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President Vladimir Putin: Good Day. We will begin with discussing how work is progressing in Beslan. The health minister [Mikhail Zurabov] has been there. I know that top-priority measures are being taken. I thank that it was a correct decision that the funds that go to Northern Ossetia to support the victims will be transferred to individual people, to their accounts. We just need to make sure that there are no violations here. Please, Mikhail Yur’evich, could you tell us your assessment of the situation there in Beslan. And what else do you think we should do to support the victims?

Mikhail Zurabov: Vladimir Vladimirovich, at your order work is underway in four main areas. This is above all the organisation of providing medical aid. There are still 311 people in hospital, but there is a clear positive dynamic. Of the total number of people currently in medical institutions, doctors only diagnose three of them are diagnosed with an extremely serious condition. The others have had a noticeable improvement in their state of health.

During my last visit to Beslan, a group of barotraumas specialists and a group of specialist surgeons were sent there. After an inspection, it was decided to send another 37 people to medical institutions in Moscow over the next two days, nine adults and the rest children. As I already said, they mainly have skeletal traumas and barotraumas. The state of health of these casualties does not cause any alarm among doctors. It is simply necessary to provide specialized medical aid in Moscow.

The second area is organizing a holiday for the victims. The first group was sent on Friday. Yesterday a second group was sent. They are all being sent to resorts on the Black Sea coast. A total of 262 people have already arrived there. A group of 139 people was sent yesterday, 69 of them children. And on 23 September we plan to send another group of 140 people. This organisation is going well, and we have no concerns that this task, as it set to us, will not be completed in the volumes that you determined. There are about 500 people that we have to send to sanatoriums for treatment by the end of the month.

The third area is paying compensations. According to the order that you gave us, we were supposed to send the first lists to the Finance Ministry by 20 September. Today is the 20th, and a list of 603 people was handed over to the Finance Ministry today. So we expect that after brief work at the Finance Ministry, funds for paying these compensations will reach the republic this week, and this payment will be carried out.

Furthermore, payment of compensations from the republic budget has already begun. Over 20 million has been paid to over 200 victims, as of Sunday. At the same time, funds are given to everyone who goes to sanatoriums for treatment, and this money comes partially from the federal budget. These funds were allotted by the Education Ministry: 5,000 rubles is given to each child who goes for treatment, for a month. This also provides financial support for those who travel for treatment.

The last task is to prepare a Governmental decree that determines the main objects which will be built or reconstructed on the territory of Beslan. A meeting has also been held in connection with this. Building sites have been assessed and selected. I think that these sites are promising, they allow us to solve the task that was determined – above all to build two schools, one of which will have a swimming pool; secondly, a medical centre of federal importance will be built, along with a social home for victims, accommodation for medical personnel, social workers and education workers, and a rehabilitation centre. This is all being connected to specific sites, and we think that this work will be completed in the time limits that have been set for us.

Vladimir Putin: Good. I would ask the Prime Minister [Mikhail Fradkov] to create an effective mechanism for controlling the implementation of all the measures planned on Northern Ossetia: this concerns specific aid for people, building the objects that were discussed, and developing the town infrastructure. We agreed that we would help Beslan to draw up a good general plan for town development, Muscovites have taken an active part in this, and they have essentially prepared their proposals, but this must take place under the control and with the help of the Government of the Russian Federation.

Mikhail Fradkov: We have already taken this under control, Vladimir Vladimirovich, and we will carry out constant inspection and monitoring.

Vladimir Putin: That’s agreed then. The budget process is continuing, which has started another stage in its development. Please, Finance Minister [Alexei Kudrin], tell us how this work is going?

Alexei Kudrin: Deputies have returned from their holiday, and tomorrow there will be a meeting of State Duma committees, and almost all the committees will be joined by specialists from the Government and from various ministries, including the Finance Ministry, where the draft budget will be examined. The budget marathon has begun, which should end on 29 September in its first reading. We will work particularly actively with all committees over the next 10 days.

Vladimir Putin: Are there any other issues that concern the Government and the Finance Ministry in the work that lies ahead for the deputies?

Alexei Kudrin: I can’t talk of any difficulties right now, I think that specific issues, comments and proposals from deputies will appear in the days to come, when we hold this work in committees.

Vladimir Putin: Good. And I would ask you, despite all the flexibility that is needed in working with parliament, to nevertheless proceed from the principal agreements that were reached in preliminary discussions. We must observe the main indicators, and keep everything positive that has been achieved in recent years. We must not change the budget, the main economic law of the country, for the demands of the moment. This must not be allowed under any circumstances. So we need to approach this work, of course, going from the demands of the specific situation, the plans of economy development, and the plans for improving tax legislation, but the main indicators must be observed.

I would now ask Sergei Borisovich Ivanov to say a few words about the training exercises in the army and the navy – I also mean the instructions that I gave after a few exercises of this kind, above all in the navy.

Sergei Ivanov: This September, we have held, are holding and will continue to hold several very serious naval exercises until the end of the month. If you will allow me, I will report on each naval fleet. The Pacific Ocean fleet…

Vladimir Putin: One moment, Sergei Borisovich, let’s start by discussing the firing of intercontinental ballistic missiles.

Sergei Ivanov: After the unsuccessful missile launches in February this year, as you know, the General Staff and the Defence Ministry prepared a plan that was reported to you, and on 8 September this year, the two strategic atomic submarines from the Northern fleet “Yekaterinburg” and “Borisoglebsk” held two launches of these missiles. These are missiles of a different class, but they are both intercontinental missiles with detachable warheads, with three detachable warheads in each one. All six warheads reached our testing ground in Kamchatka, Kura testing ground, in the allocated time. We are planning a series of launches soon, a plan has already been drawn up – I have reported this to you – and also, several of our atomic nuclear submarines are now on military alert. This accounts for the submarine fleet.

Now for the surface fleet. In the Pacific Ocean, as I was saying, training with the Japanese navy was completed in mid September. It was held in East China Sea and Sea of Japan, and the training involved providing assistance to a vessel in distress and cooperation between the fleets using helicopters from naval aviation.

Now for the Baltic fleet. In two days, a group of ships returns home to Kaliningrad – the “Neustrashimy” and the “Kaliningrad”, which were on military watch in the eastern part of the Atlantic Ocean and the western part of the Mediterranean. They also visited the ports of France, Spain and Portugal and are currently passing through the Straits of Denmark, and will return to Kaliningrad the day after tomorrow.

Now for the Black Sea fleet. Russian-Italian training exercises ended on 16 September, which you agreed on with Prime Minister Berlusconi. They were held in the Ionic Sea and based in the Italian naval part in Taranto. These exercises had a strong anti-terrorist nature. Our ships, headed by the Moscow battle cruiser, captured a vessel and inspected it, with forces from our naval infantry from the large landing ship Azov. Furthermore, real artillery firing was conducted from anti-aircraft defence ships. The control of firing and determination of targets was conducted from our cruiser Moscow, and the naval aviation of the United States, which is also based there, took part. Since these exercises were completed on 16 September, our ships have been visiting the ports of Malta, Montenegro and Greece, and will return to Sevastopol.

Immediately after this, at the beginning of October, our watch vessels Neustrashimy and Pytlivy will begin patrolling the east of the Mediterranean, where as part of the NATO programme “Active efforts” they will patrol this area for three months, with an equipment and financial base in Syria at the port of Tartus.

Now for the Black Sea fleet. Tomorrow in the Atlantic, about 200 miles to the west of Ireland, Russian-French naval exercises will end. Our atomic submarine Vepr and the large anti-submarine vessel Admiral Chebonenko are taking part, along with forces from the French side. There will be cooperation and communications between surface and submarine atomic vessels, and after this our vessel will make a visit to a foreign port in the first time in the fleet’s history. This has never happened before. And it is not just any foreign port, it is the port of Brest where the French nuclear forces are based.

In accordance with your agreement with the President of the United States of America, George W. Bush, Russian-American naval exercises begin on 30 September in the Norwegian Sea. They will last for a week. There will also be firing of missiles. The Americans will provide a cruiser with guided missiles, and we will provide the large anti-submarine vessels Admiral Levchenko and Severomorsk.

And finally, tomorrow our ships from the North fleet headed by the aviation cruiser Admiral Kuznetsov, the heavy atomic cruiser Peter the Great, submarines, auxiliary vessels and rescue boats will unite. They are going to the North Atlantic for military exercises, including flights by deck aviation. It is proposed that these exercises will last for two weeks. Ten teams on Su-33 helicopters have already been prepared, they will make flights. We have an agreement with the governments of Spain and Norway for these helicopters to land in these countries if necessary. The group returns at the beginning of October.

As for the number of events and intensiveness of military exercises, I would like to inform you that over the last month around 40 submarines, surface ships and auxiliary ships boats have been on constant alert – they have carried out trips to 15 seas, and this training approaches Soviet levels in its intensives.

Vladimir Putin: I would ask you to present me with a report on how work is proceeding on equipping the army and navy with new systems of armaments, and how our plans are proceeding in re-equipping our army and navy – not for export, but for us – and how these plans are organized for several years in advance. It is important for schedules to be observed for financing and specific work.