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Vladimir Putin: Good afternoon,

We have gathered to review progress in the work of the Commission charged with preparing proposals on the delimitation of jurisdictions and powers between different levels of government in the Russian Federation. You are members of that Commission and you know that we have had to work against harsh deadlines. We agreed that interim results would be submitted by July 1, that is, the day after tomorrow.

Today it is important to decide on our actions in the future. In the first place, we should discuss how to effectively implement the ideas and proposals worked out by the Commission. Ultimately they must be translated into specific government decisions and law-making initiatives.

Restoring the common legal space in Russia is a key national task. The first stage – harmonising regional and federal legislation – can be said to be nearing completion. In any case, work is proceeding at a brisk pace. Your commission has been charged with taking the next step: developing a strategy for clear-cut division of powers in order to make the entire vertical power structure in the country more effective, and I look forward to a positive result of your work.

The Commission faces a unique task in terms of scale, significance and potential consequences. As far as I know you have already analyzed 215 pieces of legislation and have proposed amendments, sometimes very substantial amendments, to 135 of them. The political and economic situation in the country depends crucially on how the boundaries of responsibility and the volume of resources the various levels of government will have at their disposal, are be determined. I am not exaggerating. And we must clearly define the powers, identify the areas under joint jurisdiction as quickly as possible. That is necessary for the Government to properly and effectively fulfill its public functions, its obligations to the people.

All the levels of government are awaiting the results of your work. Indeed, as I am sure you know, the heads of the Russian regions, after actively joining the work to harmonise their respective regional legislations with federal legislation, suggested that the Commission be composed as it is. This is in the interests of the federal centre, the regions and the municipalities. Most importantly, this is in the interests of the country’s citizens. You understand better than anyone the situation in many sectors that are vital for the ordinary citizen. All schools, much of the public health sector and the entire housing and utilities sector have been brought under municipal jurisdiction. But nobody bothered to think and recall that in the former planned economy all funding was in fact centralised. The regions lobbied for certain amounts of funding and all these funds were distributed from top to bottom, from the Finance Ministry to various planning commissions. Now all these vital spheres have become depended on the tax system. But nobody bothered to estimate whether the tax base was sufficient to maintain the housing and utilities sector and schools, and to pay decent salaries to teachers and municipal medical professionals.

The delimitation of powers is the key to solving a long-standing and complicated problem in inter-budgetary relations, the sharing of responsibilities for social issues and for promoting business activity in the regions. We should either cancel certain functions or, failing that, fund them properly.

These decisions are being eagerly awaited by local government bodies which are chronically underfunded because of confused legislation.

All these levels of government are represented in the Commission. As far as I know, it has 31 full-time members. They include representatives of the Government of the Russian Federation, the regions, municipalities, the State Duma, the Federal Council and the scientific community. Your work has to do with a pivotal and extremely sensitive sphere in which there is a constant need to coordinate interests, to look for compromises and of course to be able to listen to and hear each other.

I can say without exaggeration that the essence of your work is the building of the state in the Russian Federation in the most direct sense of that word. We are not talking about creating or perpetuating one-sided additional prerogatives for the centre, the regions or the municipalities. We are talking about a balance of interests, above all about the interests of the people. We are talking about ensuring the legal and practical equality of citizens throughout Russia. Ultimately, we are talking about the standards that we must guarantee for the social well-being of the people and economic flourishing of the country.

For all these reasons I would like to hear you speak in detail about the interim results of your Commission and about the problems that cropped up during your work. I hope we will exchange opinions on the controversial issues that you deem necessary to discuss.

Thank you for your attention and let us get down to our discussion.