"Komsomolskaya Pravda": "Reserves to Last Two and a Half Years"
The Finance Ministry estimates that in 2011 the Government will need to resort to foreign borrowings to cover the budget deficit.
Yesterday's Government meeting focused on two seemingly unrelated issues. The first one was the adoption of the Budget Code amendments.
"As you know, the current Budget Code imposes strict limitations on using oil and gas revenues and on the budget deficit size," Prime Minister Putin said as he opened the meeting. "These policies have served us well in recent years and allowed us to accumulate 8 trillion roubles worth of reserves. Nevertheless, the legislation should adequately reflect the current economic reality. The amendments, proposed by the Finance Ministry, will allow us to use the Reserve Fund resources to cover the expected budget deficit."
The Government estimates that the budget will remain in deficit until 2013, but already in 2012 it will be less than 3% of the GDP, Minister of Finance Alexei Kudrin said.
"In Europe, the budget revenue has fallen by 10%, whereas in Russia it has dropped by 30%. We estimate that the Reserve Fund will last for two and a half years, and beginning with the second half of 2011, we will have to resort to foreign borrowings to cover the deficit."
Mr Kudrin did correct himself, however, saying that it was only a pessimistic scenario, and that the Government expected that the crisis would end sooner, the markets would rebound, the oil prices would go up, and there would be no need to borrow funds abroad.
The amendments to the Budget Code, adopted by the Government, revoke the three-year budget. Instead, the Government is going to submit to the Duma a new 2009 budget. According to Mr Putin, the Government is not planning to cut spending in 2009. On the contrary, it will be increased to finance the anti-crisis measures. The Government will honour all social commitments it has made.
To preclude budgetary fraud in the future, whether it is a surplus or a deficit budget, the Prime Minister has signed a decree on mandatory anti-corruption expertise for the draft laws, prepared by the Government agencies.
"The decree mandates the agencies to display the draft laws they have prepared on their websites for subsequent examination by independent experts," Mr Putin said. "The comments and amendments proposed by the experts should be provided with detailed responses, explaining why they have been either accepted or declined."
All laws should be transparent to ensure that they are not interpreted arbitrarily or ambiguously, the Prime Minister concluded.
