Prime Minister Putin's introductory remarks:

We often work together through the Trilateral Commission, where the federal government is represented by Mr Alexander Zhukov, who I'm sure you know pretty well.

Today is his birthday, and I'd like to wish him a happy birthday on my behalf and on your behalf, and also give him this gift. It's a painting, A House in a Village by the River (presents painting). This is not just from the Union of Agricultural Workers, it's from all of us.

Ladies and gentlemen, Mr Shmakov,

Our regular meetings are always useful. An open exchange of opinion helps us resolve the most important issues for the development of the labour market, employment, wages and social protection.

This was the case during the challenging period of the global economic crisis, when trade unions and the government implemented a series of measures to stabilise the economy, as well as social and labour relations.
I hope we'll continue our useful and constructive work together.

As you know, yesterday the government met with metal producers and manufacturers of other fundamental commodities to discuss prices and tariffs.

The government articulated its position on these problems. Price hikes and unilateral acts by individual economic entities must not disrupt companies' stable operation, slow down economic growth or affect ordinary workers.

This is why we worked with businesses to coordinate a series of measures to curb inflation and make prices more predictable and stable in key industries.

We continue to work with businesses on these issues, while taking into account the interests of producers and consumers. We have entered into long-term contracts based on the terms and pricing formulas for basic goods that we coordinated with businesses. As you know, we have reached a relevant agreement with all parties involved.

The government has also outlined a series of practical measures to slow price and tariff increases - measures I very much think will work - including prices of natural monopolies and the housing and utilities sector.

Coupled with the consistent policy of the Central Bank, which has decreased its refinance rate to a record low of 7.75%, these measures should create favourable conditions for economic recovery and post-recessionary growth.

As a whole, these measures should have a positive impact on the economic situation and ordinary people's real incomes.

Ladies and gentlemen,

It is no accident that I am focusing on yesterday's meeting with business representatives. The decisions made at the meeting concern ordinary workers and provide guarantees for stable work in key sectors of the economy, and consequently society. Also, these decisions show the logic of our approach.

We seek the right balance between producers and consumers and consider unilateral action and violation of agreements unacceptable. We believe that a sustainable development and successful economic modernisation are possible only in a stable society where trade unions and employers work as partners. I would like to base our discussion today on precisely these principles.

First, I'd like to bring up the issue of the possibility of higher wages, especially in the real sector of the economy.

I'd like to underscore that the government believes that it is absolutely necessary to increase wages, all the more so because during the recession many workers saw their incomes dwindle. And of course, everything must be done to ensure that families' living standards begin to rise again.

At the same time, we have to admit that many Russian production facilities have become obsolete. Without extensive modernisation and introduction of new technologies, employers will be unable to pay their employees as much as they did before the downturn. This is why wage increases must be linked with investment projects and increases in labour productivity. I'd like to remind you that the minimum monthly wage was set at 4,330 roubles on January 1, 2009. That's a twofold increase compared with 2007. This increase was scheduled before the recession. And we didn't renege on it, even though the situation changed radically.

Clearly, we'll return to the issue of raising the minimum wage as soon as we start growing steadily again. I believe the Trilateral Commission should discuss this issue to develop a coordinated position on the timeline and rate of increase.

Second, as you know, we're implementing a large-scale healthcare modernisation programme.

We should proceed from one obvious fact: only 30% of people are satisfied with the quality of medical services. Meanwhile, people want to be sure that they will be treated properly if they go to a doctor, and that doctors will not extort money from them for every service.

Raising premiums for mandatory medical insurance will help raise significant funds, some 460 billion roubles in 2011 and 2012. We plan to use these funds to improve the healthcare system, fix hospitals and clinics, provide them with modern equipment and improve emergency services. A total of 300 billion roubles will be allocated for this purpose.

We'll also increase spending on drugs, diagnostics and salaries for medical personnel. A total of 136 billion roubles will be allotted for this.

The reform must result in more accessible medical services and lower disease and mortality rates.

I believe that the Union of Medical Workers could play an active role in developing regional programmes to modernise medical institutions. Your perspective must be taken into account.

I'd like to draw all your attention to the issue of modernisation. We'll provide support above all for the institutions that are ready to implement modernisation programmes.

Of course, we're also planning to increase allocations for salaries throughout the public sector, but, as I said before, we'll only be able to make the final decision on the timeline and parameters of these increases in autumn, when it becomes clear in what state the economy is, and when the draft budget for the next year and budget amendments for the current year are prepared.

We'll also decide on the nature of the pension increase in autumn.

Third. The recent tragedy at the Raspadskaya coalmine revealed evidence of blatant disregard for safety standards at facilities whose operations entail increased danger. Unfortunately, this is far from an isolated instance.

As you know, I issued a series of directives changing the formula for miners' remuneration, making it less dependent on production output.

Moreover, the use of funds specifically intended for safety standards will be monitored, and additional measures will be introduced increasing the liability of coalmine owners, including through the use of liability insurance.

We cannot cut spending when safety and people's lives are at stake. And here the principled position of trade unions to demand unconditional adherence to safety standards is especially important. Moreover - and I want to stress this - this means adherence by both employers and employees.

Trade unions can do this. We all know how the coalminers' trade union managed to successfully push through a special law providing additional pension payments to miners. This law increases costs for business owners. I find this 6.7% increase quite acceptable. This is an additional contribution, and these funds will supplement pensions for miners who work underground. An average increase in miners' pension is expected to be 7,700 roubles per month.

Fourth. This year the General Agreement between the government and national associations of trade unions and employers expires. This agreement has proven to be quite useful, for instance allowing us to quickly adopt the recommendations for cooperation between social partners during the economic crisis.

Naturally, the government is interested in signing a new General Agreement as soon as possible, an agreement that will outline specific areas for development of social partnership for 2011-2013, including by improving procedures for reaching and implementing collective bargaining agreements and settling labour disputes, as well as by establishing a system to monitor factors leading to social tension in the workforce. This is always important, but it is doubly important during the economic downturn and as we come out of the downturn.

We will also work consistently to incorporate International Labour Organisation regulations into Russian law. Three International Labour Organisation conventions were brought before the State Duma in late May. They deal with the paid holidays, protecting the rights of employees in the workplace and assistance for collective bargaining. We are also preparing to ratify another 11 conventions.

At the same time, we believe that not all of the conventions need to be ratified. For instance, in a number of cases the Russian labour and social legislation has higher standard for workers' protection, or there are already a number of more up-to-date international standards in place in specific fields. Thus some conventions are outdated and irrelevant for Russia. Nevertheless, we will of course address these issues and discuss them with you. We will work with you and the deputies in the State Duma to address these issues, so that it does not seem as if we consider these standards up-to-date and new, while the trade unions have a different point of view. We will work in close contact with you to address these issues, as has become the established practice.

Ladies and Gentlemen,

Naturally, my opening address did not touch on all the issues that the government and the trade unions need to discuss.

For instance, we value your opinion of the effectiveness of the policies to support employment, including regional programmes to reduce the strain on the labour market. And I must say that last year we managed to defuse the situation in the labour market thanks to the implementation of these programmes and the insistent but reasonable policies of the trade unions. Once again, I would like to express my hope that we will continue to work together well into the future. Thank you for your attention.