Statements of Deputy Head of the Government of the Russian Federation – Finance Minister of the Russian Federation A. Kudrin at the St.Petersburg International Economica Forum
Kudrin vows Belarus will get EurAsEC anti-crisis loan tranche
ST. PETERSBURG. June 18 (Interfax) - Russian Finance Minister Alexei Kudrin on Saturday excluded the possibility of Belarus being denied the first tranche of a planned loan from the Anti-Crisis Fund of the Eurasian Economic Community (EurAsEC).
"Preparations are underway to release the first tranche," Kudrin told reporters.
He answered in the negative when asked whether the tranche might be refused to Belarus because of the latter's restrictions on imports from Russia. He added that limiting imports from Russia runs against the Customs Union rules but is not in breach of the Anti-Crisis Fund loan terms.
Earlier, a Russian deputy economics minister suggested revising the loan deal.
"You can't take loans with one hand and strike at our economic interests with the other. I won't venture talking about what measures should be taken in response, but when we are talking about future tranches of the loan to Belarus, we should take a comprehensive view of all these relations," Andrei Slepnyov said.
"It can't be ruled out," Kudrin said in speaking to reporters on Saturday, "that we will raise this issue if it restricts trade with Russia. At the moment this is not a condition. If necessary, we will put a proposal to that effect before the Anti-Crisis Fund."
Kudrin said that, before the loan is released, the Belarusian Justice Ministry is to confirm that the loan agreement is in tune with Belarusian legislation and Belarusian President Alexander Lukashenko is to issue a decree to set up a development bank, which would take over control of non-core assets from the central bank.
The Anti-Crisis Fund on June 4 approved a $3-billion loan to Belarus, to be released in tranches over the next three years. The first tranche is to be released in June, Kudrin said earlier.
Russia's Kudrin: In World's Interest To Solve Euro Crisis
ST. PETERSBURG (Dow Jones)--Russian Finance Minister Alexei Kudrin said Friday he has no qualms about letting the country's two sovereign wealth funds invest in Spanish government debt, but said the decision wasn't his to make.
"From the ministry's point of view, we have no objection to buying Spanish debt," Kudrin told Dow Jones Newswires on the sidelines of an investment conference. "But management of the portfolio is the responsibility of the Central Bank of Russia."
Kudrin's comments came after a lengthy meeting with Spanish Finance Minister Elena Salgado, who told Dow Jones that the two reviewed "all the economic policies of Russia and, of course, of Spain."
Kudrin appeared to hint that Spain has asked Russia to buy its bonds to ease pressure on Spanish debt from the deteriorating situation in Greece. Long-term Spanish bond yields Thursday touched their highest level since the country adopted the euro in 1999, mainly on fears that Europe's debt crisis could spiral out of control.
Talking separately to Dow Jones, Salgado dismissed any comparison between Spain and Greece, pointing to the former's far lower public debt burden ratio and its greater willingness to embrace structural reforms, specifically of its labor market.
She also stressed that the price for Spanish debt is still much closer to that in Italy--perceived as a relatively sound member of the euro zone--than in Greece, Ireland or Portugal, all of which have taken help from the EU and International Monetary Fund.
With EU and IMF aid subject to politically unacceptable conditions, selective and discretionary investments from some of the world's largest holders of official reserves represent a potentially attractive way of keeping skeptical financial markets at bay.
Russia, for its part, has a clear interest in avoiding a full-blown debt crisis in Europe that would depress demand for oil and gas, its two main exports. After years of successive increases in social spending, Kudrin said earlier Friday that the country needs an average oil price of $115 a barrel to balance its budget. At a separate panel, Kudrin said he had requested a meeting with President Dmitry Medvedev to review a decision to raise defense spending this year and next, fearing that excessive spending could fuel inflation, expected to be between 7% and 8% this year.
"It is in all the world's interest" that Europe should find a way out of its debt crisis, but it's "a very, very difficult" question to ask certain countries to fund other nations' debts, he said.
Russia is contributing through the IMF to the rescue packages for Greece, Ireland and Portugal, but has little influence over IMF policy. Together with China, Brazil and others, it is pressing for a greater role for emerging countries.
At the end of May, Russia's National Welfare Fund had assets of $92.54 billion, while its Reserve Fund had another $26.54 billion. Deputy Central Bank governor Alexey Ulyukayev told reporters the central bank itself doesn't hold any Spanish debt in its official reserves, which total over $521 billion.
Spanish Prime Minister Jose Luis Rodriguez Zapatero is due to appear at the same conference later alongside Russian President Dmitry Medvedev.
President Hu Jintao of China is also attending, along with an array of senior Chinese economic and financial officials. Zapatero's visit thus may bring him together with the presidents of two countries theoretically in a position to help Spain overcome the recent wave of bond market pessimism.
Kudrin recommends saving in rubles for up to 2 years, diversifying savings for longer period
ST. PETERSBURG. June 18 (Interfax) - Russian Deputy Prime Minister and Finance Minister Alexei Kudrin has recommended keeping savings in rubles if one plans to use the money within two years and diversifying savings if they are meant to be kept longer.
"The ruble has good chances in the short term, but if we talk about a longer period, like three or four years, it is better to diversify [savings], which I have always said to everyone, and my recommendations remain the same," Kudrin said in an interview to Russia Today television.
"Dollars, euros, rubles - in equal parts if you want to save longer than two years, because the market kind of balances all currencies in relation to each other. If the euro goes down against the dollar or the dollar goes down against the euro, they kind of make up for each other. That is, if you want [to keep] for a longer period of time, you should invest in three currencies," he said.
Kudrin said he was sure that "everything will be okay" with the ruble in the coming years.
He pointed out that President Dmitry Medvedev had said in his speech at the St. Petersburg Economic Forum's opening ceremony about the need "to preserve macroeconomic stability, reduce inflation, and reduce interest rates on loans."
"The word macro-stability or macroeconomic stability implies that our wages will not be devalued, that it would be advantageous to save money in rubles at banks, and this means a new resource for banks and a new resource for investments in modernization," he said.
"If we manage to reduce inflation to 5% within the next two years, this means that mortgage rates will be not higher than 8%, or possibly even lower for good borrowers," Kudrin said.
Inflation in Russia could be within 7% in 2011, which is quite high compared to some other countries, Kudrin said. "It should be five, four [percent], or lower," he said.
Russia's Kudrin: Sees Overheating, Risk Of Hard Landing In China
ST. PETERSBURG (Dow Jones)--Russia's plans to increase its defense spending sharply pose an acute budgetary dilemma for the country, finance minister Alexei Kudrin said Friday.
Speaking on a panel at an investment conference, Kudrin said that as a result of the plans, Russia's budget will only balance this year if the price of the Urals blend of crude oil averages $115 a barrel.
"We can't increase our dependency on oil," said Kudrin, saying this would pose acute risks of inflation in the medium term.
He said he had requested an interview with President Dmitry Medvedev to discuss the planned increase in spending, which is largely the brainchild of Prime Minister Vladimir Putin, who has argued that Russia can't put off the modernization of its armed forces any longer.
Medvedev had himself made much the same point about oil dependency and loose fiscal policy in his keynote speech to the conference earlier Friday.
The International Monetary Fund said last week it expects the budget to be in deficit to the tune of around 1% of gross domestic product this year if the government doesn't change its policies.
Govt not focused enough on encouraging competition - Kudrin
ST.PETERSBURG. June 17 (Interfax) - The Russian government is not active enough in creating a competitive environment and in promoting the development of institutions in Russia, Deputy Prime Minister and Finance Minister Alexei Kudrin has acknowledged.
"If we talk about what the government lacks, but what is feasible, it is, in my opinion, due focus on the work to create a competitive environment and institutions," he said at a business lunch, organized by Sberbank at the St.Petersburg International Economic Forum.
An intensive discussion has been on in Russia for the past ten years of the need to cut state presence in the economy, he said. "A large share of our companies are either state-run or have a state stake. There are other forms of exerting influence on businesses through state levers. We have failed to depart from this practice to a due extent so far," Kudrin said.
"I am glad I can see Prokhorov here [Mikhail Prokhorov, a businessman and leader of the Right Cause party], who is defending the right-wing values. Exactly when we feel the impact from the right-wing flank, will more discussions spark up on opportunities to fight for competition," Kudrin said.
Belarus could get first $800 mln of anti-crisis loan in June - Kudrin
ST.PETERSBURG. June 16 (Interfax) - Belarus could get the first $800 million tranche of an anti-crisis loan as early as June, Russian Deputy Prime Minister Alexei Kudrin told reporters.
The EurAsEc Anti-crisis Fund on June 4 decided to issue a $3 billion credit to Belarus over five years on June 4.
"The first tranche of $800 million could be received right now, in June," Kudrin said.
Further tranches will depend on Belarus meeting certain economic stabilization targets, he said.
"Another tranche of $440 million might be received this year, in November-December time," Kudrin said.
The loan conditions include selling off state property in order to raise the funds to improve the balance of payments, and improving the state of the currency market. The National Bank's functions must be clarified to avoid excess money from being printed, and certain tax and budgetary measures must be implemented to reduce the budget deficit.
Kudrin said the terms for receiving credit would be published soon.
Russia's Kudrin: Spain Has Asked Russia To Buy Spanish Debt
ST. PETERSBURG, Russia (Dow Jones)--Spain has expressed desire for Russia to invest its foreign reserves in the country's debt, Russian Finance Minister Alexei Kudrin said Saturday.
"This issue wasn't discussed deliberately, but we've heard the expressed desire that Russia invests in Spanish debt," Kudrin said, adding that his ministry doesn't oppose it, but the final decision is up to the Central Bank of Russia and the brokers acting on its behalf.
He said that the decision on whether to buy the Spanish debt is not a political one.
"We don't place our reserves guided by political decisions, rather on precise criteria of liquidity and stability of an asset," he said.
Spanish Finance Minister Elena Salgado and her Russian counterpart convened for a lengthy meeting on the sidelines of an investment conference showcasing the Russian economy Friday, and Russia President Dmitri Medvedev had an hourlong meeting with Spanish Prime Minister Jose Luis Rodriguez Zapatero on Saturday.
The meetings fueled speculation that Spain would ask Russia to mobilize some of its vast foreign reserves to shore up Madrid's government bond market, which came under heavy pressure this week, with long-term yields hitting a 12-year high Thursday
Moscow may limit financial support to Minsk if Belarus restricts Russian media - Kudrin
ST. PETERSBURG. June 16 (Interfax) - If Belarus continues to limit the work of Russian journalists on its territory, Russia may limit its financial support to Belarus, said Russian Deputy Prime Minister and Finance Minister Alexei Kudrin.
"When we see the shrinking of publicity and disrespectful or unfriendly steps in relation to Russian media, we will unfortunately have to take this into account in extending regular loans. If such restrictive measures take place again within the coming months, we will certainly reserve the right to take measures to restrict financial support to Belarus," Kudrin told journalists on Thursday.
"The government of the Russian Federation is concerned about the Belarusian administration's measures toward curbing or restricting Russian media outlets," he said.
The Russian government cannot disregard such instances, he said.
Government won’t raise payroll taxes again says Kudrin
ST PETERSBURG, June 18 (RIA Novosti) The Russian government does not plan to increase payroll taxes for social non-budget funds after 2013, including pension funds, Finance Minister Alexei Kudrin said on Saturday.
President Dmitry Medvedev announced on Friday that the maximum rate for payroll taxes in Russia from 2012 would be reduced to 30 percent from the current 34 percent, and to just 20 percent for small businesses working in manufacturing and social sectors. The cut was essential at this “crossroads period,” he said, at the St Petersburg Economic Forum.
“We will prepare a more systematic proposal at this time (2012-13),” Kudrin said. “We are not suggesting subsequently increasing it to over 30 percent. We are going toward 30 percent, but maybe in a more defined formula for different rates,” he said.
The government will not increase other taxes to make up for the loss of revenue from the cut in payroll taxes, Kudrin said.
“Among the scenarios that were suggested, was raising taxes. An increase in profit tax was among the variants considered. We have rejected that variant,” Kudrin said.
The head of Russian small business lobby Opora, Sergei Borisov, said he hoped the 20 percent payroll tax rate would be extended to all small businesses.
“We expected a bit more, but it’s not night yet,” he said on the sidelines of the forum.