Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon,

First of all, I would like to thank our Belarusian colleagues for fruitful joint work during the meeting today. The general constructive mood enabled us to discuss topical issues of cooperation within the Union State, including the economic and social spheres.

We have reviewed the interim results of our integration work. One key result is the positive dynamics of trade and economic relations and interaction in this sphere between our countries. Mutual trade last year - as I mentioned to the press today - increased by 30%. And in the four months of this year the increase has already been much greater; the figure stands at more than 60%.

These results prove the effectiveness of the mechanism of our economic cooperation based on more extensive use of market instruments.

I am convinced that we must move further in order to tap the full potential of the two countries and use their significant resources. We should step up our work in all areas. The various Union State structures must act more efficiently and with greater commitment. Today we discussed it in some detail first in a one-on-one meeting and then in an enlarged format together with the other colleagues.

This is the only way if we are to elevate the relations between the two countries to a new level and make substantial progress towards creating a common economic space.

An integrated transport system of Russia and Belarus is one of the key ingredients of the success of joint economic projects. We have agreed that the issues connected with enhancing its effectiveness will continue to be discussed as a matter of priority.

During the meeting we had a detailed discussion of budgetary matters. The main parameters of the Union State budget for 2009 have been approved. They are to increase further, above all in favour of our cooperative programmes and links. We attach particular importance to addressing the issues connected with the Union property because we believe that after all the questions are finally settled, it will be easier to invest in the programmes that involve such joint property.

We have also discussed social issues and reviewed progress in the implementation of the Russian-Belarusian agreement on cooperation in the field of social security. We have identified the steps that are necessary to implement it. In this connection I would like to say that the most sensitive and probably the most important issues are the pensions of Russian and Belarusian citizens. I am pleased to note that we are moving forward in a coordinated manner and are approaching these tasks in a positive way. We are coming to grips with these tasks. We will continue to give due attention to this issue.

In conclusion I would like to express satisfaction with the results of the meeting today, to thank Mr Sidorsky and all the Belarusian colleagues for the constructive joint work, for the highly positive mood and the spirit of cooperation, mutual understanding and the willingness to compromise.

Thank you very much.

Sergei Sidorsky: We, the Belarusian side, would like to confirm that under the auspices of the Union Government we are tackling more and more programmes and concrete issues which promote the integration of the Belarusian and Russian economies. Today we were pleased to note that trade between our countries exceeded $11 billion in the four months of the current year compared with the total $26 billion in the whole of last year.

In other words, our economic managers have created all the prerequisites for trade between our countries to exceed $30 billion. This is a realistic target. But it must be backed up by programmes and actions.

The previous meeting of the Union Government considered a series of programmes. Today we examine the programmes for the development of microelectronics and the creation of large integrated chips. Composite polymer materials are a very serious problem, which extends into 2010.

All this lays the foundation for the interaction of Russian and Belarusian companies in the production of new high-quality modern equipment for our industries. Innovative development of the Belarusian and Russian economies is becoming more than just an idea, it is backed up by concrete actions, a concrete programme that is implemented and will be implemented in the near term.

Today Mr Putin and I reviewed the 2009 budget and issued corresponding instructions so that it should increase by at least 25% compared with this year's budget and is invested with concrete content. That must include social issues which we discussed today and in relation to which we approved a corresponding programme. Beginning from 2008-2009 they will be reflected in the state budget.

In general, as Mr Putin has said, we have discussed the whole range of problems, transport and customs infrastructure. These are serious issues which dictate further interaction in the development of integration processes in the Belarus-Russia Union State.

Thank you.

Vladimir Putin: Thank you.

Question from the audience: Mr Putin, did you watch the football match yesterday?

Vladimir Putin: I did.

Question from the audience: Well, what do you make of it?

Vladimir Putin: Mr Sidorsky and I have discussed it. We touched upon that subject too. I don't mind telling you that millions of fans in Russia, including myself, expected a miracle. We expected that our team would win the semi-finals and the finals, and win the European Championships. The miracle did not happen.

Even so, I would like to thank and congratulate the chief coach, Mr Hiddink, and the whole team on their result. Because being one of the four top teams in Europe is a great result. I would like to thank them for the brilliant game and their dedication.

Our team is young, they gave us hope that in future we will be able to claim the top steps on the victory podium. And being a young and promising team they can expect to do well in the future World Championship. We will wait for these victories and not just bank on good luck, but on steady, effective work according to a plan, the kind of work that is always crowned with success.

Once again I would like to thank all the players. But I would also like to thank the fans. I think the victories - the brilliant victories - scored by our football team have not only contributed to patriotism. They gave a chance to our fans to put their best foot forward. Unlike other fans their behaviour was very dignified. I don't want to shut my eyes to some incidents, but on the whole they behaved in a very civilised way and they managed to support their team and, I repeat, do it in a very dignified manner.

The championship has shown that Russia is regaining its high positions in that sphere as well. So I personally enjoyed the championship as a whole. Once again I would like to thank the athletes. Thank you.