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President of Russia Dmitry Medvedev: Good afternoon, colleagues, I am glad to see you all.

I have set up a series of meetings with the leaders of our political parties. Today it is A Just Russia’s turn. Not so long ago I met with the United Russia. Of course I will be meeting with other parties that are represented in Parliament, and with those that are not represented there. We have to listen to what they have to say. Do you agree?

Chairman of the party A Just Russia Sergei Mironov: Absolutely.

Dmitry Medvedev: The agenda for these meetings is open-ended, as we agreed last time. Naturally this fully applies to A Just Russia.

I want to say just a few words. I have just been looking at the statistics. Of course your party already looks very strong indeed with its more than 400,000 members according to the Ministry of Justice. This is our Parliament’s second largest opposition party. Members of A Just Russia are present in the legislative assemblies of more than half the constituent entities of the Russian Federation. This means that the party has already matured into a powerful political force. As a matter of fact you are going to illustrate this for me.

I think that we can discuss any topics of your choice. But I want to also thank you for your general support for the political changes that I proposed and that the supreme legislative bodies (I mean the Federal Assembly of our country) recently adopted as a package. Now virtually all of the decisions we made are beginning take effect. Some of them may be more radical, some less, but in any event they are focused on improving our political system. Once again, I would like to thank you for this.

On the other hand you have your own views, which is good. You don’t support all the initiatives launched by the executive branch or even by the President. This is normal. In particular, you have your own opinions on the current economic crisis and how best to respond to it and on the state’s social policies. I enjoyed watching on TV the debates in which A Just Russia participated, and I should admit you did well in these debates as you looked at least as good as the other parties and sometimes perhaps even better. We can all learn from each other.

***

I would like to talk about the issue of lowering the election threshold for the State Duma. The instatement of this threshold was pragmatic and based on the maturity of our political system. During a certain time in our history, we felt that the best way to form the backbone of our political system would be to give our political and parliamentary parties the opportunity to grow. That is why we set a fairly high election threshold. This does not mean that these limits should remain the same forever. Furthermore, the threshold can change, although when it will change is a separate issue. We can discuss it, but in any event, the threshold need not be permanent, as it is not one of the fundamental principles of our country’s system of government. It is not written into the Constitution in an immutable way. So this topic is open to discussion, and I feel that in the right kind of setting, we can certainly consider decreasing this threshold, especially since our last election demonstrated that it is not that easy to win even three percent of the vote. As I said, these are pragmatic matters, and we can certainly re-evaluate them.

However, the idea of eliminating all thresholds for the creation of a political party is a much more complicated issue. If we are referring to parties being elected to the State Duma, then I agree with you, it depends on our country’s state of affairs and the maturity of our political system and parties. As far as the political parties themselves are concerned, I suppose that we have some inconsistencies and some clearly outdated rules, such as the registration procedures. Some things can stand to be revised, but others should remain. Why? Because we all remember the mishmash of political parties that we had at the beginning of the 1990s. God forbid that we allow those problems again, because when political parties are created instantly, at the drop of a hat, it breeds extremism, which can threaten to completely destabilise the political system in our nation. People will once again find themselves lost and unable to differentiate political parties from movements or how one party is different from another. That is why I believe that we need to have certain procedures in place. However, that does not mean that they must be completely rigid; they can be discussed. We have already gotten rid of some procedures, and we may rethink others in the future.

But I must agree that local government reform is a very important part of our national and political work, on the part of both the government and political parties, when their candidates are elected to local government positions, where they work and help to make some of the most important decisions. That is why we will continue to address this issue in the future.

***

Real estate taxes are also open for discussion. I think that we must be very careful not to create any new problems, especially now, as we go through a period of crisis, but we can still discuss this issue. Indeed, we can look into improving the legislation on taxing real estate based on its value, to ensure that the majority of our property- and real estate-owning citizens are not overly burdened. At the same time, expensive, non-essential luxury real estate should indeed fall into a different tax bracket. But once again, I want to emphasize that if we take on this issue, we must work exceedingly carefully, while remaining aware of the current economic situation.

There are several possible approaches. Some people feel that a crisis is the best time to make radical changes to the tax system. Perhaps this may be true, but anyone who thinks so should first try running the state and government themselves, to see how difficult it is.

***

It is good that you are engaging in international work. First, this shows our country in a certain light and helps the growth of your political party. It is clear that any party belonging to Socialist International is an influential force, and our government would like for our political parties to be present in various international associations or unions to voice our positions. Within our country, we can debate various issues, disagree, and try to convince one another that we are right. But when it comes to asserting the interests of the Russian Federation abroad, all of our political parties usually come together and hold a unified or very similar position. That is very important, because it is an indication of our political development and the development of democracy in our country; in previous, more turbulent times, it was very sad to watch the different political parties on their trips abroad, where they essentially became the voice of the Ministry of Foreign Affairs or foreign services. It is very clear that when we are abroad, we must act together, although naturally, we can disagree as much as we want and take any positions when we are at home.

As for the [new] agreement on European security, this was indeed Russia’s idea. I first came up with it almost a year ago. It is not going very smoothly, but at the same time, it is an idea that is almost impossible to disagree with, because without a full-fledged, large-scale agreement, Europe cannot move forward, because it is divided into factions and coalitions. Some countries are NATO members and others are not, and most likely never will be. We have the OSCE, which is a kind of unifying platform, but it does not really address security issues. There is the European Union, which resolves its own problems; there is also the CIS, and the Collective Security Treaty Organization. All these different groups address European security, but security must be indivisible. That is precisely why on some level, the idea of the European Security Treaty cannot simply be rejected. Naturally, our European colleagues are trying to scrutinise it – they are asking what it is about and what areas it does not apply to, which is normal. We are open to discussion. Indeed, I presented this idea in Finland, and in other places. But overall, I feel that this is a good idea and that we must promote it in various ways, on both a government level and party level; it is great if this is something you are working on.

The same also applies to our concerns – you mentioned the missile defence system. Indeed, this was not, to put it lightly, the best idea promoted by the previous U.S. administration. And despite the fact that it was unofficial, it was dragged forward, bypassing NATO institutions, not to mention the European Union. It is good that ultimately, many world leaders have mixed feelings about this project; the Czech republic, at least, is currently bringing this issue up in parliament. The decisions being made demonstrate that people are concerned. Concerned about what? About the fact that this deployment of radars and anti-missile systems is not actually making anyone more secure, but instead, creates new causes for tension.

We have stated our position on multiple occasions, and I can state it again here. We are suggesting a different approach: we must move toward creating a comprehensive defence system. And there are ways to do this, including through the use of facilities that already exist in the Russian Federation and in many other states that we are on friendly terms with. We suggested this, but they were not interested. So now, we will see how events will unfold. In any case, I am happy because at the very least, our American partners are now expressing a desire to discuss this issue; they are not taking an obtuse position where they state that they will build these defence systems regardless of what anyone else thinks. Now, at least, we will have the opportunity to discuss it.

I feel that your parliamentary contacts with other CIS countries are also helpful, including your contacts with Ukraine. Why? Because we have friendly relations with this nation, and we must develop our contacts in various ways, including through parliamentary contacts. If you are working on this, then I wish you success.

***

Parties certainly have the right to agree or disagree with the Government’s strategy. I say again that this is absolutely normal, and not just normal, but a good thing. Your proposals clearly encompass a whole range of the measures currently being carried out by the Government, because a lot of the measures we are implementing are being implemented all around the world right now, as there is simply no other option. At the same time, you also propose some new ideas, and this is a good thing. You spoke about lowering taxes, and even about emergency tax cuts. In principle, this is a very popular idea. If you recall, we have been discussing the question of lowering the value-added tax rate for some time now, though so far without result. Everyone seems to agree that we do need to move in this direction, but there always seem to be obstacles in the way. Whatever the civil servants say, lowering VAT is still on the agenda, and that is for certain.

At the same time, we have to examine our revenue base, of course. Before speaking today, I already said that it is a fine thing to make recommendations, but it is much harder to actually carry them out in practice, because budget revenue is shrinking at the moment, and quite significantly too, and this is the reality we have to deal with. In this situation, any mistake could cost us dearly indeed. No analysts, no matter what they say, have a full understanding of what will happen if we reduce this or that tax, because this is in many cases a process involving a whole chain of components, including tax management itself, the need to rapidly organise work in different places, the moral crisis in the country, and the current economic situation. All of this ultimately affects tax collection. I am not saying that we should renounce these tax-cut proposals. It is more a question of choosing the best moment to carry them out.

As for a number of other ideas mentioned, the proposal to reduce the tax burden on small businesses, for example, we can at least continue discussing them now, all the more so as the Government has taken some steps in this direction. Of course, you might say that these steps are insufficient, because we always want more radical action. But nevertheless, there has been some progress, including on tax incentives for innovative businesses too, which is also one of the ideas you proposed.

There are some issues that you were absolutely right to bring up. You spoke of the need to abandon direct state support of the stock market, and this was done – the stock market no longer receives direct state support.

You hit the nail on the head in this respect, because, frankly speaking, direct state support of the stock market has yielded no results. Experience all around the world has proven this to be the case. Unfortunately, even large injections of funds into the stock markets of this or that country have not had any impact, and here too they did not change anything. The stock market develops according to its own laws.

We are seeing some decent growth now, but this does not mean that we can already speak of a steady upward trend on the market. This is not yet the case. We will have to follow these trends and see which comes out on top. But whatever the case, some of your ideas have already been implemented in practice.

You also mentioned a number of robust measures, including establishing control over big deals and fortunes, and a progressive income tax scale. It is probably to be expected that you should propose such ideas, because you would not have bothered to define yourselves as a socialist party if you were not prepared to stand up for these kinds of ideas. If you do not argue their cause, then who will? This is a question of choice. I think that we made the right decision in introducing the flat-rate income tax. By doing so, we succeeded in bringing a lot of revenue into the open and thereby improved tax collection. People started paying their taxes. This does not mean that we should keep this flat tax forever, but it remains a useful instrument for now, though it is certainly worth continuing discussions on the issue.

You are right in that practically all countries are making big efforts now to put an end to all sorts of tax havens. The G20 summit approved a consolidated decision on countries that do not cooperate on taxation issues – so called non-cooperating jurisdictions. This decision takes a tough stance. For the first time, the international community, the biggest economies, have spoken out firmly against these sorts of special jurisdictions and the special legal regimes in force there. I hope that we will see further steps in this direction.

You raised a number of other matters too. It is good to see that your party supports the declaration of [civil servants’] incomes. I can inform you that I will soon sign executive orders making it a legal requirement for all civil servants to declare their incomes – those who declared their incomes this year, those who did not, and those who did not make their declarations public. This is one of the steps we agreed to carry out as part of the anti-corruption campaign.

On the idea of an ‘electronic parliament’, and on-line resources in general, I view such things very positively indeed, and I think that this is the way of the future. I was surprised by a few figures I saw recently, and you might be interested to hear them too: European analysts estimate that Europeans aged 18–41 get their news more from the internet than from television, and make use of on-line services. What surprised me was that this is not just the 18–20 age group, say, or even people up to 25 or 30 years old, say, but people right up to 41. This trend is clearly on the rise. These forecasts predict that by 2010, people will get more news overall from the internet than from television. We need to reflect on this, and we also need to respond by creating our own services for our people, giving them access to information, online transactions, make it possible to file applications, and make contact with government bodies and officials, with local government officials. The idea of an electronic parliament therefore seems to me very reasonable indeed, but it needs to have real content, of course.