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Official website of the President of Russia

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Meeting with Government members

June 24, 2015, The Kremlin, Moscow

Vladimir Putin met with Government members to discuss accessibility of social services, including in remote districts and rural areas.

The President also announced that he has signed an executive order extending for a year special economic measures to ensure Russia’s security.

* * *

President of Russia Vladimir Putin: Good afternoon, colleagues,

As we agreed, we are here today to discuss our citizens’ access to social services, especially in remote districts and rural areas. But before we start, we will first look at a few matters of the moment.

One of these matters is our response to our European colleagues’ decision on the sanctions. The Prime Minister sent me a letter, proposing that we extend the measures that we took in response to the actions of our partners in some countries. In accordance with this letter, I signed today an executive order extending special economic measures taken to ensure our country’s security, and I ask the Government to promptly draft and issue the corresponding Government resolution.

Prime Minister Dmitry Medvedev: This will be done, Mr President. These documents are already being drafted now.

Vladimir Putin: As the Prime Minister proposed, we are extending these measures for a year starting from today. I think that this will be a good opportunity for our farmers too.

The 19th St Petersburg International Economic Forum has just ended in St Petersburg. Mr Prikhodko headed the forum’s organising committee. Mr Prikhodko, what are your impressions and what were the results, as you see them?

Deputy Prime Minister and Government Chief of Staff Sergei Prikhodko: Mr President, over the St Petersburg International Economic Forum’s three days of work, we had more than 10,000 visitors from 120 countries. This was more than last year. Fifty high-level representatives from foreign countries took part in the forum, including many former heads of government, who worked actively at the various sessions.

Many members of the Government, officials from the Presidential Executive Office, State Duma deputies, members of the Federation Council, and representatives of the Eurasian Economic Commission also took very active part in the forum. The heads of 63 regions were there, representing our country’s regions.

Foreign media outlets also showed interest in the forum’s work. In particular, more than 70 foreign television channels covered the plenary session. Mr President, you saw the great interest in the forum during your speech and your discussion with the forum participants, who were very happy with this chance to talk.

The forum’s programme was substantial in content and in scale. We held 150 different events. In their remarks and conversations, the participants noted that the discussions were very open and to the point, and our guests said that the results would be useful for the future work in Russia. Together with the experts, we will take these discussions’ results, sum up the proposals and comments and report our suggestions to you.

As we in the organising committee see it, the main result is that, despite the initial scepticism from some of our partners and the cautious attitude related above all to the sanctions pressure, global business’ interest in Russia is still as strong as ever. Financial investors and heads of big companies from Europe, the Middle East, the Asia-Pacific region, and North America all showed real interest in continuing their work on the Russian market. We see this too in the practical result of the forum’s business section: more than 200 agreements signed for a total of around 290 billion rubles (this is the open figure, which does not include information on agreements that are considered commercial secrets). This total includes loan agreements signed for a total of more than 40 billion rubles.

Among the companies traditionally active in signing agreements were our big Russian companies in the energy sector ( Gazprom, Rosneft, Rosatom), transport sector ( Russian Railways), chemicals sector (SIBUR, FosAgro, EuroChem), and the financial sector (Sberbank, VEB, Gazprombank, and Rosselkhozbank).

Let me end by saying that we together with the St Petersburg administration are now smoothly beginning preparations for the next forum, the twentieth anniversary forum. It will take place at a new venue, called the EXPOFORUM. We hope that the change of venue will not make the forum any less attractive, but on the contrary, will offer even more comfortable working conditions for the Russian and foreign businesspeople visiting St Petersburg. We will continue working in this direction.

Vladimir Putin: Thank you very much.

Mr Novak, June 30 is the date when our discount gas prices for Ukraine expire. Are there any contacts with our partners, including in the European Union, to continue further cooperation in the same key we have had up until now?

Energy Minister Alexander Novak: Mr President, allow me to report. We continue trilateral consultations within the framework of the Minsk Agreements in the Russia-EU-Ukraine format on gas issues. The main goal is reliable gas supplies to European consumers and reliable transit of gas through Ukraine during the autumn-winter season. We have planned another round of these consultations for the end of this month, taking into account the fact that the discount provided in the second quarter will soon expire. We plan to talk with our partners about the volume of gas we need to pump into Ukraine’s underground gas storage facilities before the start of the autumn-winter season, by October 15, the amount of financial assistance offered to Ukraine by the EU and, possibly, pricing issues.

We believe, together with the European Commission, that Ukraine needs to pump 19 to 20 billion cubic metres of gas into its underground storage facilities by October 15. Currently, that indicator stands at 11.5 billion cubic metres.

In accordance with the trilateral statement we made on March 20, when we discussed gas supplies for the second quarter, the Russian Federation is looking at the possibility of offering a discount on gas price on a quarterly basis as agreed between Naftogaz and Gazprom, but first, a relevant request should be made by the Ukrainian side. I want to let you know that until now, the Ukrainian side has not made any such request, so today, the situation is as follows: the quarter is about to end, and we are awaiting our Ukrainian colleagues’ request.

Vladimir Putin: Let’s wait; after all, it is Ukraine that needs it, not us. So I hope that this will be done in a timely manner.

The one thing I would like to point out is that the final price is the key issue. Clearly, with such a serious drop in oil prices, which is ultimately used to calculate gas prices, we cannot offer the same discount, in the same volume, as before. But in any case, the final price for Ukrainian consumers should be at the same level as for neighbouring nations like Poland, it should not be higher.

And the Government should calculate this discount and make corresponding decisions; Mr Medvedev and I have discussed this. If you receive such a request, I request that you hold talks, conclude them and make the corresponding decision.

Alexander Novak: Ok.

Vladimir Putin: Thank you very much.

And an issue that is highly important today is preparing the budget for 2016 and 2017–2018. I would like Mr Siluanov to say a few words about this. I know that the Government is currently working very actively in this direction.

Finance Minister Anton Siluanov: Mr President, indeed, we have begun the budgeting process. Today, the Cabinet held the first reading at the budget commission and tomorrow, we are having a Cabinet meeting on this matter.

The budget is complicated, and its main goal is to stimulate economic growth by reducing inflation, to reduce the cost of credit resources on the market, and improve the quality of federal budget spending.

Revenues are dropping compared to the parameters we had approved within the framework of the 2015–2017 three-year period. According to our assessments, revenues will fall by 1.8 trillion rubles next year, and by 1.6 trillion rubles in 2017, so we are giving a great deal of attention to budget spending. And here, we need to make a decision that would not allow us to boost spending, but let us finance our key programme goals and actions.

So we suggest staying on spending parameters that were approved for the 2015–2017 budget (I am referring first and foremost to 2016–2017), reducing only the unallocated proceeds within the framework of conditionally approved expenditures that we did not allocate to specific programmes or actions, and fit all of the necessary goals and objectives in that volume. Why? Because we will already see a significant budget deficit in this case; in 2016, we will have a deficit of 2.4% of GDP. But given the challenge of reducing the deficit and increasing balance, we will gradually reduce the deficit volume to reach a minimal deficit of 0.7% of GDP by 2018.

This will allow us to maintain the reserves we have accumulated during the good years, and these reserves will be used evenly over the course of three years to ensure that they also remain for 2018. So on the one hand, our goal is to ensure all our targeted programmes and actions fit in the spending volume, and on the other hand, to maintain the reserves without increasing the budget deficit. We will make spending more efficient, identify our priorities with regard to our spending, our commitments, our powers, and we will report on the results of our work.

Vladimir Putin: This work is always difficult and very tedious, in the sense that there are many priorities, and all of them are the most important. Of course, we must proceed from the real situation our nation is living in and our economy operates in.

At the same time, here is what I would like to point out. We have already spoken about this once and touched on these issues: according to our monitoring agencies, our companies’ credit debts stand at 2.2 trillion rubles. The resources that are used inactively in some areas are in the hundreds of billions. You spoke about the need to use what we have more effectively; this is exceedingly important in our joint work. Colleagues, I would like to ask all of you to give this your most thorough attention. Ms Golikova [Chairperson of the Accounts Chamber] will speak today and tell us more about it. Thank you.

Let’s begin our work.


June 24, 2015, The Kremlin, Moscow