Meeting with Russian media

MIL OSI – Source: President of Russia – The Kremlin – English –

Headline: Meeting with Russian media

Question: Mr President, may I ask you a question about domestic policy rather than talks with Greece?

Vladimir Putin: Are you having trouble sleeping?

Remark: I am. The whole country is thinking
about this issue.

Vladimir Putin: Go ahead.

Question: Mr Medvedev visited Crimea recently,
where he spoke about pensions. His comment became a major source of public
attention. In particular, one Crimean pensioner was very upset that there would
be no indexation of pensions this year or in the short term. How do you assess
the Government’s work in the social sphere?

Vladimir Putin: I can say for certain that the Government is determined to fulfil all social obligations. I did not see what
Mr Medvedev said in this regard. You can
always take some phrase out of context or from a general conversation.
Everything can match word-for-word, but the meaning can be totally different if
you look at the entire context of the conversation.

I know nothing about this but one thing I know for sure is that the Government pays a great deal of attention to fulfilling social obligations.
Moreover, I regularly meet with Government members responsible for both the economy and finance, and the social sphere. Social commitments are among the priorities. First of all, measures are studied, including now, to support low
income population groups. Of course, in the context of the current difficult
situation with the budget, the Government is forced to look for different ways of addressing these issues.

What ways can there be? One option is to index social benefits,
including pensions, with no regard for budget revenues, or alternatively, to try to limit the indexing to a certain amount while making every effort to keep
inflation down. There are different ways to control inflation through various
financial means. It can happen that efforts to help people lead to higher
inflation, which reduces the effect to zero. This is a complicated and subtle

However, many countries, many economies are facing the same problems now.
For instances, the country we are in right now, Greece, adopted a resolution on May 9 to reduce pensions instead of indexing them.

Or take our neighbours in Ukraine. We say that inflation was very high
in Russia last year – 12.9 percent. While Ukraine had an inflation of 48.7

Or take the average pension: $200 in Russia, and $76 in Ukraine. Do you see
the difference? We have at least indexed pensions by 4 percent. In Ukraine,
there is no indexation at all, and the pension age was increased.

We are trying to retain the growth of rates: 4 percent this year, 4.5,
maximum 5. Only in some regions, by decisions of local administrations, rates may
be increased by 10 percent. And what about Ukraine? The cost of gas has gone up
at least 3.3 fold. The average increase is 6.6 fold. Electricity has gone up by 60% to 70%. More than a 50% hike in hot water rates, up to 60%. And pensions have
been frozen altogether.

This is why everything is relative. We have already
said that if the economy allows it, if we have the funds, then of course we
will be looking for an opportunity to help people with low incomes. And we will
be thinking about pensioners among them, first and foremost. This is why there
can be no doubt that the Government is working on this issue and doing so in earnest.

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