Transcript of the beginning of the meeting:

Vladimir Putin: Mr Sidorsky, esteemed members of the Council of Ministers,

I am glad to welcome all of you here. First of all, I would like to congratulate our Belarusian colleagues on the approaching holiday, Republic Day. Please convey my wishes of great success and prosperity to the friendly people of Belarus.

During the recent meeting in Brest the Presidents of our countries confirmed the mutual commitment to the deepening of partnership. Now we face the common task of securing the implementation of that course. We chose that course long ago, it is being consistently followed and I am sure that there will be no slip-ups in this work. We have to invest it with new ideas and initiatives.

By signing a series of trade and economic agreements last year we went a long way to update the legal framework of our bilateral ties. The growth of mutual trade is a measure of the effectiveness of our joint efforts. Between January and April this year it increased by more than 64%. We have just been recalling together with Mr Sidorsky that last year we achieved a growth of 30% and we were happy to note that trade had increased by 64% in the first four months of this year. It is important to keep up that pace.

At the same time we still face many challenging tasks that call for prompt decisions and vigorous actions. Above all they have to do with the creation of a common economic space and a fully-fledged customs union, as well as removing the obstacles that hinder our integration.

The implementation of trade and economic agreements, securing equal rights of citizens, compliance with the agreement on the Union property will take integration processes to a qualitatively higher level. Additional opportunities are opening up for successful social and economic development of our two states.

So we expect the relevant Russian and Belarusian agencies to show responsibility and commitment in addressing all these problems.

Among the main topics of our meeting is the range of budgetary issues. The key parameters of the draft Union State budget for 2009 should be the focus of our attention. In my opinion, the emphasis should be put on ensuring more effective use of budgetary money allocated to joint cooperative programmes.

On the whole the time has come to present new requirements to the formation of the Union State budget. We are entitled to expect it to be replenished not only by the contributions of the parties, but by financial proceeds from the use of common property. Mr Sidorsky and I have agreed that we need to quickly settle all the formalities connected with this problem.

Today we will hear a progress report on some current programmes in such areas as the development of the customs infrastructure, industry and environment.

I agree with our Belarusian colleagues that we must closely follow everything that is happening inside our countries. Our Belarusian colleagues have paid attention to the Russian Government's plans of sweeping reorganisation of our customs operations, the creation of a "one stop" customs system that would integrate the representatives of other ministries and agencies and facilitate all these procedures for economic agents. We would very much like to do it jointly in a coordinated manner.

Of course the key task is still to promote the well-being and social security of Russian and Belarusian citizens. We must have a substantive discussion of measures to implement the agreement on cooperation in the field of social security and the inter-governmental agreement on medical assistance.

And now let us move on to our agenda.

Sergei Sidorsky: Thank you. Mr Putin, esteemed members of the Council of Ministers of the Union State, participants in this meeting,

We have gathered today midway through 2008. Its main result is the growth of trade and economic interaction between Belarus and Russia. Mr Putin has already noted, and we have stated it in our narrow-format meeting, that our trade amounted to over $11 billion in four months of the current year, a growth by over 60%. That is a very good result based not only on the mutual contractual obligations of economic and business entities in our countries. It is heartening that more than 18,000 Belarusian and Russian enterprises are working under deep-cooperation schemes, more than 5 million people are engaged under joint programmes of supplies of Belarusian-Russian products.

I would single out the successes of the Minsk Tractor Plant, the Yelabuga Automobile Plant, which assembles more than 2,000 tractors in the Russian Federation. A major agricultural machine-building project is being implemented in Bryansk and similar projects are already in operation in Barnaul and Nizhny Novgorod.

BelAZ and Silovye Machiny in St Petersburg last year developed a breakthrough project for the production of a powerful engine for our giant trucks. The plant will deliver complete trucks.

Gorelektrotransport (St Petersburg) and MAZ are implementing a major project to build modern buses and trolleybuses in St Petersburg.

Last year under the auspices of the Union Government we signed a general cooperation agreement with AFK Sistema that will take Belarusian-Russian enterprises to new frontiers in the development of high technologies. We are completing the preparation of a similar major agreement with Rossiiskiye Machiny. The agreement will be presented for signature to both sides shortly. All this attests to the strengthening of the economic cooperation between Belarus and Russia in the framework of the Union State.

Let me note that last week, on June 22 - Mr Putin and I have just discussed it - President of the Russian Federation Dmitry Medvedev visited Belarus. It is symbolic that the Presidents met at the Brest Fortress, where Soviet Army soldiers of more than 30 nationalities fought shoulder-to-shoulder to defend our Homeland in the early days of the Great Patriotic War.

The joint declaration on the results of the talks between our Presidents noted that the lessons of the past provide a solid foundation for jointly combating any manifestations of racism, aggressive nationalism and xenophobia.

The Republic of Belarus and the Russian Federation resolutely condemn any attempts to rewrite history and revise the results of the Second World War. The Presidents of Russia and Belarus stressed the need to show constant concern for the veterans of the Great Patriotic War and those who worked for the war effort in the rear, noted the importance of perpetuating the memory of the heroes of the Great Patriotic War and of patriotic education for young people.

Russia and Belarus are preparing to hold festive events to mark the 65th anniversary of victory in the Great Patriotic War. On July 3 - and I thank you for your congratulations, Mr Putin - we will mark an important national holiday - Independence Day, which is the Day of the Liberation of Belarus from the Nazi invaders.

The freedom and independence of our country is the result of the common struggle of our fraternal peoples against Nazism. Belarus honours and remembers all those who liberated our country. We are immeasurably grateful to the Russians, the veterans of the Great Patriotic War for their contribution to the common victory.

During their meeting in Belarus the heads of our two countries reaffirmed their commitment to the course for developing profound integration processes in every area. It is important to note that mutually beneficial cooperation is promoted not only by summit meetings, but by regional contacts between government representatives, cultural and scientific bodies as well as non-governmental, veterans', women's and youth organisations.

This year a number of delegations from Russian regions have visited Belarus. In turn, Belarusian delegations took part in the St Petersburg economic forum and other events in St Petersburg, the Leningrad and Samara regions.

Active work continues to implement Union programmes and measures financed out of the Union budget. This year the Union budget will exceed 4 billion roubles. The Belarusian Government is strongly in favour of a substantial increase of Union projects.

We believe that it is possible, on a priority basis, to prepare 10-15 major innovative projects in the economic, transit, transport and logistical, military-technical and other areas, which will not only strengthen integration but will be a further powerful factor of the social and economic development of our countries.

The Council of Ministers of the Republic of Belarus supports the proposed development of a new modern transport infrastructure on the territory of the Union State.

The two Presidents have backed the creation and have instructed us to start work on a modern transport artery Europe-China and other innovative projects. In our opinion, they may be included in the general programme of the activities of the Union Government in the near term.

It is important that today we will consider packages of documents and, as Mr Putin has pointed out, that includes the development of the customs and transport infrastructure. Today we had a close look at the programme of infrastructure development. One of the issues will be on the agenda of the Union Government.

Mr Putin, I would now like to ask you to accept the proposed agenda and get down to the discussion of the issues.

Vladimir Putin: Thank you very much, Mr Sidorsky.

Let us start our work.