Vladimir Putin's opening address:

Good afternoon, once again. We have gathered here today in order to discuss preparations for drafting the federal budget for the 2010-2012 period.

Our task is to discuss the most pressing mid-term issues and problems.

The key priority for next year is an increase in pensions, followed by education, demographic projects and healthcare. We must focus on efforts to ensure the country's defence capability and security, implement space research programmes, and establish the GLONASS system. We must also help the regions to support their budget balance and prepare for major international events, such as the 2014 Winter Olympics in Sochi, the APEC summit in Vladivostok in 2012 and Universiade-2013 in Kazan.

It is obvious that in order to set [budget] priorities in the current conditions, we must optimise and, let's put it straight, cut spending in less important areas. Considering the need to reduce budget deficit, the policy of cutting spending must be continued in 2011 and 2012. Our main challenge is the effectiveness of the budget. We must find a way to get the best results for our efforts.

Naturally enough, we must directly target social expenses and launch reorganisation of the network of budget-financed institutions. We still have [more than] enough of such institutions, whose work produces no tangible result.

Only by providing quality management of state finances will we be able to meet our social commitments, maintain macroeconomic stability and keep budget deficit within acceptable limits.

This is why I ask you to display maximum responsibility when distributing funds for concrete programmes and to check all the figures once again. You remember that the Government asked the deputies to postpone the discussion of the budget until October 1. According to the new schedule, we must approve the key budget targets on July 30 (we have only a month and a half left) and to prepare the draft budget in August or September.

I ask you to properly organise your time and not to deviate from the schedule.

We will have the same sort of an extended meeting to decide the key issues.

Let us begin our work, please.