mr Putin discussed amendments to the budget, which would raise the maximum allowable deficit above the current 1%. Regarding the "ceiling" the Prime Minister said: "Of course we will have a deficit, but not as large as, for example, in the United States, where it hit 12.5%."
In the opinion of Finance Minister Alexei Kudrin the budget deficit in Russia in 2009 will be at least 8% of the GDP for the first time in the last ten years. Mr Putin said for his part that it would be necessary to reduce the deficit in 2010 and the following years.
The current Budget Code, the Prime Minister pointed out, was written in 2003-2007, when the external conditions were entirely different and when the challenge was to save the windfall profits from oil and gas exports. As a result significant financial reserves have been accumulated. As of March 1, 2009 the Reserve Fund amounted to 4.9 trillion roubles and the National Welfare Fund to 3 trillion roubles. "These resources enable us today to implement active anti-crisis measures in the midst of a severe crisis of world finances and the world economy," the Prime Minister stressed. Earlier he said that the reserve money would be enough to balance the Russian budget "this year and in the following years."
By the same token Mr Putin believes that in adjusting the budget it is necessary to preserve macroeconomic stability and the stability of the national currency, "otherwise inflation will cancel out all our efforts."
The Prime Minister and the ministers in charge of the economy discussed yesterday the procedure of using the reserves and the algorithm of supporting the regions. The Government is sure that regional authorities should be given the right to influence the financial situation in the municipalities more promptly by delivering financial aid to municipal budgets.
Moscow issue
Pyotr Skobelev
