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The socio-economic situation in Russia was discussed, including writing off debts from the regional budgets, and the volumes of social payments in 2005.

The Cabinet members spoke on preparation for the upcoming Mr Putin's visits to Chile and Brazil.

The Russian head of state also focused on cooperation with Far East neighbours of Russia, having given his assessment of Sergei Lavrov’s interview with Russian TV channel NTV. The Russian Foreign Minister expressed his opinion on issues of border delimitation with China and Japan.

In his turn, talking about Kuril Islands' question Mr Putin announced that so far the two sides “had not been able to reach an understanding of this extent – the way that we see it and saw it in 1956.”

In the Soviet-Japanese declaration that was signed in 1956 and ratified by the Supreme Council of the USSR and the Parliament of Japan, an agreement was made to give Japan the islands of Habomai and Shikotan after the signing of the peace treaty. As the legal successor of the USSR, Russia recognises the Declaration of 1956 as valid, but Russian-Japanese dialogue is required to realise it. Currently, Tokyo refuses to sign a peace treaty with Russia, saying that the territorial problem has not been regulated.

The Russian President emphasised that Moscow has always fulfilled and will continue to fulfill the obligations it has taken on with Japan, to the extent that our partners are prepared to fulfill the same obligations.