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Vladimir Putin: Good afternoon.

I am happy to welcome you at this traditional meeting at the Kremlin. Fourteen days ago, I announced the dismissal of the Government of the Russian Federation. I would like to remind you that this was done to present the new Prime Minister to Parliament and the entire country before the presidential elections on March 14, and to at last end the work on the new structure, and as far as possible to complete formation of the line-up of the new Cabinet of Ministers.

At the same time, it was expected that reorganisation of the supreme executive body of power should be carried out effectively (I would like to remind you that this was prepared within the framework of administrative reform for almost two years), but at the same quite quickly, without significant losses for the actual process of administration.

At today's meeting, we are completing what was planned two weeks ago. The result of this work has been a new, more compact Government with one deputy prime minister and almost half the number of ministers. There used to be 30 ministers, including the Prime Minister, and now there are 17.

The new structure will consolidate the ministries and make them stronger. But the essential aim is not a mechanical amalgamation of departments, but in avoiding double-ups, to logically combine previously disconnected and isolated functions, to make new ministries more effective and influential, and give them more boost and independence. I want to pay particular attention to this last matter.

The number of intermediary stages in making administrative decisions has been significantly reduced. The role of the government is also changing, which should transform from a parallel shadow government into an effective and modern instrument of administration. But all this is being done, and I want to make this especially clear not so that we who have gathered in this hall become puffed up with our own importance, but to significantly increase the personal responsibility of every minister appointed today for the area of work that he is given.

I see the members of the Government appointed today as a team which, if I win in the presidential elections on March14, will take on full responsibility outlined in the Constitution concerning the Government of the Russia Federation. We know that according to the Fundamental Law, after March 14, the procedure of resignation must be gone through. However, for the current Cabinet of Ministers, this will be a purely formal act. I expect that we will save our country from the lengthy and harmful period, seemingly inevitable after the presidential elections, of rearranging bureaucratic positions and sharing out ministerial portfolios.

It is this team that after the presidential elections will immediately and definitively carry on the job of further strengthening our country and improving the living standard of our citizens. And I ask you to commence work now. Under the leadership of the Prime Minister, I ask you to complete the necessary structural changes and immediately begin implementing the plans that have been announced.

Mr Fradkov, please begin.

Mikhail Fradkov: Thank you, Mr Putin. We chose our candidates in accordance with the organisation structure that isbeing confirmed. I would like to emphasise that candidates were selected based on their professionalism, their personal qualities, work experience and how charged up they are for taking action. Of course, the proposed new organisation structure was also taken into account, its specifics, so that the candidates for ministerial posts would be up to the job and would feel the personal responsibility that you spoke about.

If you will allow, I would now like to present the candidates who will form the new Russian Government.

We propose that Alexander Zhukov take the post of the only Deputy Prime Minister. Mr Zhukov is well known in the country. He has the positive qualities that we think will enable him to begin work immediately and start taking decisive and carefully thought-out action, as is in keeping with his character and his experience.

We propose that German Gref take the post of Economic Development and Trade Minister. This is an important ministry and it is the cornerstone of the economic policy pursued in our country. We propose merging a number of services, in particular the customs and tariffs agencies, as well as the Federal Property Management Agency and the Land Cadastre with this ministry. In other words, this ministry will increase its functions. I firmly believe, however, that everything concerning federal property should be made this ministry’s responsibility, and the laws that currently make this impossible should be changed. I am now preparing proposals on this matter for the State Duma and I would ask you to support the idea of merging these functions, at the very least, in a single state agency at this stage.

Vladimir Putin: You propose merging the Russian Federal Property Fund and the Federal Property Management Agency?

Mikhail Fradkov: That’s right, the Russian Federal Property Fund and the Federal Property Management Agency.

We propose giving the post of Health and Social Development Minister to Mikhail Zurabov. With regard to this ministry, we are taking a decisive step to place someone at the head of the ministry and give it the reinforcement it needs to implement and develop social policy that will care for both people’s health needs and social needs. We must make every effort to ensure a decent life for our people. Mr Zurabov is an experienced and energetic person, who headed the Pension Fund and was First Deputy Health Minister. Here we plan to unite in one ministry both health issues and social issues – labour and employment. This is a complex and very work-intensive ministry, and we must ensure that all its functions remain within the Government’s sight. For this reason, we propose giving the deputy ministerial posts to well-known people in the country, and in particular, we propose that Galina Karelova take responsibility for the social development side of the ministry. She was Deputy Prime Minister in the last Government and was responsible for social issues. She has proven herself to be a consistent director who cares about the population’s needs. We also propose Vladimir Starodubov, formerly Health Minister, who has been actively involved in health reform lately as part of the work undertaken by the Presidential Executive Office. With such competent people in charge of the ministry we can expect that this area of work will be a real priority for the Government.

We propose Sergei Ivanov as Defence Minister. He is known to everyone and so I think there is no need to say more.

We propose Dmitry Kozak as Chief of the Government Office, federal minister and member of the Government. At a time when the Government is being seriously reformed and there is now only one Deputy Prime Minister, this means a great increase in the work and responsibilities of the Chief of the Government Office. I am grateful to the Presidential Executive Office for delegating Mr Kozak to us from his post as First Deputy Chief of Staff of the Presidential Executive Office, because he has experience and shows determination in getting issues resolved, and he has already worked in the Government and is very familiar with it. In other words, we place a lot of importance on Mr Kozak’s personal efforts and knowledge.

Vladimir Putin: But the most important thing is that he is one of the authors of the reorganisation plan for the Government.

Mikhail Fradkov: Yes, he is one of the authors, and we will work together to implement this plan.

I do not think there is any need to introduce Alexei Gordeyev. The only thing I want to point out is that the ministry he will head now covers two formerly separate areas – agriculture and fisheries. They will now form a single ministry. It remains to increase the attention we give to agriculture, and this was made clear also during the discussions in the State Duma on approving the candidacy for Prime Minister.

We propose Alexei Kudrin as Finance Minister. I think there is no need to introduce him. He will have serious issues to work on. In particular, we plan to examine ways of improving the tax system. I think that Mr Kudrin will take a very active part in the new Government’s work.

We propose Sergei Lavrov as Foreign Minister. Mr Lavrov is highly qualified and was, until recently, Russia’s representative at the United Nations. He is very familiar with the government’s work from his previous job in the Foreign Ministry. He was also particularly recommended by the previous Foreign Minister, Igor Ivanov.

It is proposed that Rashid Nurgaliyev take the post of Internal Affairs Minister. Mr Nurgaliyev is a very responsible and highly qualified professional. He was acting Internal Affairs Minister over the last few months. We think that the pace at which work is going ahead and the potential we see allow us to say that the ministry will be in reliable hands.

We propose Yury Trutnev, currently Governor of the Perm Region, as Natural Resources Minister. He is an experienced and energetic person with an interest in this area and direct experience of working in land resources. We think it important to put natural resources use, with all its specificities, into the hands of someone we can count on.

Until recently, Andrei Fursenko was acting Science and Technology Minister. He is a scholar with initiative and ideas, and we propose him as Education and Science Minister. We need to give a boost to science and innovation and we need to raise the quality of education. In other words, we need to make our people more competitive and boost the real sector of our economy. I think that Mr Fursenko is the man for the job.

There is no need to introduce Viktor Khristenko. Given his knowledge and experience, we propose that Mr Khristenko head the Industry and Energy Ministry. This ministry carries a lot of responsibility and will cover industry, including the defence industry, the energy sector, including nuclear energy, construction and the housing and utilities sector. Here the task is clear – to focus more on the real sector of the economy. Mr Khristenko is experienced and is an economist, and I think that through common effort in the Government to coordinate this ministry’s work, we will achieve good results in the real sector. This is what we are counting on.

The Nuclear Power Agency is to become a part of this ministry, but given that it also includes the military nuclear defence complex, I would ask that, seeing as this is a very specific area, this section of the agency should come directly under the Defence Ministry’s competence.

We propose that Yury Chaika continue working as Justice Minister. There is more than enough work in this ministry. Consistent efforts are required here to step up work to create the legislative foundation for continued reform.

We propose that Sergei Shoigu remain Emergency Situations Minister. He is well known throughout the country.

We propose Igor Levitin as Transport Minister. He is not yet well known to the general public, but we hope that he will show the best of his qualities as he did while serving in the Soviet Army and then going into business ten years ago and achieving visible results. I think that his experience as an officer and a businessman will enable him to take a fresh look at our infrastructure sector and get it moving forward.

Our proposed Culture and Information Minister, Alexander Sokolov, the rector of the Moscow State Conservatory, is away today on a business trip. He represents Russia’s cultural potential and at the same time is an energetic manager, and we think that this is just what is needed in this area today.

Given that this ministry will cover two distinct areas, we propose naming well-known and authoritative specialists to serve as deputy ministers.

In conclusion I would like to add that there are also two agencies – the Anti-Monopoly Service and the Financial Markets Service, which clearly have an inter-ministerial nature and essentially act as macro-economic regulators. Given the importance of the issues they deal with and the need to raise the administrative significance of these areas, it is proposed that they answer directly to the Prime Minister. I ask for your agreement on this point. Thank you.

Vladimir Putin: Thank you. The Prime Minister has presented you as candidates for these high state posts. I would like to inform you that just before our meeting began, I signed all the decrees regarding your appointment. I also signed a decree appointing the new Secretary of the Security Council. This post goes to Igor Ivanov, the former Foreign Minister.

My congratulations to you all.