Transcript of the beginning of the meeting:

Vladimir Putin: Mr Shmakov, you and I do not meet very often, but we do meet regularly, which allows us to share information on the current situation in the economy and labour market. I also see you at all meetings of the government, which you practically never miss.

Mikhail Shmakov: I try.

Vladimir Putin: I‘ve noticed. We also exchange opinions and information on the current situation at those meetings. As you can see, the situation in the economy is improving, but there are still quite a lot of problems.

Mikhail Shmakov: Unfortunately, the labour market is falling behind, since...

Vladimir Putin: Yes, the labour market is falling behind a bit, although there has been a general decrease in the number of unemployed, both registered and overall.

Over the last week, in 48 constituent entities of the Russian Federation, we have seen a decline in the total number...

Mikhail Shmakov: Of registered unemployed people.

Vladimir Putin: Yes, registered unemployed. There was a slight increase in 14 regions, however. But the overall trend is positive.

Mikhail Shmakov: Our analysis of the enterprises that we are monitoring shows that, unfortunately, unemployment has still not fallen significantly. Moreover, overall unemployment increased in the first half of the year, if we calculate it according to methods set forth by the International Labour Organisation. Should our financial markets and industry recover, we can expect a decline in unemployment in the second half of the year.

Vladimir Putin: But still, this year unemployment is less than last year, even though it fluctuates weekly.

Mikhail Shmakov: Yes.

Vladimir Putin: We allocated over 13 billion roubles in subsidies to 81 Russian regions to support labour markets.

Mikhail Shmakov: Last year the programmes to retrain those who lost their jobs or are at risk of losing their jobs proved the most effective. Almost 100% of people found a new job after having been retrained. Experience shows that this measure is the most effective in the labour market.

On the other hand, mass lay-offs are planned at some companies, in part because there are not enough orders. AvtoVAZ has dealt with this problem successfully, but the situation is critical at Uralvagonzavod, for example. A programme has been developed to help out this company, but the situation there is even more tense than at AvtoVAZ.

Vladimir Putin: Let's discuss this issue in more detail. Because Uralvagonzavod should have received enough orders from us, Russian Railways and other freight transportation companies to support it for the coming year.

Mikhail Shmakov: Before the recession they produced and shipped about 70 railway carriages daily. Today orders have fallen by one third, or even more. They are now increasing a little, and the support programme has started to work again. But we still have concerns.

Vladimir Putin: I visited this facility, and I've been in touch with the company's leadership. Uralvagonzavod is a backbone company for its town and the industry.. It's one of the most high-capacity production facilities in Russia, not to mention the Urals. I suggest we discuss this issue as well.

Mikhail Shmakov: Yes. I also ought to say that, unfortunately, the Ministry of Defence often fails to meet its obligations.

Vladimir Putin: You mean military contracts?

Mikhail Shmakov: No, its salary obligations. They are 12 months behind at several naval repair shipyards. We wrote to everyone, even the Minister of Defence. It only remains to write to the Prosecutor General to ask for his help.

Vladimir Putin: Strange... It's rather strange. The ministry received all necessary funds from the budget.

Mikhail Shmakov: We also find it strange, but still...

Vladimir Putin: Let's go over the list.

Mr Shmakov also thanked Mr Putin for signing a government executive order allocating 75.2 million roubles to train specialists in labour and social conflict prevention. This training will take place at the St Petersburg Humanitarian University of Trade Unions.

Prime Minister signed a relevant executive order.