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Vladimir Putin: Good afternoon,

We have a very important issue to discuss today. Tomorrow we will have to discuss it in a broader format. And as has become our tradition, before discussing serious problems at the State Council we first discuss them in a tentative way at the Presidium.

Delimitation of powers is not just an administrative issue. It is connected with economic activities and our fulfillment of social obligations to the people. Of course it is very important to take into account the interests of all the levels of government. It is important that all the participants in that discussion engage in a substantive and constructive dialogue so as to reach solutions that are well-grounded and that the country needs.

Let me identify just several key problems.

First. We must complete the delimitation of the powers between the centre and the regions. That goes without saying, and we have spoken about it frequently. We must strictly adhere to the principle of balanced expenditure commitments and revenue-raising powers. The tasks and functions of every level of government must exactly match their financial, tax and other capacities. That principle must be based on an adequate legal framework.

A balance between powers and resources must be strictly observed in the budgetary process and in the new social policy. That will provide the basis for our projects in the sphere of education, healthcare, and the development of the mass housing market.

Second. Obviously, some powers of the Russian Federation under Article 72 of the Constitution would best be exercised if they are delegated to the regions and municipalities. We have spoken about this more than once, and I know the examples that have been cited and I agree with this approach. We should exercise this approach proceeding from the federative principles in our Constitution. We should not hesitate to take such steps.

I would like to stress that it should be done proceeding from a single legal basis and with due account of whether the regions and municipalities are ready to assume such responsibilities. And of course the Federation should provide them with the necessary resources to perform these functions. The Federation – and I agree with the Government there – must reserve the right to monitor how the federal functions it has delegated are performed. The number of regional branches of the federal bodies should be brought to a minimum. The strengthening of federated relations must stimulate a downsizing of the Government.

Third. In the course of the administrative reform at the federal level, a number of government functions were recognised as superfluous and overlapping. As I said in my address, recreation or preservation of such functions at the regional and municipal levels should be prevented. We should not allow such a revision of the Government’s decision. And I urge all of you to strictly follow this approach. Any attempts to retain administrative barriers must be monitored and stopped.

And the last point. We should rule out any lapses of continuity in the performance of government functions during the process of their transfer to a different level of government or administrative reorganisation.

Let me stress again that all of our initiatives in the development sphere of state and local self-government have one aim: to substantially improve the quality of public services the Government delivers to its citizens. The citizens in all regions must feel that the Government has become closer and more responsive to their needs; that it is working more effectively. That is the main purpose of all these reforms.

I would like to end my remarks there and I give the floor to our colleague from the Vladimir Region.