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The meeting saw an exchange of views on the State Duma’s spring session, and also discussion on legislative initiatives for the upcoming autumn session.

This was Mr Putin’s first meeting with the State Duma party faction leaders since taking office as president.

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President of Russia Vladimir Putin: Good afternoon, colleagues.

You know that just a few hours ago in Kazan, attempts were made on the lives of President of the Spiritual Directorate of Muslims of the Republic of Tatarstan Ildus Faizov, and Head of the Spiritual Board of Muslims of the Republic of Tatarstan’s Educational Department Valiulla Yakupov. Mr Faizov was wounded and is in hospital, and Mr Yakupov was killed. 

I just spoke before with the director of the Federal Security Service. The law enforcement agencies will do everything possible to identify and punish the criminals. I have no doubt that they will inevitably be caught.

These events remind us once again that the situation in our country is far from ideal and that we all must remain very vigilant, all of the political forces that want to strengthen Russia’s unity and ensure order in our land so that our people can live in peace, raise their children, and develop the economy. We must analyse the situation in the country very thoroughly and in our political decisions act in the people’s good and not in corporate or group interests. As for party interests, they can be but secondary considerations in this respect. What has happened is a serious signal. 

Overall, we are aware of the situation in particular regions, but it is not enough simply to be aware. We are to understand what is going on, analyse the situation and make timely decisions. In the case of this particular tragic event, no pre-emptive steps were taken.

”We always must remember when making our decisions where we are, what challenges we face, what consequences each decision might have, and how they will affect our country’s life in general.“

But let’s come back to the purpose of today’s meeting. We are meeting in expanded format today, with three deputies representing each faction. I hope that this will give the factions and the political parties they represent in parliament greater opportunities not only for their leaders but also for other members to voice their opinions and set out their vision on the ways and means for developing our country, our economy, and our social and political spheres.

The State Duma has just ended its spring session. You have worked hard and our political system has undergone many changes. The decision was taken, as you know, to make it easier to set up new political parties, the procedures for gubernatorial elections were changed, and proposals were made on changing the way the Council of Federation is formed.

All of these decisions were the right ones and were motivated by the changing situation in our country, and I noted at the start the importance of keeping up with the situation. We always must remember when making our decisions where we are, what challenges we face, what consequences each decision might have, and how they will affect our country’s life in general.

As I just said, I think we have made absolutely the right decisions. They now should be properly implemented. We must ensure that our decisions are applied in civilised fashion in practice, based on the laws. They must be carefully and calmly put into effect in strict compliance with the spirit and letter of the laws we pass. At the same time, we must ensure that destructive forces have no chance to use these decisions to attempt to destabilise Russia. We must not leave any avenue open for them to use terrorism and crime.

As you know, the global economy is in a difficult situation and is going through troubled times. Many countries are taking austerity measures to curb social spending and reduce their social spending commitments.

Fortunately, the economic transformations we have undertaken in Russia have so far saved us from having to follow suit, and our economic policy has enabled us to continue so far to meet all of our social commitments.

As the law requires, we index all social payments. We have been raising pensions and raising service pay for the armed forces and security services. The Defence Ministry is raising wages, and the Interior Ministry will do so too, starting in January 2012, and the other security agencies are taking similar steps. We do not foresee any circumstances that could make us change these decisions.

”We index all social payments. We have been raising pensions and raising service pay for the armed forces and security services. We do not foresee any circumstances that could make us change these decisions.“

You are aware of the social sector policy initiatives that I set out in my election campaign articles. I spoke about them at the recent State Council meeting too, as some of you know. I take the position that everything I set out in those articles and in the Presidential Executive Orders of May 7 will be certainly implemented. 

The Government is hard at work preparing the budget now. The upcoming autumn session will see the very important undertaking of passing what is our country’s basic economic law – the national budget for 2013 and the following two years.

This is a complex process, as we all well know. Most of you have worked on the budget before and you know how complicated a task this is, but we must pass it. I want to once again emphasise in this respect the importance of refraining from any populism. It would be extremely dangerous to let state spending start ballooning to unjustifiably high levels today, because tomorrow we might end up forced to make drastic spending cuts. It is not at all in the people’s interests to feed them promises and give away all the resources today. The wisest policy is one that will ensure our economy’s sustained development and enable us to fulfil our promises and meet our commitments without undermining the budget itself.

This is obviously not an easy task and is always the result of compromise. Any budget is always the result of compromise. We have so far succeeded in reaching such compromise based on a mutually acceptable and reasonable platform. I hope that this time will be no different.

”The wisest policy is one that will ensure our economy’s sustained development and enable us to fulfil our promises and meet our commitments without undermining the budget itself.“

The Government has difficult tasks ahead in this respect. As I have said, including during my Address to the State Duma, one only needs to look at what is going on in other countries, including developed market economies, where they are quite simply cutting budget spending, cutting pensions and social benefits. In Spain they just announced that they will not pay Christmas bonuses, and that resulted in strikes there. In other words, when social spending gets out of hand, governments end up having to make cuts. What does this lead to?

You know what is happening in Greece. In Italy, the number of suicides has more than doubled, and this is in what always looked to us like prosperous Europe.

We are heavily dependent on Europe. Our markets are there. Bilateral trade with Europe comes to $394 billion – a huge amount of trade. If the markets there shrink, we will inevitably feel the consequences too.

I met with steelworkers a few days ago, and they are feeling the effects of the problems on the global markets. Some companies export two thirds of their output, some one third, but even a third of output is already a lot. It would be very hard for us to try to offset their losses in export earnings through domestic demand if the export markets shrink. The situation is the same in the energy sector, and I want you to remember this. The energy sector revenues account for half of our budget, and so we must be very careful indeed. I pay so much attention to the budget issue because it is so crucial for the short and medium term.

Colleagues, I do not want to make a long speech. We are here to discuss the results of the session that has just ended, and to look ahead at the work coming up in the second half of the year.

I will end here. Thank you very much.

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