Direct line with Vladimir Putin
Putin annual Q&A session 2015
Video and Transcript
During the live broadcast that lasted 3 hours and 57 minutes, the President
answered 74 questions out of the almost 3 million that were received.
Direct Line with Vladimir Putin was broadcast live on Channel One, Rossiya-1 and
Rossiya-24 TV channels, and Mayak, Vesti FM and Radio Rossii radio stations.
Posted April 16, 2015
Direct line programme
host Kirill Kleymenov: Good
afternoon. You are watching Direct Line with
President Vladimir Putin. Here in the studio
today are Maria Sittel and Kirill Kleymenov
Direct line programme
host Maria Sittel:
Good afternoon. Exactly a year has passed
since we last met in this studio. This has
been a year of serious trials for Russia:
the sanctions, the drop in oil prices
and the cold war atmosphere. This has been
a year for us to comprehend the great
tragedy that befell a fraternal people,
a year when our country faced many new
At the same time, our
society has become more consolidated.
The Russian people’s self-assessment has
grown. What is especially interesting is
that the level of happiness –
or the ‘happiness index’ as sociologists
call it – has not gone down as one could
So, today in this
studio we will discuss how we will respond
to those challenges and where we are
heading. We are live with Vladimir Putin.
Our colleagues Olga Ushakova, Valeria
Korableva, Dmitry Shchugorev and Yekaterina
Mironova will assist us during today’s
broadcast on Channel One and Rossiya TV
channels, while Tatyana Remizova and Natalya
Yuryeva are working in the call and SMS
processing centre. I would like to remind
you that you can also watch us live
on Rossiya-24 TV channel and hear us on Mayak,
Vesti FM and Radio Rossii radio stations.
We are live with
President Vladimir Putin.
Tatyana Remizova: Good
afternoon, colleagues! Hello, Mr President.
Our call centre has
been working for a week, and we will
continue to take calls during the Direct
Line broadcast. Our operators are getting
ready for a peak in your calls.
I would like to remind
you that you can call us at the toll-free
number 8 (800) 200–4040 or send text
messages to 04040. People from other
countries can call at the number you see
on the screen.
Over the past seven
days that our call centre has been
operating, we have received a record number
of calls. We have already received more
questions than by the end of the live
broadcast last year.
We now have a total
of 2.486 million messages, of which over 1.7
million are phone calls and over 400,000 are
Good afternoon. For the first time this
year, you can send your questions
to the President with photos and MMS
messages to 04040. A picture is worth
a thousand words and will be the best
illustration to your problem. Our operators
continue receiving your video messages that
can be sent using the website www.moskva-putinu.ru or the free
app on your smartphones and tablets. Just
as last year, we provide live interpretation
into sign language for people with impaired
hearing. We will be receiving your questions
throughout the live broadcast, so there is
still time to record and send in your
questions. Who knows, maybe the President
will answer yours.
Here in the studio we have people we
featured in our reports, people representing
all of Russia: doctors, teachers, farmers,
entrepreneurs, rescue workers and service
members. They all have questions
for the President.
Shall we begin?
Good afternoon, Mr President. This has been
a year when you had to take on a lot. You
might say this has been a year of personal
decisions for you. You had to make them
quickly and accurately, and nobody could do
it for you. This applies
to the counter-sanctions, the diplomatic
marathon in Minsk, and Crimea, of course.
The economic situation
is also complicated. Given the external
pressure, it also required your direct
personal decisions. What are the results
of the year? What have you managed to add
up, what has been brought down maybe?
This is a traditional question. I proceeded
from the idea that you would ask this
and this is something I would have
to mention in any case. So I made some notes
to make sure I do not invent things or get
confused in the numbers. Actually, a lot
of this has already been made public, but
some figures are new and I am happy to share
them with you and with the entire country.
You have already
mentioned some of the results. This is
the accession of Crimea and Sevastopol
and the complicated foreign economic
situation. Something we have said a lot
about, but is worth mentioning now again,
although it happened last year is our
victory in the 2014 Olympics, the successful
Sochi Winter Olympic Games. All this
happened last year.
I would also mention
the fact that we have come across certain
external limitations, which in one way
or another have had an impact on our growth
rates, on our development, though
on the whole we can now see that the ruble
is gaining strength and the stock markets
are on the rise. We have managed to avoid
Let us look at some
specific figures. By the end of last year,
Russia’s GDP has grown by 0.6 percent –
a small growth, but it is growth
nevertheless. Industrial production has gone
up slightly more – by 1.7 percent, while
the processing industry – by 2.1 percent. We
have set a new record in oil production –
525 million tons, which is the highest
in recent history. We also took
in the largest grain crop in recent
history – 105.3 million tons. Overall,
agriculture demonstrated very good results
with a 3.7 percent growth. We are also
observing growth in the first quarter
of this year, and this is good news.
There are positive
dynamics in a number of other industries
as well. Thus, the chemical industry has
grown by 4.1 percent, the production
of mineral fertilizers by 4.2, and so forth.
At the same time, as you have justly noted,
we do have some problems. The reduction
of capital investment from small businesses
was a negative signal. Thus, overall capital
investment last year went down by 2.5
At the same time,
housing construction has been doing very
well. Our construction workers can be proud
that they have also demonstrated record
achievements in the entire history
of the Russian state. Never before, neither
in Soviet nor in post-Soviet times, and not
in pre-Soviet either, I am sure, have we
built so much housing – around 81 or even 82
million square meters.
We also managed
to avoid a sharp hike in unemployment. It
did grow last year, from about 5.3–5.4
in the middle of last year to 5.8 now, but
we have managed to hold it back. I am
certain we will get back to this today.
Meanwhile, the results
of last year show an 11.4 percent growth
in consumer prices. There is nothing good
about this, of course, because this affects
people’s living standards. However, in March
the inflation rate has dropped.
The population’s disposable income has gone
down by 1 percent, while wages and salaries
grew by 1.3 percent. As you may know, we
have indexed pensions – both social and old
age ones. Meanwhile economic uncertainty has
led to a capital outflow. This is also
something we need to keep in mind, but if
there are questions about this, we can
discuss it in greater detail. I see nothing
the significant fluctuations
on the financial market, Russia’s banking
sector has demonstrated good dynamics.
The portfolio of loans to the real sector
of the economy has grown, and what is
especially good is that the overall assets
of Russian banks have grown to reach 77
trillion rubles and for the first time they
exceed the nation’s GDP. This is a very good
index, demonstrating the stability
and reliability of the Russian banking
I have to say that
both individuals and legal entities are now
returning the money they withdrew
or exchanged into hard currency at the end
of last year. Thus, citizens’ deposits grew
by 9.4 percent last year, while those
of economic entities – by 40.6 percent,
and they continue growing this year.
In January, citizens’ deposits have added
another 2.8 percent to reach over 19
trillion rubles, while those of organisations
grew by 5.1 percent to a total of over 26
Overall, if we move
on to budget issues, we concluded last year
with a slight deficit of 0.5 percent
and managed to prevent a spiralling into
a major deficit. In other words, there is
a deficit, and we envisaged a somewhat
greater one this year of 3.7 percent, but it
is quite reasonable.
One of the positive
outcomes of 2014 was undoubtedly
the positive demographics. The birth rate
has gone up against a drop in the death
rate. The average life span continues
growing and this speaks of an overall
positive tendency and public sentiment
These, briefly, are
the results of 2014 and the beginning
Mr President, the numbers you have provided
mainly deal with macroeconomics and they are
quite positive. However, if we consider
the viewpoint of an ordinary person
and judge by the questions we continue
receiving on this live broadcast,
the picture is not as rosy and there are
quite a few problems. Let us consider
the economy in detail, as this is the basis
I would like to begin
with a question that was brought about
by a recent publication. A participant
in your meeting with entrepreneurs said you
warned the businessmen at this meeting that
the sanctions would not be lifted soon; that
they should not expect this. First, let us
set the record straight – did you have this
conversation or not, and if you did, how do
you see the situation.
You did not listen to me attentively after
all; you were thinking of the question you
were going to ask and missed a few
of the things I mentioned. I spoke
of a number of positive developments,
including those on a macroeconomic level,
which are very important for further
development. However, I also said
the population’s incomes have gone down.
Salaries have grown a little, but
the overall incomes have dropped due
to inflation of about 11.4 percent.
I mentioned this as well.
As for sanctions, this
conversation with entrepreneurs did take
place, and I told them they should hardly
expect a lifting of the sanctions because
these are purely political matters,
and for some of our partners I believe they
have to do with their strategic interaction
with Russia and with hindering our
Actually, I do not
think this issue directly concerns Ukraine
any longer, because the current goal is
the implementation of the Minsk Agreements.
We are doing everything possible toward this
goal, but Kiev is taking its time, while
the sanctions have not been lifted.
The point at issue is
not the sanctions. What did I tell
the business people? I told them that
the issue is not limited to the sanctions,
that we must find better ways to manage
these processes at home, in our country
and economy. And that very much depends
on what we do.
We have talked about
prices and wages, but what is the reason? It
is clear that the reason is the pressure
on the ruble, its depreciation. In turn, it
is connected to oil prices. We know very
well that, unfortunately, our economic
development has been lop-sided for a long
time, and this will be very difficult
What have we been
doing for the past years? Wages were growing
at a priority pace, much faster than labour
efficiency. And the currency rate adjustment
was unavoidable – unavoidable – even
in the absence of the sanctions.
In fact, the sanctions
came in handy for the Government
and the Central Bank, which can now blame
the situation on the sanctions. But
the sanctions are not the only reason. We
must adjust our economic policy more
professionally, consistently and quickly. It
has now been adjusted.
Believe me, this is
a very important decision, and both
the markets and investors have responded
to it. It will help improve our economy
and create basic conditions for further
development. So the sanctions, which are
definitely contributing to our current
problems, and which we will possibly discuss
here if there are questions, the sanctions
are not our biggest problem.
But still, how long will all this last,
meaning the sanctions? As long as in Iran?
We know that Tehran has been living under
sanctions for several decades.
After all, Russia is not
Iran. Russia is bigger; its economy is
bigger and by the way much more diversified
than Iran’s. Moreover, our energy policy is
different from that of the Iranian
authorities, and this is for a number
of reasons, which I will not analyse
or asses here. After all, Russia’s energy
industry is much more market-based than
in a number of oil and gas producing
countries. So you cannot really compare
the two countries.
As for how long we
will have to endure the sanctions, I would
put the question differently. This should
not be about enduring anything – we must
benefit from the situation with
the sanctions to reach new development
frontiers. Otherwise, we probably would not
have done it. This goes for import
substitution policies, which we are now
forced to implement. We will move in this
direction, and I hope that these efforts
will foster the development of the high-tech
sectors of the economy with higher growth
rates than previously seen.
The Russian market was
too crowded for domestic agricultural
producers, especially after our country
joined the WTO. But now we are able to clear
it up. It is true that this had a negative
impact in terms of food price inflation. So
in this respect we will have to put up with
it for some time, but domestic agricultural
output will inevitably grow, and it will
grow, especially on the back
of the government support measures that are
I am aware
of the discontent among agricultural
producers. They are probably in the studio
and will have an opportunity to ask some
questions. We will discuss it, but it should
be noted that the support is there. Domestic
production and food security are extremely
important, and we will seek to ensure them.
Would we have taken these counter actions
or not without the sanctions? The answer is
no. But now we are doing it.
It is true that Russia is a strong nation,
and we can endure. Many text messages from
the regions are coming to mind, in which
farmers and producers are all saying that
the key thing is to ensure that
the sanctions are not lifted, because we are
beginning to step up local production. So
removing the sanctions now would be
We will come back
to this issue later. At the same time there
are other questions. People are recalling
your press conference from six months ago,
during which you said that it would take two
years for the economy to recover. Maybe it
is time for you to adjust your forecast?
Perhaps we will do it sooner. Given what we
see right now – the strengthening
of the ruble, market growth and other
things – I think that perhaps this could
happen sooner, but still, I believe, it will
take about two years. Considering all
the factors, we are forecasting a certain
production decline later this year. But
then, we assumed that the start of this year
would see a considerable drop in production,
but it did not.
I would like to tell
you that industrial production in March
of this year was 99.4 percent of what it was
in March 2014, and in the first quarter
of this year, 99.6 percent of the level
recorded in the first quarter of 2014.
In practical terms,
there has been no decline in production
during the start of this year. Some growth
is possible but it will be contingent
on the key rate, the Government’s
and the state’s economic policy, and many
other factors. Still, we must do our best
to keep up the positive dynamics that we are
witnessing right now. It should be
maintained and accelerated.
We are living in an environment of sanctions
and counter-sanctions. Don’t you feel that
something could have been done differently?
Perhaps there is always a chance to do
something differently. I do not know if
something would have been better. I think we
took the best approach.
Mr President, a very important question is
whether we will have enough strength
You know it is not even the matter
of strength. As for resources, we certainly
have a lot. The most important thing is
human resources, people’s skills
and willingness to work. I have had a lot
of contact with people, and I know how they
feel, particularly about the sanctions. But
I do not want to show you the gestures – you
can imagine what gestures come from ordinary
Our task – the task
facing the President, the Government,
the Central Bank, and the heads
of the regions – is to get through this time
with minimal loss. Can we make it or not?
Yes we can, and it is not about being
patient. We must use the situation to our
benefit. And we can do this.
What other threats could Russia be faced
with this year?
You know, there are lots of unpredictable
threats out there, but if we manage
to maintain a stable political situation
in the country and keep our people as united
as we are now, we will be immune to any
Mr President, I would still like to focus
on some negative issues. The crisis is still
here. The Government came up with an action
plan to overcome it, but frankly we have not
seen any results so far. Sometimes, it seems
that the key strategy boils down to our
expecting oil prices to improve, and the oil
money to start flowing into the budget, thus
resolving all the problems.
This is an overly critical assessment
of the Government's work. Of course,
the Government should always be criticised,
just like the President and the governors.
Everyone needs critical feedback as a matter
of fact. Generally, criticism helps to look
at things from a different perspective,
which is always good.
a socioeconomic stabilisation plan for our
country under such circumstances is not
an easy task and requires a highly
professional approach. These things cannot
be dealt with in an offhanded manner. You
cannot just throw money at the problem
thinking that we have an infinite supply
So, it took
the Government some time to sort things out
and see what needed to be done and what it
takes to accomplish it. However, the plan
that I mentioned was adopted in late
December, and it is now being implemented
Could it have been
done faster? Probably yes, we could have
moved faster. Nevertheless, this action plan
has been thoroughly thought out,
and I believe it adequately reflects
the current state of our economy. What
I mean is that, first, this is an ambitious
plan with a budget of 2.3 trillion rubles,
which is a lot. Of this amount, 900 billion
rubles were used to directly support
the banking system, which is, according
to some experts, the lifeblood of our
economy. No matter who criticises
the Government or the Central Bank, it must
be admitted that these actions are correct
and justified, which can be corroborated
by the previous 2008–2009 crisis.
Moreover, 250 billion
has been allocated to the goods-and-services
sector, also via banks, but in effect
straight into the real sector
of the economy. A decision has been made
to boost the capitalisation of the United
Aircraft Corporation, i.e., to inject 100
billion rubles into the aircraft
manufacturing sector. Over 82 billion will
be provided to support the labour market
and 200 billion plus 30 billion
in guarantees to the real sector
and for the specific project.
The Central Bank has
provided for an entire package of what
I regard as timely and economically vital
measures. As I said earlier, we indexed
pensions at the beginning of the year.
In other words, a number of decisions were
made in the tax sphere that we will probably
discuss later. There is a separate programme
to support the agricultural sector. Also,
in the domestic transit sector − say, rail
transit – things have not been finalised
there yet, but nevertheless, a decision has
been made to introduce zero VAT on commuter
rail services, reduce VAT on domestic air
services by 10 percent, and so on. In other
words, there is a package, a comprehensive
set of measures, and they are beginning
It is probably not
quite fair to say that we are not seeing
the results. I understand that prices are
still what they are, although they started
falling in March. This is also a fact –
perhaps not in all regions, but it is
evident on a countrywide level. The ruble
has also stabilised and strengthened. So it
would be unfair to say that there are no
results. Perhaps there were greater
expectations, but this is exactly why I say
that we should face up to reality and choose
the right direction to move in. I believe
that the Government has made the right
choice and we are moving down this path.
But by all accounts, the strengthening
of the ruble has different causes.
Do you think so? What causes?
First of all, oil prices have grown slightly
and stabilised. And then there is also
an element of speculation because funds are
simply being converted into rubles, since
ruble interest rates have significantly
But why have they increased? (Laughs)
Oil prices indeed have
gone up a little, but this is directly
connected – and experts are already seeing
this – the strengthening of the ruble is
connected to oil prices, but this
strengthening is not directly related
to this increase.
There are other
factors involved, and I have already
mentioned the main one. Experts see that we
have passed the peak of the problems with
the repayment of external loans by our
banking and other enterprises in the real
sector, and we have adjusted the national
currency exchange rate. And nothing went
bust, everything works.
Yes, we have some
problems: inflation has gone up,
unemployment has increased slightly, but not
like in the Euro zone: it is over 11percent
there and here it is, so far, just 5.8
percent. So, all this contributes
to the shoring up of our national currency.
Let us bring the citizens
into our conversation. We will, in one way
or another, chip in on various topics. So,
while the Government is working
on the anti-crisis plan, ordinary people are
worried about prices: the prices of housing,
medicines, and food.
Pardon me, I would like
to make a minor correction if I may.
The Government has completed work
on the anti-crisis plan. The task now is
to put it into practice.
Natalya Vorontsova: “Prices here have
already gone up dramatically, the wages are
the same and even lower than before,
and there are massive lay-offs. We are not
living – we are surviving. How long will
this go on?”
We have actually already
begun to talk about this. It is true –
and I said it at the very beginning – that
people’s real incomes have dropped somewhat
because of the inflation, which leapt
to 11.4 percent last year. We will have
to take that into account in our social
policy by assisting, above all,
the vulnerable social groups, the citizens
who experience the most hardship.
The second most
important task is to preserve jobs. I have
already said that certain resources —
and that is over 82 billion rubles — have
been set aside to preserve jobs. If
necessary, that money will be used. I also
hope that the downward inflationary trend,
in any case its rate of reduction, will
remain the same, partly due
to the strengthening of the national
Let’s give the guests
in our studio the opportunity to ask some
Mr President, we have many small business
representatives here in the studio, and they
certainly have a lot of questions. I would
like to give a businessman from Nizhny Tagil,
Sergei Partin, an opportunity to ask his
question. He is the owner of a mobile
Good afternoon, Mr President. Hello Russia.
I have the right to ask the first question,
thank you. First, I would like to say that
the measures to support young businesspeople
and those who have only started their
business are efficient. Ours is a good
example of this. Two years ago, we launched
a production company, and this year we have
become Russia’s best youth business project.
So we keep on working and doing it
efficiently, and we wish the same
We are experiencing
a problem with youth personnel, and we are
solving it at the local level. The point is
that young people leaving school and even
graduating from universities are unaware
of what their talents are, how they can
benefit Russia, and what they want to do
in life. So my question is, how is
the problem of early career guidance
of young people going to be resolved
at the state level? Thank you.
As I understand it, you are ready to share
your experience with us.
Yes, I have mentioned that we have some
experience, and it helps a lot.
What do you produce?
At the moment, we are making candies
and expanding the business through
franchising. We are teaching people
excellent cooking skills, both children
See? This is a perfect example of what can
be done and in what way. Training
professional personnel, particularly
in production, is a key element for growth
in the near term as production itself is
becoming more complicated and we really need
highly skilled workers in the first place.
We work closely in this
area with business associations – those
representing small, medium-sized and large
businesses. We have agreed with them
on a variety of cooperative measures. These
include competences in many areas, the joint
organisation of in-production practice
and so on. Without this, it is simply
impossible to move forward – this is
obvious. The Government has a comprehensive
programme for action in this area.
But of course, you are
absolutely right: it would be better
to start this career guidance at an early
stage, in school. Yesterday, I had
a discussion with my colleagues. In large
cities like Moscow, almost 100 percent
[of young people] want to move on with
higher education. Striving for knowledge is,
incidentally, a very good thing of course,
but it shows, among other things, that
career guidance at school, which you
mentioned, is still poorly organised here.
We’ll work with you on this.
Let’s give our guests an opportunity to ask
questions. Valeriya, please.
I would like
to give the floor to Alexei Kudrin,
the former finance minister, an eminent
expert who has twice been recognised
by the international community as the best
finance minister in the world.
Mr Kudrin, your
Good afternoon, Mr
This is also about
During your first presidential term,
the economy grew by about 7 percent
on average, even though oil cost
approximately $30 per barrel. But during
your current term, the average economic
growth rate will be about 1.5 percent even
if the price of oil goes to $65-$70. That
is, there will be negative growth years
and positive growth years, but the average
rate will be about 1.5 percent, which is
lower than the world’s average.
The global share
of the Russian economy will decrease. There
will be insufficient investment in technical
progress and modernisation. We will lag
behind the [industrialised] world
technologically. Unfortunately, this will
affect our defence capability, which depends
on the economy and technological standards.
No matter if we say we can manage,
the figures I have provided are almost hard
facts for the period until 2018. It is
unfortunate, but we will be lagging behind
You also said that
the Government is adjusting its policy. But
I do not think that adjustments can save
the day. The old economic system has
exhausted its potential, and nothing new has
been proposed so far.
What can you do
to help us create a new growth model?
Mr Kudrin, we have worked together for many
years, and we have very good and nearly
friendly relations. I know your views
on this matter. And you have presented your
forecast very clearly, and it is very close
to what can indeed happen.
To begin with, you
were among the authors of the programme
of the development of our country and its
economy through 2020. “2020” is a well-known
programme and it has not changed in any
significant way. If you and I overlooked
something, this has to be our fault,
including your fault.
But we have to proceed
from the realities of today and – you are
right – to look at what is happening
in the world and in our economy.
The blueprints are known: we have to provide
better conditions for business, we have
to provide better conditions for private
investment, we have to improve our monetary
policy, and of course we must greatly
improve the system of running the country
as a whole, the Government and individual
sectors, we must improve the work of law
enforcement agencies and the justice system.
This is a complex task. It is easier said
than done, but of course we have to do it.
As they say, “don’t dwell on it, deal with
it.” We must do it.
Of course there are
things that are well known, but, as they
say, this requires political will. You know
that in spite of the fairly difficult
conditions, we are exerting certain efforts
in the direction you and the people who
share your views on the development
of the economy have recommended.
For example, this
year, the Government has not adjusted
for inflation certain social benefits. I am
aware that your colleagues, those who share
your point of view, say this is not enough
and that perhaps we should make more
reductions and freeze more expenses,
and reduce incomes because wages are growing
too fast, that the retirement age should be
raised as soon as possible if we are
to balance the pension system in which we
have to funnel huge resources out
of the budget and the reserve funds. All
this impedes our development. Theoretically,
this is true, of course. To shape economic
policy competently, a brain is definitely
needed. But if we want people to trust us,
we need a heart, too. And feel how ordinary
people live and how this affects them.
If we keep people’s
trust, they will support everything we do
and even will be willing to put up with this
situation, as our colleagues have assured
us. But if we act while disregarding
the people, then we will quickly roll back
to the early 1990s, as I see it, when we
will lose people’s trust and will have
to spend much more money on social issues
than is stipulated for onward movement, even
if at a slow pace, like it was when we
decided to convert from benefits in kind
to cash payments, a sharp move that
ultimately cost huge amounts of public
funds. To prevent this, we will do what
the Government and the Central Bank have
proposed. I think this will suffice.
We will see if our lag
will be really serious. Just look
at the level of the US national debt, which
is now higher than its GDP. This is
an alarming sign, a red flag for the entire
global economy. And we do not know which
turn the events will take there.
The Euro zone has
a huge amount of problems. It is coming
apart. What will the debtor countries, whose
debts have reached 174 percent of GDP, do?
What will happen in Europe? Will the Euro
zone leaders be able to help
the underperformers? We do not know this
either. So we will above all focus
on ensuring high growth rates, but in doing
so we will try to avoid putting an excessive
burden on the people. Everybody knows this
very well. Well, maybe not everybody, but Mr
Kudrin knows enough as a member
of the Presidential Expert Council. You know
that we highly respect your opinion,
and I personally respect it, honestly,
and we will definitely listen to what you
have to say.
Mr Putin, may I explain one detail?
The fact is that reform in the social sphere
is part of structural reform. It is not
entirely accurate to presume that
my colleagues or I propose reducing incomes
or freezing salaries. Targeted social
assistance is one of our ideas. That is,
the way things are now, someone needs to be
paid more based on considerations other than
average wage or benefit increase ratios.
However, others may have to get by with
smaller salary adjustments. Different
approaches depending on household income are
more efficient even before a crisis
or in-between crises, all the more so during
a crisis. This is my first point.
My second point is
that, after all, our proposals are designed
to curb inflation. Current inflation
as of early April is up 17 percent compared
to April 2014. This jump may not have
happened if other reasonable measures had
been taken, and the standard of living
and real income would not have declined so
much in that case. Remember when I said
earlier that salary increases should not
outpace labour efficiency? But that
adjustment has now happened. If wage growth
had stayed with labour efficiency growth,
this adjustment would have been less
pronounced. I wanted to clarify this.
Also, I believe that
the Presidential Council, its Presidium, is
too sluggish. It should work harder.
Also, Mr President,
one more point: Strategy 2020 was developed,
but it was not adopted by the Government. It
remains a draft. About 25 percent of it was
used for drafting various Government
measures, but the strategy itself is not
working. That is why I am saying that under
the current circumstances we need
a programme that can clearly identify
the goals that we can reach despite
the sanctions imposed on our country.
Programme 2020 is
a guideline for our development and it is
still in effect. As for the targeted nature
of social assistance, I completely agree
with you, and the Government has been
instructed to work on this.
Regarding the issue
of wages rising out of proportion
to the rise in labour efficiency, I have
already expressed my position on the issue
and I believe that you are also right.
Simply put, it is always more difficult
to do this on the practical level than
in conversation, even during direct lines,
directly with the people, because the level
of wages, the level of income, especially
in such a sphere as school education, is too
low to count on real results.
Granted, this leads
to imbalances, like those that we have
today. Yes, this happens, but on the whole
we should seek to ensure that – as this is
the case in some sectors – wage rises should
follow productivity, not vice versa. This is
It is very important to preserve people’s
trust, as you said a few minutes ago,
and Russian people are willing to help you
here by drawing your attention to the fact
that the authorities, with their
ill-considered actions, for example, provoke
uncalled-for price hikes. I am now talking
about the counter-sanctions and the fact
that they have been successfully bypassed.
For example, here are two short text
messages: “Why is it that we were promised
import substitution [programmes] but
in reality we are buying the same things,
only through ‘friends’?” The word “friends”
is used here in quotation marks, meaning
that imports are coming through
intermediaries. The other message: “Despite
the embargo, we continue eating Polish
apples and cabbage. They have never
disappeared from the shelves. In September,
we had them at 35 rubles [per kilo]
and in the winter they were 85.
The deception is simply outrageous: They
arrive in the same containers, but without
the stickers or with stickers from other
countries, and sales assistants know that
these are Polish apples.”
It would also be good to know who provides
customs clearance for these shipments. If
this is true, and it could actually be
the case, we will try to eradicate such
practices. Honestly, this actually makes
the situation on the food market somewhat
less dire. As I’ve already said,
the counter-measures we have taken led
to an increase in food prices, driving up
inflation. Still, this is an issue of being
dishonest about what you do. Please, let me
know where such things are happening.
The main thing now is
not to fight simply such negative
developments, but to focus on fostering
growth in the domestic agriculture industry.
This way we will be able to free our shelves
of foreign goods by economic means, coupled
with a dose of administrative pressure based
on counter-sanctions, so that domestic
producers can have the place they deserve
on store shelves.
Let’s continue with agriculture.
Here is a text message
confirming what Maria has just said. It
comes from Yury Lang from the Novosibirsk
Region, who works in agriculture. He writes:
“Mr President, agricultural producers are
asking you to refrain from lifting sanctions
against foreign producers, give us a chance
to flood the market with our own organic
products. I’m afraid that foreign goods
could invade our markets.” We have
an opportunity to understand whether Yury’s
colleagues in other parts of the country
share this sentiment. The Stepanovo village
in the Kostroma Region, where our colleague
Pavel Krasnov is working, joins us now.
Hello, Moscow. This is
the village of Stepanovo in Kostroma Region.
We are now on a farm; there are perhaps
thousands of similar farms in Russia. This
cattle-breeding farm – you can see its
structures around us – is the work of local
farmers. Three farmers here in Stepanovo
have formed a company to produce beef
and milk. This farm is the result of their
efforts. It is not big compared to others
but, I repeat, it is like many others
in this country. And the issues that concern
the local farmers are certainly the same
as those that interest their colleagues
in other regions of Russia. These issues,
of course, have to do with agriculture
and support for it. But the professionals
themselves can state their case much better
than I. I'll give it over to them.
Good afternoon, Mr President. My name is
Mikhail Rumyantsev, and I am a dairy farmer.
I would like to ask you about state support.
We have many agricultural programmes,
perhaps even too many. But for some reason
the money that comes to this region is
shared mostly among major producers, big
farms, and investors, while we, ordinary
farmers, are left with crumbs. We would like
this injustice to be rectified. Thank you.
Let me report in general on what is being
done in the agricultural sector and in terms
of its support. The host has just read
a question asked by one of your colleagues,
an agricultural producer. He said that we
should keep the market free of foreign
goods. But there is the other side
of the coin, the consumers, who want quality
goods at acceptable prices. This is why
the state has developed a system of measures
to support agriculture as a whole. This
system includes two tax support options:
a simplified tax system and a second system.
Which one do you use?
I pay agricultural tax.
Unified agricultural tax, right? But this
year we have introduced additional support
measures. What are they? One of them –
and I think it is the most significant one –
is the increased subsidies for bank interest
on loans that entrepreneurs use to increase
their working capital. It used to be that
the government only subsidised 5.5 percent
of the bank’s interest rate on loans; now it
is 14.7 percent. This means that if you,
for example, borrow at 20 percent, you pay
an interest of 20 percent minus 14.7
percent. However, if you borrow at 25
percent, your resulting interest will be
10.3 percent. But I hope that, once the Bank
of Russia takes some steps to cut its key
rate, borrowers’ lives will be easier.
We have allocated
an additional 50 billion rubles to support
agriculture this year, and approved another
4 billion to subsidise equipment leasing.
Two of the four billion, I think, went
to Rosagroleasing. Other government measures
involve increasing the “per-hectare” support
by 8.5 billion from the former
14-something – probably 14.5 billion rubles.
the support for small agricultural
businesses such as yours. Our recommendation
to regional governments is to provide two
million each to start-up farms. The money
comes from the federal budget.
You were right to say
that there is a whole package of support
measures. It is difficult to say why
the support never reaches the small
businesses it is meant for. To find out, we
might need to explore the situation in your
region specifically. The area you are
working in is certainly a challenging
segment of agriculture, so the government
will need to think of more ways to support
dairy producers. Right now, purchasing
prices are often below your production
costs, I know that. We understand your
problems and will try to help you.
As for the problems
your farm is facing, specifically,
and the situation in your region, we’ll have
to take a closer look and maybe talk to your
governor. Which region is that?
Stepanovo in Kostroma Region.
There are more farmers
here with us in the studio today, so let’s
give them a chance to ask their questions.
In fact, every
time I speak to farmers I see that these
people carry endless optimism, despite
everything – and there are many “despites.”
For instance, here we have an ordinary
Russian farmer who goes by the simple
Russian name John. He arrived in Russia 23
year ago, and he’s been a citizen of Russia
since 1997. I spoke to him –
and to my surprise, I have learnt that
throughout all these years, his farm hasn’t
yielded a penny of profit.
Mr Kopiski, you have
Good afternoon, Mr President.
Today we have 3,700 cows, of which 1,700 are
milking cows. Each cow produces 10,000
litres of milk a year. We sell milk below
cost, and we have no money in reserve. Now,
after the well-knownconflicts, the cost has
increased. Today we have to sell our milking
herd as we have absolutely no money.
I cannot develop
my farm and build new farms because I have
no profit. I have been in this business
for 15 years. I cannot develop my farm if
I can’t get a long-term loan not only for 15
but for 20 years, provided that a bank
agrees to provide this money. You do a lot
of good things, but banks are a different
So I cannot develop
my farm if a bank demands collateral
of at least 120 percent. A colleague of mine
has collateral of 200 percent. To get
the loan, my own contribution should sit
at 30 percent. Even, as you have just
mentioned, with a 26 percent interest
rate. I can only hope that we’ll have
to actually pay a 13 percent interest rate…
If so, then when? Two years ago, I had
to wait for 11 months. And we can be out
of business any day.
the statistics. Everything looks fine, but,
forgive me, this is not so. Please forgive
me if I ask you a tough question, but I have
five children and I love Russia. Russia is
their homeland. I want their future
in Russia to be secure. My son has been
working in England for two years and he
wants to return, but he doesn’t want to run
a dairy farm. He told me: “Dad, I’m not
a fool.” The future can only be built with
the truth. Problems can be solved only if
you know the real facts.
I am sorry, here’s
my question: do you believe the statistics
they show you, or are they lying because
they are afraid to tell you the truth?
I don’t like statistics.
How did you end up here
(in Russia)? Was it a case ofcherchez la
femme? It means “look for the woman
John has a Russian wife.
I’ve been married
to a Russian woman for 23 years, my whole
family is Russian.
Regarding trusting or not
trusting statistics. Every country has some
complaints about its statistics, but I do
trust the figures they give me. If you
noticed, answering the man who is in fact
your colleague, the man from Kostroma who
was just asking a question and who also
produces milk, I told him right off that
the procurement prices for milk are below
cost, and this creates problems. These are
statistical data. So I have no reason
to mistrust these statistics.
The question is what
to do to improve the situation? I have
already mentioned one step. The Government
has decided to increase subsidies on loans
to replenish working capital. Anyway, you
have been a farmer for so long and you
continue to do it, which means that if
things were really so bad, your business
would have gone under, but in fact it
There is also
the issue of dried milk, which is imported
in huge quantities, and we keep saying that
dried milk imports, for example from
Belarus, are ultimately decreasing
the prices of Russian goods. As in any other
economic association, we will talk it out
with our partners in a frank manner
to coordinate the methods and the level
of subsidies for the agriculture industry
as a whole and for individual sectors,
including the dairy sector. This is first.
Second, we will
certainly have to increase support. I think
the Government will have to increase
support, including in this particular
sector, if we want to preserve dairy
However, there is one
more component here. You mentioned milk
yields. I do not know if milk yields are
high at your farm, but I do know that
the Russian average is low. Compared
to other countries, our dairy industry is
ineffective. What is the average for our
country? What is the figure at your farm?
The [annual] yield is above 10,000 litres,
or 29 litres per day. I think that if we
consider statistics, if we have honest
statistics for forage-fed cows, we cannot
say that the average annual yield in Russia
is below 5,000 litres. The yield at my farm
Twice as high.
But that is because we do not have so many
forage-fed cows. This is not right, because
you need to manage your business, especially
the dairy business. Pardon me, but this is
It is important indeed.
So where is the reality?
It is important, I agree. We are aware
of the reality. You may think that this is
not the case for me or the Government. But
we do know how things are, and I hope that
the Government will make relevant decisions
to this effect, as I have already said.
Maybe what has been
done so far is not enough. That said, quite
a bit has been done on the back of some
restrictions, including budget constraints.
We have to balance the interests of a number
of industries, although agriculture is
currently among the priority areas. What
I mean is that we are freeing up the market
for domestic producers. We will keep working
with you on this. Let’s wait and see.
As for statistics,
I am inclined to trust rather than distrust
Thank you. Let’s hear another question from
Kostroma Region. Pavel, go ahead.
Here’s another question. We have set up
a special display to illustrate it: a bottle
of locally produced milk from the Stepanovo
village. This isn’t a coincidence. So, what
is your question?
Hello, Mr Putin, greetings to you from our
staff. Hello to the people of Russia.
We are a small
company, but still we are contributing
to some extent to the wellbeing of our
country. We produce milk and meat.
Unfortunately, we now find it very
challenging to sell our products, to get it
to the customers. So I would like to ask two
The first question has
to do with what is known by the blanket term
“social sphere”: kindergartens, schools,
specialised boarding schools and so on.
I would like our products to go directly
to these institutions because we produce
high-quality milk. Milk powder is good, but
it needs to be rehydrated before it can be
used. We provide real full-cream milk,
and we find it difficult to compete with
those who buy and resell. We don’t do this;
we just need to sell what we produce. This
means agricultural producers like us need
some quota in this market niche, even
a small one. This is my first point.
The second is that we
need to reach our customers directly, to be
close to them. We need to organise our own
retail business, even a small one, small
shops maybe or trailers, but we want to be
able to offer customers our products
bypassing large grocery chains,
intermediaries and so on.
The math is quite
simple really: we can supply our milk
to a dairy plant which pays us 16–17 rubles
a litre, while in a store, the kind
of full-cream milk I have here costs 72
rubles or more. So who earns more per litre
of milk: we, who produce it, or those
who buy and resell?
So that is why farmers
are so keen to have a channel to sell their
products directly to customers, so that
customers would be able to buy directly from
About the cost and purchase prices – we have
already agreed that this is an issue we
certainly need to address.
With regard to selling
your product, milk. We have talked about
this many times, and even adopted special
legislation to protect agricultural
producers and help them get their produce
to grocery stores. If that is not enough, we
can come back to this again and review this
issue one more time.
Regarding the use
of milk in social institutions, such
as kindergartens, schools, etc., these
issues should be addressed at the regional
and local levels. I hope that your governor
and other governors hear us and will act
However, in this case,
you will still need to look at the price
level, because if a region buys something,
milk in this particular case, then
of course, the regional authorities will be
thinking about how much they can afford
to spend on a particular product (it
involves budget funds, which are limited).
And, finally, your
last proposal, or rather idea, to operate
through your own outlets. You are talking
about large urban areas, right?
That’s what I thought. Does it have to do
with purchasing some retail space or setting
up temporary selling spots? Is that what we
are talking about?
I am not talking about the markets, because
first, milk is a perishable product,
and second, we want to be closer to our
customers. We want to establish a presence
in residential areas. There are clean water
programmes with small outlets selling clean
water. We need municipal authorities to give
us five to six square metres in a city
and hook us up to a power line. We will
build a stall, which will be part
of the urban development plan. So,
everything will look good and neat and will
be consistent with
the sanitary-epidemiological regulations.
I am sure it will. You know, there are
misgivings, in particular among local
authorities, because of the negative
experience with outdoor markets, even very
small ones. There is a problem here, that
retail chains and individual stores sell
expiring or expired goods to these small
But you are speaking
about very practical issues related
to the marketing of particular goods,
and I fully agree with you. We will send
a signal to the heads of regions, who will
in their turn get to the municipal
authorities. I see nothing bad in this;
the idea is very good because it will reduce
the distance between the producers and their
buyers. Indeed, we sell kvass and water
at outdoor facilities, so why not sell milk
I fully agree with
you. I will certainly discuss this idea with
Thank you, and good
We thank the village of Stepanovo for taking
part in this Direct Line.
We can also take
questions from the audience. Valeriya, go
We have a question on foreign policy. We
have here MGIMO Rector Anatoly Torkunov,
a diplomat, historian and political
Mr President, we know
that our prosperity and economic development
largely depend on foreign developments,
the global political agenda
and international relations.
My question is
specific rather than global. This week
the media carried dozens and even hundreds
of comments on Monday’s statement about
the lack of obstacles to sending S-300 air
defence systems to Iran. At one point we
signed this agreement with Iran but then
suspended it later.
In commenting on this
issue, both journalists and politicians
expressed many apprehensions over sending
the S-300 missiles, that it would impede
the completion of our six-way talks
on Iran’s nuclear programme. Moreover, some
of them even claimed the air defence systems
would aggravate the situation in the Middle
This morning I also
read Angela Merkel’s statement that
the sanctions should have been cancelled
simultaneously rather than one by one.
Meanwhile, some people in Israel are saying,
as you may have heard, that if the S-300
systems are sent to Iran, Israel would take
its own measures, including arms sales
to Ukraine. I would like to know what you
think about this.
Indeed, we signed this contract way back
in 2007. In 2010 it was suspended
by a presidential executive order because
of the problems over the Iranian nuclear
programme. This was really the case, but
today we can clearly see – and you
understand it well, as an experienced
person – that our Iranian partners are
demonstrating a lot of flexibility
and an obvious desire to reach a compromise
on their nuclear programme.
In effect, all
participants in the process have announced
that an agreement has been reached. Now they
only have the technical details to deal
with, and they will complete this before
June. This is why we made this decision.
I have not read
or heard the statement by the German Federal
Chancellor and cannot comment on it for this
reason. But if someone fears that we have
started cancelling the sanctions, apparently
our colleagues do not know that the supply
of these systems is not on the UN list
of sanctions. We suspended this contract
absolutely unilaterally. Now that there is
obvious progress on the Iranian track, we do
not see why we should continue imposing this
ban unilaterally – I would like to emphasise
As for the list
of sanctions envisaged by the UN
resolutions, we will of course act in unison
with our partners. We have always cooperated
with this, and I would like to stress that
we have made a large contribution
to the settlement of the Iranian nuclear
companies made this equipment. It is
expensive – worth about a billion dollars
($900 million). Nobody is paying our
companies for these systems. There was
a hint that they could be bought, but nobody
buys. So we have to ask: why should we take
But the situation is
improving and this equipment is not
on the sanctions list. I think that
on the contrary, our Iranian partners should
be encouraged to continue in the same vein.
In addition, there is one more aspect
to this problem.
the position of our Israeli partners. I must
say, in our military arms exports we have
always focused on the situation
in the region in question – most
importantly, in the Middle East. Speaking
of which, we are not the Middle East’s
largest arms supplier. The United States
provides many more arms to the region
and takes a much greater profit.
Well, just recently,
Israel expressed concern over our exports
of the same S-300 missiles to another
country in the region. They stressed that if
successful, this arrangement could result
in big changes, even geopolitical changes,
in the region because the S-300 can reach
Israel from that country’s territory even
though it is not an aggressive weapon. But
as one of my counterparts said, none
of Israel’s planes will be able to take off.
And this is a serious problem.
We consulted with our
buyers. Our partners in one of the Arab
countries were quite understanding about
the issue. So we cancelled the contract
altogether and returned the advance payment
of $400 million. We are trying to be very
As far as Iran is
concerned, it is a completely different
story that does not pose any threat
to Israel whatsoever. It is a solely
defensive weapon. Moreover, we believe that
under the current circumstances
in the region, especially in view
of the events in Yemen, supplies of this
kind of weapon could be a restraining
Mr President, we will get back to foreign
policy later. I would like to steer
the conversation back to Russia. Many people
are complaining about high interest rates.
I have two messages here.
Larisa Kim from
Sverdlovsk Region: “Sberbank raised interest
rates for small business loans that had
already been extended by three percentage
points, effective April 2015, and this
despite the fact that the Central Bank is
cutting its interest rates. New loans are
now offered at an interest rate of 23–25
percent. Is there a way to influence how
Sberbank provides financing to small
Here’s a follow-up
question. Sergei Yermachenko from Irkutsk:
“When will loans become more affordable
and reasonable in Russia? Interest rates
at 35–55 percent kill the appetite
and opportunities for business development.”
Regarding small and medium-sized
enterprises, support programmes are
in place. I will not name them all. I think
that those involved in SMEs should be aware
of them. This information is public, you can
find it online or through relevant business
Just as with
agriculture, it may seem that initiatives
targeted at SMEs are underfunded. This is
the way people should actually feel, because
small and medium-size enterprises account
for a smaller share of GDP in Russia
compared to developed economies. Without
a doubt, this is not the way it should be.
One of the main
vectors is to create clusters of small
enterprises serving major corporations. This
is a project for the future. That said, we
already have SME quotas in state
and municipal procurement. A decision
to provide a two-year tax holiday for people
starting a business has already been made.
This measure is especially relevant
for entrepreneurs in rural areas, since they
can also benefit from programmes offered
by the state loan guarantee agency.
The Central Bank of the Russian Federation
maintains its interest rate for commercial
banks at 6.5 percent. It is true that only
one bank, a subsidiary of Vnesheconombank,
currently offers such loans. Just recently,
I was told by the Central Bank Governor that
they intend to increase the number of banks
offering such transactions. A bank with SME
loan contracts will be able to benefit from
a 6.5 percent interest rate from the Central
Bank, which means that borrowing costs will
be lower compared to market rates.
However, what you have
said is, of course, over the top. Naturally,
it is important to see what kind of client
the bank is dealing with. If there is no
collateral, if there is no credit history,
then of course, the bank will increase
the interest rate. But 35 or 55 percent is
an unrealistic figure. Sberbank’s principal
shareholder is the Central Bank
of the Russian Federation: the Bank
of Russia. I will certainly ask Elvira
Nabiullina to look into what is going
on there. Leave me this information.
35, 55 [percent] – this is not Sberbank.
And the previous one – what was it?
23–25 – Sberbank.
23–25, maybe that was before the key
interest rate was reduced? Well, anyway,
this needs to be looked into. Please, give
me this information later as well, okay?
Right, we will give it to you after
the programme. This seems to be a good time
for questions about the civil service,
because there really are a lot of them. It
seems that in turbulent times people pin
special hopes on the civil service, with
a lot of them asking questions like these:
“How professional, in your opinion, is
the civil service?” “Is it not the time
to bring professionals back into the civil
service?” and “Maybe a professional banker
should be appointed to head the Central
Bank?” These are the kinds of questions
What “bring professionals
back to the civil service” mean? There
should always be professionals in the civil
service. If there aren't, this is sad.
In fact, we are short of professionals.
Incidentally, we seek to provide appropriate
wages to attract the most proficient
and best-qualified people from the labour
market to the civil service. To reiterate,
it is always better to have professionals
in the civil service to prevent crises.
However, if a crisis has struck
for objective reasons, then we should find
our way out of it with gains, not losses.
of the Central Bank, I have no major claims
concerning its work. By the way, what do you
mean by “returning a banker to head
the Central Bank”? The Central Bank is not
just a commercial bank; actually, it is not
a commercial bank at all, it is the main
regulator of the Russian monetary and credit
sector. Now it also has been vested with
larger authorities. That is why a person is
needed who has a good knowledge of the work
and functions of a banking system, but it
has to be a specialist with specific
knowledge, economic knowledge, in the first
place. One can criticise the Central Bank –
and here is a hidden criticism
of the Central Bank – for its delay
in taking a decision on raising the key
interest rate. If they had done it earlier,
then probably it wouldn’t be 17 percent. But
I would like to stress that overall, all
experts – both Russian and foreign –
consider the Central Bank’s actions to be
professional and efficient, with
the necessary results achieved.
Now it is time for us to link with
the centre for processing phone calls
and messages. But first, I would like to ask
a question that comes up frequently. “Mr
President, foreign currency mortgage
borrowers are in trouble. I am appealing
to you concerning the currency mortgage
issue. We are aware of the Government’s
negative attitude to this problem. We are
not asking for our debts to be waived, we
are asking to re-evaluate, on a legislative
basis, the exchange rate in effect until
devaluation and thus to make us equal with
ruble mortgage borrowers. A law is needed
here, as banks will not reject excess profit
voluntarily. We are ready to continue paying
the mortgage loan to the bank, but
on adequate and reasonable terms.” And so
on. Mr President, what do you think of this
My overall opinion on people’s problems is
that one must always aspire to help them.
The reason the state exists is to help
What is this
particular case about? Not the one that you
just read, I do not know who wrote it, but
in general, how did the problem arise? No,
let me approach it from a different angle.
You know, mortgage loans in foreign currency
are worthwhile for those who get paid
in foreign currency. Assume someone lives
in London, New York, Paris or Berlin and is
paid in euros or dollars, but plans to live
in Russia, as our friend from the United
Kingdom and his children, who want to move
to Russia. They get paid in foreign
currency. His son lives abroad and is paid
in foreign currency. He can take out
a mortgage loan in foreign currency, because
he does not expose himself to the exchange
rate risk. However, if someone gets paid
in rubles, but takes a loan in foreign
currency, he or she would assume this risk.
If the rate changes unfavourably, he or she
will get in trouble. We should look into
that. I am not familiar with the details,
but when people take mortgage loans, banks
do not assume the exchange rate risk. That
way, customers assume this risk on their own
With regard to those
who took a mortgage in rubles and found
themselves in a tough spot, the Government
decided to help these people out. Some
money, about 4.5 billion rubles, has been
allocated from the budget to this end.
Are you talking about the people who took
out loans in rubles?
Yes. But this applies only to people who
found themselves in a tough spot, such
as having lost their jobs. Perhaps
the Government can think of ways to help
those who took out a mortgage loan
in foreign currency due to an unfavourable
exchange rate, but this assistance should
not be greater than the one provided
to the people who took mortgage loans
in rubles. In any case, the approach should
I just wanted to make a small clarification
in defence of those people. The fact is that
often mortgage loans in foreign currency
were taken by customers who bought housing
on the secondary market, and they had no
choice. The banks did not extend ruble
mortgage loans to buy pre-owned real estate.
No, banks are required to extend mortgage
loans in rubles. We do live in the ruble
zone. But this is a different story. If they
refused, you should have insisted, because
the interest was as high as 12%. As I said,
last year we reached a record volume
of housing construction at 12% interest
rate. That was for the first time
in Russia’s history. The 12% interest rate
actually turned out fine enough. Now,
the Government also plans to support
mortgage and has already approved financing
You mean new housing.
Yes. I mean new development projects,
and yes, our goal is not only to help people
get new housing at affordable prices but
also to support the construction market,
which, in turn, creates a great number
of jobs and encourages employment in related
industries, such as building materials
and so on, in power engineering and road
construction. It is an important sector
of any economy – the Russian economy
This is another reason
for our decision to subsidise mortgage
loans. Mortgage interest has increased
to 14%, and we aim to cut it to last year’s
level of 12% to revive and support
the growth of the construction sector.
I think this is achievable.
As for foreign
currency mortgages, we should help there
too, but let me repeat that the approach
and philosophy of that assistance should be
comparable to our support for people who
have found themselves in a difficult
situation, but who had taken their loans
We have been on air for almost an hour
and a half, so let’s look at what’s
happening at our message-processing centre.
Let’s hear from Tatyana Remizova.
Thank you, colleagues.
In an hour and a half
of this call-in, the number of questions has
exceeded 2.8 million, including 2 million
submitted by phone.
The Rostelecom lines
are overloaded. Our operators are processing
almost 4,000 calls a minute. There are a lot
of questions about the ruble exchange rate.
However, an even more popular theme is
the commuter railway service. We are getting
calls from the Lipetsk, Yaroslavl, Nizhny
Novgorod, Penza, Vologda and Smolensk
regions – I will not go through them all. We
all remember how commuter trains were
cancelled in January and then you, Mr
President, personally and firmly demanded
that the trains be restored. I suggest we
take a call on the issue from the city
of Balashov, from Alexei.
Alexei, you are on the air. Go ahead with
Good afternoon, Mr President! This is Alexei
calling. You have pledged to bring back
commuter trains. This is not happening
in Balashov. Tell me, please, how our rural
economy can be restored if we used to have
a regular train service between Balashov
and Saratov, but then it was cancelled
a year ago and now people are unable to go
anywhere. How are young people who live
in villages supposed to study if there is no
train service? How is this possible?
On the one hand, we want to develop, but
on the other, we deny young people access
to studies and make it impossible for rural
residents to move around.
Alexei, what can I say? I can only say that
I share your opinion that this is
unacceptable. I will not get into
the details of this problem now. You may not
be very interested in them, but
in a nutshell, the problem is that commuter
rail services are unprofitable
for the carrier. They became even more
lossmaking when the tariffs were raised
for the maintenance and upkeep of everything
having to do with rail services: tracks,
The costs went up
several times. It is for this reason that
my response to this decision was so
negative. When costs were increased
several-fold, the regions were unable
to pay. They simply lack the resources. So
they just cancelled the commuter train
service. Poor coordination and the inability
to foresee the implications of such
a decision led me to respond in such a harsh
manner. Service resumed on many commuter
train lines, but not everywhere. Your line
is evidently among those that are still
idle. You have said that you are from
Balashov? Balashov-Saratov? We will
definitely review this issue. Moving
forward, we will strive to find the best
economic solutions for the carries,
for the regions, and of course,
for the people.
and the state will have to assume some
responsibility, especially where there is no
alternative for people, who should be able
to live normal lives. In this case, children
should still be able to learn, and people
in general should have an opportunity
to commute to major cities for personal,
family business, and so on and so forth.
I have taken note
of what you have said. We will certainly
explore this issue.
In some regions demand for commuter rail
service is high, while in others it is not.
There are lines where people really need
commuter service, but it is not available,
while on others empty carriages and trains
Such trains were launched out of fear, just
to show that the trains are running. But
this is not a solution. It should be said
that a number of serious decisions have been
passed on the government level. First,
subsidies for Russian Railways have been
fully restored to prevent losses
for the company, since a monopoly should not
have losses. If memory serves me,
the government reimbursed Russian Railways
25 billion rubles. Costs related
to engineering infrastructure, which Russian
Railways had to assume when the subsidies
were dropped, were also reduced. The fact
that a zero-rate VAT was introduced is
of special importance. The Ministry
of Finance always opposes such measures,
doesn’t it, Mr Kudrin? Introducing
a zero-rate VAT on commuter train service
was a wrong thing to do from the perspective
of our financial block, it was a forced
measure, but we had to do it.
And here is a result of the measures you
mentioned: a positive signal from Sochi
about the Lastochka train. It is a commuter
train that started running in time
for the 2014 Winter Olympics. Ticket prices
have been cut to one-third, and now a ride
to Rosa Khutor costs 119 rubles instead
of previous 350 rubles. In the future,
commuter trains to Adler Airport will resume
service, and there is a rumour that
Lastochka trains may run to Rostov-on-Don.
This would be great.
I would like to remind you about video
questions. I am giving the floor to Natalya
In addition to video questions, we also
receive MMS messages, which turned out to be
very popular. We have received 43,000 MMS
messages. This is a very popular format with
messages coming from people of absolutely
different ages – from five-year-olds
to 80-year-old seniors. Mr President, people
from around the country are inviting you
They also have
requests, as in this message from Yelena:
“Mr President, I do not have a question but
a very serious request. My friend will be
celebrating her 40th birthday
on April 25. She has set her mind on a dog,
and we her friends are willing to chip in,
but her husband is firmly against this. He
is a retired colonel with an iron will, like
all our military. But he will be unable
to refuse his Commander-in-Chief. Just tell
him: Boris, you’re wrong! Let your wife have
So Mr President, what
should Boris do?
Oh, you have put me in a fix. Of course,
people in Russia have a special attitude
towards military personnel, which is
absolutely correct. Women love officers.
There have been various songs to this
effect — about women who love servicemen
because they are big and handsome.
Of course, we love our servicemen not only
because they are big and handsome, but
because they are real men who are always
here to help you, and so on and so forth.
The military are susceptible to female
charms too, as we remember from the jokes
Still, though, I can’t
order anyone to do anything. Boris would be
right to tell me to mind my own business.
And, besides, he is a retired officer. So,
I don’t know what to do, how to get out
of this fix. What’s the woman’s name, Irina?
We can try to work out some action plan.
For example, we could ask Boris together
to compromise with his wife, Yelena, while
Yelena could say, “No, I do not want a dog.
I will do as you like.” After that, sure
enough, he will not just give her a dog. He
will give her an elephant, especially if she
asks for it at the right time in the right
place. He might even promise her a fur coat.
I do not know if he will buy her a fur coat,
but he may buy a dog. So, let’s just ask
him: Boris, please, be so kind as to let
your wife have a dog. It is a good thing
and I’m sure pets bring families closer.
Mr President, one of the crucial issues that
we cannot avoid today is, of course,
Ukraine. Before discussing Russian-Ukrainian
relations, I would like to get back
to the article that you mentioned
at the very beginning. The same media outlet
has leaked one more rumour.
At a meeting with
business people you said, according to this
media outlet, that, during the long
night-time talks with Petro Poroshenko,
Angela Merkel and Francois Hollande
in Minsk, at some point Poroshenko literally
said the following: “Take Donbass. I don’t
need it.” Did this really happen?
No, it never happened. We discussed measures
to recover economic and social welfare
in Donbass. There are many problems there.
And we see that the current leaders in Kiev
are not willing to recover either the social
welfare system or the economy of Donbass.
This is true, and we talked a lot about
this. This is included in the Minsk
Agreements; the papers that were signed
by Ukrainian authorities are legally
has been done. As we know, Donbass is
completely blocked up. The banking system is
not operating. Social benefits and pensions
are not being paid. We talked a lot about
this, including with Mr Poroshenko.
I have also said
in public that, okay, there are people there
who are upholding their rights with arms
in hand. Whether they are right or wrong
in doing this is another matter but right
now I do not even want to qualify this.
Of course, I have my own opinion on this
score. I can qualify this and have done so
more than once.
But there are also
people who have nothing to do with all this.
They have earned a pension, in part,
by working in independent Ukraine for 20
years and they have a right to it. They have
nothing to do with the hostilities
or struggle of these armed people for their
rights. What do they have to do with all
this? Why don’t you pay them? You are
obliged to do this by law. But they are not
being paid. To sum up, there are grounds
to say that the current Kiev authorities are
cutting Donbass from Ukraine themselves.
This is the gist of the grief and tragedy
and this is what we spoke about.
Mr President, one more question
on the subject. If Kiev has already devalued
the Minsk Agreements, and if it is actually
pressing for war, how can a dialogue with Mr
Poroshenko continue at all? He is telling
you one thing, then another thing to his
compatriots and still another thing to his
Western partners. How can any dialogue be
conducted in this case?
Well, we do not choose our partners, but we
should not be guided by likes or dislikes
in our work. We must be guided
by the interests of our country and we will
proceed from this.
Here’s a text message — from Vladimir
Vladimirovich as well: “Petro Poroshenko is
a real criminal, considering how many people
died because of his actions. Mr President,
were you uncomfortable or reluctant to deal
Certainly not and I have just said this.
I think that the current Ukrainian leaders
are making many mistakes and they will see
negative results, but this is the choice
of the President and the Government.
For a long time,
I have been trying to talk them into not
resuming hostilities. It was Mr Turchinov
who first started hostilities in Donbass.
Then Mr Poroshenko got elected. He had
a chance to resolve things peacefully with
the people of Donbass through negotiations.
So we tried
to persuade him. I say “we” meaning
the Normandy format participants. To be
sure, I certainly tried to persuade him not
to begin hostilities and to at least try
to agree on things, but to no avail, as they
resumed military operations.
It ended badly
the first time and the second time. They
tried again a third time, and it ended
tragically for the Ukrainians again,
particularly, for the Ukrainian army.
I believe it was a huge mistake.
Such actions drive
the situation into a dead end. But there can
be a way out. The one and only way out
of this is to comply with the Minsk
Agreements, conduct constitutional reform,
and resolve the social and economic problems
facing Ukraine and Donbass, in particular.
Certainly, we are not
going to intervene. It is not our business
to impose a particular behaviour on Ukraine.
But we have the right to express our
opinion. Moreover, we have the right to draw
attention to the need to implement the Minsk
Agreements. We want them to be implemented
and we are waiting for all our partners,
including the Ukrainian leaders, to do so.
There are lots of similarly harsh questions.
People are asking why Russia offers
discounts on gas to Ukraine, why it supplies
cheap electricity and cheap coal to Ukraine
and extends loans to it, but is not treated
the same way in return? How do you respond
You know, the political situation in any
country can change, but the people remain.
The Ukrainians, as I mentioned earlier, are
very close to us. I see no difference
between Ukrainians and Russians, I believe
we are one people. Someone may have
a different opinion on this, and we can
discuss it. Perhaps, this is not the right
place to go into this issue now. But we are
helping the Ukrainian people, first
and foremost. This is my first point.
Second. We are
interested in the Ukrainian economy
recovering from the crisis, because they are
our neighbours and partners, and we are
interested in order and stability along our
borders, and want to build and develop
economic contacts with a partner that is
Suppose we give them
gas discounts, if we know that their economy
cannot afford to pay full price under
the contract – we don’t have to do this
of course, but we still think it is
the right thing to do, and we can
accommodate. The same holds true
for electricity, coal and other deals.
Incidentally, look, we
agreed with the Ukrainian leadership
in November or December 2013 to provide
a loan to that country. We planned to buy
$15 billion worth of their bonds, but
technically, it was a loan, that is, we were
to lend $15 billion, plus a $5 billion
discounted loan for road construction
through commercial banks.
Now look what Ukraine
has negotiated from its partners: $17.5
billion for four years.
We offered price cuts
on gas, and we did reduce the price
on the condition of regular payments
and settlement of prior debts. We cut
the gas price dramatically, and now they
increased it by over 300 percent.
Our past cooperation,
all the ties that remained, have been
broken. We have difficulties here
[in Russia], but their situation is beyond
difficult. Major industrial companies halt
production, they lose competence
in high-tech industries such as rocket
engineering, aircraft manufacturing,
shipbuilding and nuclear power. I think
these are really hard consequences. I do not
understand why they did this.
But events are
unfolding the way they are, and we will make
every effort to restore relations with
Ukraine. This is in our interests.
We suggest discussing this issue with
the guests in our studio.
Continuing the Ukrainian theme, here is
a question from writer Sergei Shargunov.
Good afternoon, Mr President. In 1994, poet
Joseph Brodsky wrote a poignant poem
on Ukraine’s independence in which, with
bitterness and sarcasm, he wrote about
Ukrainian nationalists, and even lamented
about Ukraine: “Gone is the love that was
But, apart from
nationalists, there are also many millions
of people living there, as you rightfully
said. I think that today they are at risk.
Unfortunately, you don't have to go far
to find examples. There are banners that
read, “A separatist next door awaits
'Russian peace,' call the Ukrainian Security
Service (SBU) hotline” – this means people
are being encouraged to rat on their
neighbours. A vast number of people who
simply have their own opinion are being
persecuted, and there are even victims.
Yesterday, former Party of Regions deputy
Oleg Kalashnikov was gunned down. Prior
to his death, he had received numerous
threats from neo-Nazis.
And, of course,
I cannot but mention those laws adopted
by the Verkhovna Rada ahead of May 9 –
so-called “anti-Communist” laws that ban
Soviet symbols, but in fact offend all those
who treasure historical memory of our common
Victory. I think these laws just legalise
a policy of apartheid towards Russians
and those who are attracted to Russia.
So here is
my question. Ukraine believes that Russia is
its archenemy, but at the same time
consistently demands natural gas discounts
and other benefits. Under what conditions,
realistically speaking, is normalisation
of relations between Moscow and Kiev
This is not an easy question although we
could elaborate on the unity and brotherhood
of the Russian and Ukrainian peoples.
I often do this. I have to.
The conditions are
simple. At this point, Russia is not
expecting anything from Kiev officials
except one thing. They must see us as equal
partners in all aspects of cooperation. It
is also very important that they observe
the legitimate rights and interests
of Russians living in Ukraine and those who
consider themselves Russian regardless
of what their passports say. People who
consider Russian their mother tongue
and Russian culture their native culture.
People who feel an inextricable bond with
Russia. Of course, any country cares about
people who treat it as their motherland
(in this case, Russia). This is nothing
Let me repeat, we are
willing to fully improve relations with
Ukraine and will do what we can on our side.
Of course, the Donbass issue is high
on the agenda. As I said, we are expecting
the Ukrainian authorities to fully comply
with the Minsk Agreements. First of all,
and the process is already being talked
about, it is necessary to create working
groups within the framework of the Minsk
negotiations and begin working on certain
areas. These include political reform, its
constitutional part, the economy
and the country’s borders. The work must
begin now. There is no time for discussion.
Practical implementation is necessary.
Unfortunately, so far,
we only see continuing attempts to influence
and pressure instead of a genuine
willingness to resolve the issue
by political means.
But I believe there is
no other way but a political resolution.
And everybody must realise this. We will be
working hard on this.
I suggest we hear one more question from
the audience on this subject.
Thank you, Kirill.
There is no need
to introduce our next guest. This is Irina
Khakamada who is well-known. She also has
a question, including one on Ukraine.
Irina, go ahead.
Mr President, I have been promised two
The first question is
of course about Boris Nemtsov’s tragic
death, which has shaken me, not only
as a citizen. You can understand this. We
worked together. The pain is still terrible.
So I have this question: what do you think
about the way the investigation is moving
along and is there a chance that we will
learn who ordered this heinous murder, which
is more reminiscent of a terrorist act?
Considering that his associates are
in opposition, including in opposition
to you personally, are you prepared
to ensure that they, including Navalny
and Khodorkovsky, can in the future run
for parliament on equal footing? Because it
is easy to criticize, but it is a more
responsible task to conduct opposition
activity on the state level in parliament.
Perhaps this would stabilise the situation
and stimulate private business and private
The second question.
At Boris’ funeral, Western journalists
approached me and said – this information is
also available on the internet – that Boris
Nemtsov had received certain information
about the presence of Russian troops during
the events in southeastern Ukraine.
At the funeral, the Western journalists kept
asking me the same question. Can you finally
say, can you say it in so many words whether
or not our troops have been there?
Let’s begin with the opposition, which has
a right and an opportunity to participate
in [the country’s] political life officially
and legally: A) of course, it can
and should; B) if they get into parliament
in the upcoming elections, this will mean
that they have received popular support
and then their activity will acquire
a definitive official status, and of course
they will bear responsibility for whatever
they propose. However, you are experienced,
you have worked in government agencies,
and you know that it is one thing to be
a State Duma deputy in opposition
and criticise just about everything.
The responsibility here is not very great
but it provides some sort of a platform
and allows people to come out
of the shadows. I believe that this is
a positive thing.
However, in the end,
the people decide, the people vote
on whether a particular person should be
in parliament. I believe that this is a good
Let’s now talk about
the murder of Boris Nemtsov. You were
friends with him, maintained contact. He was
a harsh critic of the Government in general
and me personally. That said, our relations
were quite good at the time when we talked
to each other. I have already made
a statement regarding this issue. I believe
a killing of this kind is a shame
and a tragedy.
the investigation going? I can tell you that
it took the investigators from the Federal
Security Service and the Interior Ministry
a day or maybe a day and a half at most
to uncover the names of the perpetrators.
The only question was where and how they
should be arrested. We should give credit
to our special agencies, who provided
objective data by using not only
surveillance cameras, but also extensive
possibilities that they recently acquired.
I am afraid I have to be careful not
to disclose the cutting-edge solutions
and methods our special agencies use, but
generally, as I have said, the issue was
settled in just a few hours. In this
respect, they worked efficiently
and promptly through a number of channels.
The same results were obtained by different
of whether those behind the murder will be
found remains open. Of course, we will find
out in the course of the work that is
currently being done.
Finally, the question
of whether Russian troops are present
in Ukraine… I can tell you outright
and unequivocally that there are no Russian
troops in Ukraine. By the way, during
the last conflict in southeastern Ukraine,
in Donbass, it was the Chief of Ukraine’s
General Staff who put it best by stating
in public at a meeting with his foreign
colleagues: “We are not fighting against
the Russian army.” What more can be said?
I have a follow-up question that was
submitted online to our programme. What has
caused the failure of Russia’s Ukraine
policy given, first, that Russia had such
a huge edge compared to other countries due
to historical ties with Ukraine? Second,
Russia invested about $32–33 billion
in Ukraine, while the United States invested
only $5 billion, which Victoria Nuland
acknowledged. Why did we fail
on the Ukrainian track?
You know, we were not the ones who failed;
it was Ukraine’s domestic policy. That is
where the problem lies. It is true that
Russia helped Ukraine even when we were
going through challenging times. How?
By supplying hydrocarbons, primarily gas
and oil, for a protracted period with a huge
discount compared to world prices. This went
on for years. It is true that this
assistance — this tangible economic
support — is without exaggeration worth
billions of dollars. We were actively
cooperating, to say the least. I hope that
in some areas cooperation can still resume.
Apart from cooperation projects, we have had
broad and diversified trade and economic
What happened? People
simply got sick and tired of poverty,
stealing and the impudence
of the authorities, their relentless greed
and corruption, from oligarchs who climbed
to power. People got fed up with all this.
When society and a country slide into this
position, people try to look for ways out
of the situation and, regrettably, sometimes
address those who offer simple solutions
exploiting current difficulties. Some
of the latter are nationalists. Didn’t we
have the same in the 1990s? Didn’t we have
this “parade of sovereignties”
or nationalism that flared up so brightly?
We have had all this.
We have been through all this! And this
takes place everywhere, so it happened
in Ukraine. These nationalistic elements
exploited the situation and brought it
to the state that we are witnessing now. So,
it is not our failure. This is a failure
within Ukraine itself.
But haven’t we missed the start
of the process of Ukraine’s alienation from
Russia? I am asking this question as such
processes might also take place
in Kyrgyzstan, Armenia and other post-Soviet
countries where our Western partners are
very active, as you said. There are more
than a thousand – 1,200 NGOs funded
by the Americans in Kyrgyzstan. These NGOs
are involved exclusively in political
activities. And how much is Russia spending
on this aim? A lot less.
You have made a Freudian
slip.You said we missed Ukraine’s alienation
from Russia but there was no alienation.
Ukraine is an independent state and we must
We alienated all this
ourselves at one time when we made
a decision on the sovereignty of the Russian
Federation in the early 1990s. We made this
decision, didn’t we? We freed them from us
but we took this step. It was our decision.
And since we did this, we should treat their
independence with respect. It is up
to the Ukrainian people to decide how
to develop relations.
When Ukraine had
a previous crisis, also fairly acute, Mr
Yushchenko and Ms Tymoshenko came to power
after a third round of presidential
elections that was not envisaged
by the Constitution. This was a quasi-coup.
But at least they did it without arms
and without bloodshed. By and large, we
accepted this and worked with them but this
time it came to a coup d’état. This is
something that we cannot accept. Such
a growth of extreme nationalism is
We must respect other
countries and develop relations with them
accordingly. As for what happens in these
countries, this is not something we can
control because these are sovereign
countries and we cannot become involved –
interfere in their affairs, which would be
For example, we are
developing relations with Kazakhstan
and Belarus within the Eurasian Economic
Union. What is the idea of such
associations? It is not to drag them over
to us – not at all. The idea is that
the people in our countries should live
better and our mutual borders should be
What does it matter
where ethnic Russians live, here
or in a neighbouring state, over a state
border, if they can freely visit their
relatives, if their living standards are
improving, if their rights are not infringed
upon, if they can speak their native tongue,
and so on. It doesn’t matter where they live
if all of these requirements are honoured.
If we see that people have a decent life
there and are treated accordingly.
This is the type
of relations that we are developing with
Kazakhstan and Belarus, as well as with
Armenia and Kyrgyzstan. We really want this
to continue. This is the main thing, and not
trying to keep [your neighbour] in your
sphere of influence. We are not going
to revive an empire; we don’t have this goal
in mind, contrary to what some people claim.
This is a normal integration process.
The world is moving along the integration
path, including Latin America and North
America – Canada, the United States
and Mexico – as well as Europe. And this
process is underway in Asia as well. Yet we
are being accused of trying to revive
the empire. It is unclear why? Why are they
denying us this right?
I want to say that we
have no plans to revive an empire. We have
no imperial ambitions. However, we can
ensure a befitting life for Russians who
live outside Russia – in friendly CIS
countries – by promoting interaction
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