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Alexander Lukashenko: This is our first meeting in 2003, our first working session; and I would like to congratulate all those present, including the journalists and through them the Belarusian people and all the Russians on the past holidays, the New Year and Christmas. And we had a big holiday yesterday, Epiphany. May the coming year bring success to Russians and Belarusians.

I believe that the main result of last year is that we have preserved our Union, have not rolled back from the frontiers achieved, and have preserved our trust in each other and in good human relations. This was highlighted by our meetings with the Russian President yesterday and today. Our Ministers and the heads of all the branches of power who are present in Minsk have also met with their colleagues.

A direct and frank exchange of opinions on the strategy of Union building has deepened our work on the concept of our Union’s Constitution. I think that by the time of our next meeting, we will have an agreed draft of this fundamental document as envisaged by our work plans.

During the meetings with the Russian President, it was clearly determined that our further progress must proceed strictly in compliance with the earlier agreements. They are sealed in our Treaty on the Creation of the Union State and the programme of actions to implement it.

The success of Belarusian-Russian integration hinges on our efforts to form the common economic space.

I would like to note, in fact to repeat what Mr Putin has said: last year trade between Russia and Belarus increased by 5% to about $10 billion. But that is only the official figure. We have no borders. And I think unregistered trade, when people engage in free trade ignoring the border would add a couple of billion. So, we may well contest the place of Russia’s main trade partner with Germany. Officially, Germany is the largest trading partner of Russia. But if you factor in all trade, Belarus may well regain the first place in trade with the Russian Federation as was the case two years ago.

Last year we made important steps towards creating a level playing field for the business entities in Belarus and Russia.

In my opinion, in 2003 more attention needs to be given to addressing social issues in the context of our integration. We have agreed that our Union has been created and will develop in the interests both of the Russian and Belarusian peoples.

Some steps have to be taken to that end. The issue of addressing the social problems of Russians and Belarusians has been prepared today, and we will discuss the main areas of effort in the field of social policy.

I hope that the decisions that will emerge from this meeting of the Supreme State Council will significantly speed up the building of the Union State and enable us to produce concrete and tangible results.

I would like to give the floor to the President of the Russian Federation, who is by no means a guest in our country, let alone the Supreme State Council, the President of the great Russia, Vladimir Putin.

Vladimir Putin: Good afternoon.

Today we are to review some of the results of 2002 and, equally important, discuss the plans for the near term and identify priorities for the future.

Recently, we have had a lot of discussions on the further building of the Union State. But we have always shared the main principle: the course for the creation of the Union State is a strategic course for Russian-Belarusian interaction.

Last year, despite all the heated debates on political issues, we have managed to stay focused and to move forward on a whole range of key issues. First of all, work continued to harmonise national legislation, and work out common tariffs, tax and customs procedures. That is crucial for our integration strategy and for the formation of the common economic space.

I would like to confirm the figure cited by the President of Belarus. Russian-Belarusian trade has indeed increased to almost $10 billion, a record in recent years.

I think the result achieved in the field of trade is based on the decisions that we made in 2002: a switch to internal Russian prices of fuel, energy and railway tariffs. All this combined to produce significant economic results.

The plan of joint actions to introduce the single currency of the Union State is a little behind schedule. Work must be speeded up if this “package” is not to get stalled or collapse altogether. I hope that we will move forward more vigorously on that issue.

Successful progress towards a Union State is impossible without working out a common position on political issues. Particular responsibility is given to the joint commission for drafting the Constitutional Act. We have changed its composition to upgrade its level. Now the commission is headed by the Speakers of Parliaments of the two countries. It has been done on the initiative of President Lukashenko. The commission has held its first meeting and is to hold another shortly.

As we have just been saying with Mr Lukashenko, we very much hope that the commission will gather the necessary momentum to move forward on that key document.

I would like to draw your attention to another critical point. We have done much to enable Russian and Belarusian citizens to move freely, to enjoy equal rights to employment and social security, education and healthcare. And that constitutes one of our main achievements.

In my opinion, there are still some untapped resources. And these should be emphasised in developing the concept of the social development of the Union State.

And one more thing. I doubt that we can successfully solve our tasks if we do not make sure that payments to the budget of the Union State are made in a timely manner and in full. I am aware that there are some arguments as to how the money should be distributed in the budget. Despite all the arguments, the participants in that process manage to arrive at mutually acceptable decisions. The challenge is to ensure that all the parties in the process adhere to financial discipline and transfer money to the budget in full and in a timely manner.

In conclusion I would like to stress that we are entering a new and crucial stage in the building of the Union State. It calls for well calculated and effective decisions; only decisions that will really improve the quality of life of our citizens. And I entirely agree with Mr Lukashenko there. In fact, this is the whole point of our work.

Thank you for your attention.