Russian Deputy Prime Minister and Finance Minister Alexey Kudrin (left) and Russian Central Bank chairman Sergey Ignatyev
Photo: Valery Melnikov
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Russia Has Spent $222 Billion on Crisis
The world’s major countries have already spent, or plan to spend, $9.2 trillion on anticrisis measures. Great Britain has spent the most – 37 percent of its GDP. Russia has spent $222 billion (13.9% of its GDP) so far, according to a report prepared by RBC from publicly available sources. The authors of the report note that Western governments have chosen measures of support and insurance. Germany, for example, has issued state guarantees for ˆ400 billion of debts of financial institutions. Russia differs from the Western model in that it is not issuing guarantees, but is giving money directly.
The action plan approved by the Russian government at the beginning of the month included guarantees, but they applied only to enterprises fulfilling state orders. State guarantees are described in Russian legislation. “Thus, it would be fully possible to provide state guarantees as the main anticrisis measure through amendments to the budget law, but that was not done,” notes Igor Nikolaev, head of the strategic analysis department of Finance and Bookkeeping Consultants and one of the authors of the report.
The common factor in Russian and Western anticrisis measures is the lack of responsibility attributed to financial regulators. Observers note that it is difficult to make charges against financial officials. In the United States, however, there is a mechanism to hold companies responsible. Under the Troubled Assets Relief Program, executives whose companies fall onto financial hard times are to be denied their bonuses. In Germany, recapitalized banks do not pay dividends to their shareholders. There are no similar measures in Russia. “We are saving people in Brioni suits,” the authors of the RBC report note.
www.kommersant.com
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