Accessibility links

Breaking News

Pro-Putin Deputies Slam Russian Finance Ministry

Finance Minister Aleksei Kudrin
MOSCOW (Reuters) -- Deputies from the pro-Kremlin Unified Russia party have criticized the Finance Ministry for overspending, a move which could put further pressure on veteran Finance Minister Aleksei Kudrin.

An open letter signed by some prominent deputies was posted on December 15 on the website of Unified Russia,, which has a two-thirds majority in the lower house of parliament and previously voted for Finance Ministry budgets.

"The speed of spending the money we have been saving for years forced us, a group of deputies from the Unified Russia faction, to openly state our opposition to the policy carried out by the Finance Ministry's bureaucrats," the deputies wrote.

Prime Minister Vladimir Putin, a leader of Unified Russia, authorized an over $200 billion plan to support the economy, but the deputies said the money is not being spent efficiently.

They said the money went mostly to large corporations and banks, which converted it into foreign currency because, with the ruble being gradually devalued, this was more profitable than to invest or issue loans.

Only On Paper

Putin and President Dmitry Medvedev used verbal attacks on banks and threatened to cut off government support, but with the ruble down 19 percent against the dollar since its July peak, the warnings were ignored.

"It looks like the orders of the president and the prime minister are fulfilled only on paper," Alexander Khinshtein, one of the letter's signatories, told a news conference.

Instead, the deputies propose to raise direct subsidies to the citizens through higher pensions and public sector wages. They also sought to cancel the planned increase in regulated prices, such as domestic tariffs for gas and electricity.

The influence of Kudrin, finance minister since 2000, has risen since the crisis started and his harshly criticized policies of saving windfall oil revenues for a rainy day proved right, enabling Russia to face the crisis fully armed.

However, several recent incidents, such as criticism of the Finance Ministry from Medvedev over a delay in drafting a law which will enable the Central Bank to place agents in commercial banks, suggest that Kudrin's opponents are gaining ground.

Russia, whose economy grew at an average rate of 7 percent in recent years, is facing an abrupt economic slowdown and Deputy Economy Minister Andrei Klepach said last week the country was already in recession.

The signatories of the letter belong to a so-called populist wing of the party, with some 2 million members. The deputies said they want discussion but still trust their leader.