Russian Prime Minister Vladimir Putin and Belarusian Prime Minister Sergei Sidorsky addressed a news conference following a meeting of the Union State Council of Ministers and Russian-Belarusian intergovernmental negotiations

Sergei Sidorsky: Good afternoon.

Today we have held a regular Union State meeting. As it has been arranged with the Russian Prime Minister, the Union Government meets every three months to discuss all matters to be settled in the Union State framework.

It was a busy meeting today, with 22 economic items on the agenda, plus general issues, technical matters, and developmental problems of new technologies and productions in Russia and Belarus at present and in the near future.

The key matter under discussion concerned Russian-Belarusian trade and the anti-crisis plan Mr Putin and I have signed for our ministries to implement.

We have acknowledged that, regrettably, we could not keep bilateral trade at its previous level in the 1st quarter-its turnover fell by 42%. This considerable fall exceeds the rate of economic depression. So we have had much to talk over. I thank Mr Putin for detailed discussion of all issues.

We have been told about the anti-crisis plan. It guarantees Russian and Belarusian manufacturers equal terms of access to the other country unless there is a commercial emergency.

The second topic concerns Belarusian corporate participation in Russian state purchasing, and vice versa.

Third, we have made a number of anti-crisis decisions-in particular, on subsidising our manufacturers' interest rates.

Our experts say they have settled state purchasing problems successfully. Other issues still remain unresolved, however. As our Russian colleagues have informed us, there are problems in banking system interaction, and in free commodity movement. We must think how to settle them in the current economic situation.

We have agreed to take up the issue again within a month, and made relevant instructions. I think we can support each other.

Belarus has advanced a number of initiatives-in particular, on tentative support of 2/3 of Belarusian manufacturing interest rates in Russia. It implies considerable expenditures but we will shoulder the burden.

Our Russian colleagues have made similar proposals because certain Russian regional governors addressed the Government with a request to expand the existing list of technical supplies to Belarus and Russia. We have heard them and made relevant instructions. The problems have been recorded in the protocol, and I think they will be resolved within a month.

There is another essential issue we have discussed-access to the external border. We have made the following decisions. Our Presidents want to establish such access since January 1, 2010. Agriculture ministers have reported that they are removing sanitary surveillance as early as July 1. It will be a reciprocal measure. Our Russian colleagues have proposed a good system of mutual monitoring of commodity movement in the veterinary territory. They have made necessary arrangements as quickly as possible. We approve what they have done.

Customs agencies and the Transport Ministries have offered a good programme that envisages removing barriers in crossing the borders within the Union State. We have made another decision-Russian and Belarusian citizens, as well as cars, will be entitled to free travel for six months without registration on the border in the vicinity of Smolensk and Bryansk.

As for the transportation of production equipment and technologies between Russia and Belarus, we have discussed it as an urgent matter today and decided that the problem will be dealt with by January 1, 2010. That is really important.

We have also discussed a number of practical programmes-on nanotechnologies, biotechnologies, and special medical preparations, including stem cells. These programmes will be implemented in Russia and Belarus soon, and will improve our export potential.

Several items concerned the development of bilateral relations, and the celebration of a historic date, the 65th anniversary of the liberation of Belarus and the Victory in World War Two. We have drawn up a plan of action for the celebration of those anniversaries, which our nations hold sacred.

We have also signed an agreement on exchanges of land plots in Russia and Belarus for the construction of projects on a mutually approved list. We are also ready to sign an agreement on the development of the nuclear energy industry. We have ordered to prepare a relevant draft treaty urgently, for the next meeting of the Council of Ministers, and a corresponding agreement will be made.

So, as you see, the entire range of issues planned for today's discussion has been addressed. I would like to thank my colleague, Mr Putin for constructive teamwork and for our progress in the development of our partnership and our national economies.

Thank you.

Vladimir Putin: Thank you, Mr Sidorsky.

Ladies and gentlemen,

The Government of the Union State has had a meeting today, its second meeting this year. I want to say from the start that unique economic relations have developed between our countries, and cooperation will continue. Belarus enjoys special energy privileges in its relations with Russia. Our Belarusian friends receive Russian energy on the lowest tariffs in the CIS and in Europe. This mainly concerns gas. Gazprom has conceded to extra support on the Belarusian President's request-it has paid gas transit charges nine months ahead, and intends to make a resolution on Belarus to pay the year's average price for gas imports.

Belarus enjoys the lowest possible rates and tariffs for importing oil, which allows it considerable exports of petrochemical and other chemical products to the West.

Belarus remains one of the principal machine and equipment exporters to Russia. Its exports include lorries, farm machinery, televisions and refrigerators.

Belarus uses its advantageous geography to great effect in commodity movement to and from it because it is situated between Russia and the European Union. We should give due praise to the Belarusian Government for that use. As I have said, our achievements of the last several years will develop further.

I would like to remind you that we have been rendering direct financial support to our Belarusian friends in these past years. We lent $1.5 billion at the end of 2007, and another billion at the end of 2008. Another credit, of $500 million, was made early this year. We are considering the prospects for further work in this vein and with the same arrangements. We will analyse the situation with our partners and exchange advice-but on the whole, this partnership in the financial sphere will continue.

We will also carry on consultations between the Central Bank of Russia and the National Bank of Belarus.

We encountered difficulties in the 1st quarter of this year due to the global financial and economic crisis. Our bilateral trade has shrunk.

We have made decisions to stop the decline and restore previous volumes. One of those decisions envisages the access of Belarusian manufacturers to Russian state purchasing auctions as Russia has spread national terms to Belarusian manufacturers.

High technologies are among the essential fields of partnership. Mr Sidorsky and I have talked about it. We have also agreed before to pay increasing attention to that field. I am glad to see that the Union Government pays considerable attention to that issue in its plans.

I fully agree that we should not shrug off humanitarian cooperation, and forget how our citizens feel in the Union State. That is why we will never turn a blind eye to questions concerning the Union-and there are many such questions in Russian-Belarusian relations.

We will certainly prepare together to celebrate the 65th anniversary of Victory in World War Two.

Thank you.

Question: What do you think of the forecast the Russian Finance Minister made today that the Belarusian economy might become insolvent by the end of the year?

Vladimir Putin: An American writer whom Russians and Belarusians like equally said once: "The rumours of my death have been greatly exaggerated."

I don't think extreme opinions are appropriate. Mr Kudrin was referring to the amount of loans Belarus had taken out in the preceding 5-6 months-a sizeable sum: more than $3 billion.

He urged us during the discussion to pay greater attention to the development of industry so that our finances would correspond to the current situation, with its global financial and economic crisis. But, I stress, whatever happens in the world economy, Russia will always give Belarus a hand if need be.

Sergei Sidorsky: I will comment on what was said in the presence of our President Alexander Lukashenko. Mr Putin thinks highly of the Belarusian economy and Belarusian Government's work on the national anti-crisis plan to maintain the economy at a high level. The gross domestic product increased by 10% last year. Now, it has not gone down. On the contrary, it has increased by another 1.2% despite the financial downturn.

Our entire economy is concentrated in this index. It shows that these are hard times. But, even during the restricted meeting, Mr Putin said once again that it was a very good index for an economy that has no raw material resources presently. Really, Mr Putin, that was what you said.

Vladimir Putin: Yes, I did.

Sergei Sidorsky: It is hard to achieve economic growth in such adverse conditions. As for our trade, there are problems with markets and exports-we have discussed it today. So imports are accumulated. We know it. But then, the reason why we meet is to resolve problems.

So I agree with Russian President Dmitry Medvedev that we should work harder and make fewer forecasts. It is very important to get jobs done-jobs that the Presidents give us Prime Ministers and we to our ministers.

The Belarusian rouble still retains great stability in the corridor we have set it. As for inflation, as you know, it was 0.4% last month-less than in any other CIS country. All that shows we are effective managers of our economy and the resources at the Government's disposal.

Vladimir Putin: Belarus is also one of the few countries where the GDP is growing-and possibly the only CIS country. Your GDP has a growth rate of 1.1% or even 1.5%, according to the latest information. GDP is falling in all other countries, and Russia is no exception. Our Finance Minister, a man of liberal views, is simply telling us that the fiscal policy should respond to corrections we all have to make in our economic policy, especially during a crisis.

Sergei Sidorsky: Thank you.