Transcript of the beginning of the meeting:

Vladimir Putin: Mr Mironov, we are going to actively discuss the adjusted version of the budget for this year and anti-crisis measures in the near future. I have already had a chance to discuss this with you. I'm sure members of your party in the State Duma have familiarised themselves with this programme.

I'd like our discussion to be very extensive and businesslike, and as depoliticised as it is possible in Parliament. I realise that there will be some degree of politicisation but I'd very much like to make sure that all MPs in the Duma and the Council of the Federation focus the discussion on the current reality and propose effective measures for overcoming the problems.

I know that your party colleagues have their own views that often do not coincide with the opinion of the Government or of United Russia. I'd like to find a consensus on the proposed measures. For my part, I told my Duma colleagues with whom I met today that the Government is not only ready to hear a different opinion but also make adjustments if we all believe that these adjustments will help tackle the complex challenges facing the country today.

Sergei Mironov: Thank you, Mr Putin. You are absolutely right. Our party, Just Russia, has its own opinion about the anti-crisis measures and the adjusted draft budget that the Government is submitting to the State Duma.

But before I say what we agree and what we disagree with, I'd like to make an unbiased remark about the Government's efforts to carry out anti-crisis measures under your leadership. One thing is absolutely clear - you personally show an example here, and your deputies are following it. You have been touring Russia and discussing problems with people in the regions. This is noticeable, and we believe that this is right.

Now I'll speak on the substance of the matter. We have divided the Government-proposed measures into three groups. We fully agree on the first group, and believe that the second group should be expanded to improve some of the Government's proposals. We object to the measures in the third group but being in opposition to United Russia, we proceed from the simple rule - criticise and propose.

We have specific proposals and believe that they should be considered in our further joint efforts. I'd like to say right away - in the preamble to the anti-crisis measures you have listed seven priorities. We have no objections to any of these, including the order in which they are placed. The Government has got its priorities absolutely right. Your first priority is commitments to the people, that is, resolution of social problems. We also believe that social protection of the people should come first.

Now I'd like to say which anti-crisis measures have room for improvement, and what we'd like to suggest. First of all, this is housing and housing construction. We propose resolving the mortgage problem. What the Government suggests for those who have got into a predicament is good but it has not yet passed a final verdict on the draft that we submitted to it a year ago. I am referring to new formats, such as "building societies". You know that this non-bank credit mechanism is very effective in the whole world, primarily in Europe. Our draft is based on Europe's best experience but considers Russian realities.

We have prepared our second proposal recently and have just submitted it to the Government. It deals with a so-called non-profit housing fund. In other words, it is about housing that the Government will build using the money of budgets of all levels - federal, regional, and municipal. Flats in these buildings will be leased not on the basis of social rent, when the Government shoulders a heavy burden by fully paying for the upkeep of housing and future capital repairs, but on the principle of non-profit rent. In other words, it will charge for them two or three times less than private owners do but those who will live in these flats will pay for the upkeep of the buildings and for future capital repairs themselves.

Our third position coincides with the Government's proposal to restore building cooperatives. We support it.

Our next proposal is to introduce a tax on luxuries. The gap in incomes between different groups is huge - more than 15 times. It is still possible to consider some variants of the flat income tax. We remember the Government's commitment to guarantee the immutable 13%. Therefore, we suggest that people with the lowest incomes should pay less, and that the ceiling should not be raised for the time being although our draft proposes a reduction for the former and an increase for the latter.

We have certain proposals concerning community work as well. It was as far back as last October that you personally spoke about the need to introduce community work in the regions. This calls for financial allocations and 43 billion will now be earmarked for re-training. But we wonder what professions will be involved in this re-training. We don't have a clear vision of what skills and occupations will be in demand. We believe that creating conditions for community work on the basis of the already existing companies that specialise in repairs, road construction, housing and public utilities is what the Government should map out. Guarantees and opportunities, including financial ones, should be provided so that people can earn a living. But the Government and we believe that the industrial production will start to grow and we will have economic growth. For the time being, however, people simply have to support their families and earn money in some way.

On the whole, when speaking of our criticism of the anti-crisis programme, we consider that, in terms of macroeconomics, too much space is devoted to inflation. It ranks seventh in the government priorities but when we read about the anti-crisis measures, it is an obvious leader. We know your train of thought and the logics of the Government dubbing everything else as secondary to inflation. Still our opinion is that social security is the main priority, while macroeconomic indices are secondary in the present situation. In short, these are the main proposals and critical remarks.

And I would like to emphasise once again that we have been following your efforts in promoting the anti-crisis programme-your efforts and those of First Deputy Prime Ministers Igor Shuvalov and Viktor Zubkov, and also those of Sergei Sobyanin. We, the Chamber of the Regions, are getting signals from around the country.... All the trips to the regions, including the Far East and Siberia, are very positive. People really want the Government to explain clearly what measures are being taken.

Even the fact that we are discussing all this with you is very positive. The position of the party and the Government must be transparent. People should be aware of various viewpoints and proposals. When it comes to making final recommendations, I hope that, among other things, the proposals of my party, of Just Russia, will be also taken into account.

Vladimir Putin: Mr Mironov, let us now discuss your recommendations in some more detail. But first I'd like to make two remarks.

First, the Government's first priority is keeping social commitments to our citizens. The problem is how to fulfil these priorities without failure. We believe that emphasis on the observance of macroeconomic parameters is what we need above all for at least two reasons. First, to make it possible for us to recover from the crisis, not protracting the slump, and we cannot achieve this without observing macroeconomic parameters. If we fail to do this, if we allow uncontrollable inflation, if we ruin other macroeconomic parameters, this recovery will be too slow. This is the first point.

In addition, we think that our social obligations cannot be fulfilled by simply raising pensions and wages, with the inflation just eating up people's real earnings. This would be just deceiving people. Therefore, we have to be very responsible, analysing jointly all the measures proposed and seeking most successful rather than easy solutions.

I'd like to make one more remark that concerns a specific proposal bearing on the non-banking forms of issuing loans to individuals. Such forms exist, both abroad and in this country. Naturally, with the crisis hovering over us, we have to give all this a proper scrutiny.

Why? Because we already have such forms in this country - something like mutual crediting partnerships - this is a non-banking system. But an insight into this system makes it clear that things don't go well there. Many people who have deposited their funds in these partnerships are now facing a very difficult situation: Not only is it impossible for them to get a loan from these organisations, but they also have no chance, or very little chance, of getting back their money. We need to think about what can be done and how we can help these people. This issue is known, but before something is done we have to examine the realities. Let us have a closer look.

Sergei Mironov: The bill on construction savings associations spells out the distinctive features of such mutual crediting partnerships: They must either be under the Government's control or the Government must have a share in them. This is an essential distinction because you are absolutely right: If these regulations are not applied, there will be many violations and people will not want to take the risk. Only if people are sure of the Government's control or participation will they be ready to get involved.

Vladimir Putin: Let us think this over. We will also need funds for this.

Sergei Mironov: Yes, we will.