Banking & Finance Weekly Report.
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The European Commission has passed amendments to the European Union’s legislation, thus paving the way for the recognition of Russia as a market economy, the press and information division of the commission’s office in Moscow reported. The amendment was passed at the commission’s meeting on Monday, but will not become law before the European Council endorses it in the fall, an official of the division told Interfax. The commission passed two amendments. Under one, in carrying out anti-dumping investigations, the EU will use the cost and price data submitted by Russian companies, rather than as estimated by third countries, as is done now. An amendment to the subsidies legislation outlines a rule under which the advantages of subsidies to exporters will be calculated. It also adapts EU legislation to decisions made by the World Trade Organization on differentiating certain kinds of subsidies. The EU effectively abides by these decisions, the European Commission reports. In a broader context, this step is a major landmark in Russian efforts to join the WTO, the report says. The EU expressed its willingness to give Russia market economystatus at a summit in Moscow in May. At that time, European Commission Chairman Romano Prodi said Russia may receive full market economy status as early as in the fall. FINANCIAL POLICY GOVT. APPROVES 2003 BUDGET DRAFT The Russian government approved the draft federal budget for 2003 at a session on August 15, Deputy Prime Minister Viktor Khristenko told the press. The government gave instructions for the draft budget to be submitted to the State Duma by August 26, Deputy Prime Minister and Finance Minister Alexei Kudrin has said. The budget will be met regardless of economic developments, Kudrin said. “We have to be prepared for any scenarios, so we plan measures that will help us meet the budget if a pessimistic forecast comes true,” he remarked. The budget will be tense next year, Kudrin said, and the risks are related to the condition of the world economy. The budget provides for the stability of the ruble exchange rate. The average exchange rate for the year is set at 33.7 rubles to the dollar, Kudrin said. It is planned to cut inflation to 12% in 2003, Kudrin said. “I think inflation will keep within the 10% to 12% parameter,” he remarked. Taxes will be cut at all levels of the budget system, industries will be promoted, it will be possible to enlarge production, and investment possibilities and chances to create new jobs will mount in 2003, Kudrin said. As for spending priorities in the federal budget, he said, financing will increase in defense, law-enforcement, social policy, court reform, science and education. At the same time, non-interest spending will decline with respect to GDP. |