NEWS

Prime Minister Vladimir Putin spoke before the tenth congress of the pro-Kremlin United Russia party on Thursday. In the speech, Putin concentrated on economy and said that though Russia is less seriously affected by the global financial crisis than some other nations, urgent measures are needed to help the population confront the possible negative developments.

Russian television broadcasted abstracts from the speech delivered in a huge circular hall where the Prime Minister was surrounded by cheering United Russia supporters. Putin is not a member of the party, but holds the post of its chairman. United Russia's party course is based on the so-called Putin's plan.

In the beginning of his speech, Putin said that the reason behind the ongoing global crisis was due to U.S. recklessness, which made the current crisis "impossible to avert."

"Cheap money doping and mortgage troubles in the United States have caused a real chain reaction, paralyzed the global financial system and brought global distrust to the market," the Prime Minister said to loud cheers.

Russian Presi­dent Dmitry Medvedev also blamed the United States for the financial crisis in his first ever address to the Federal Assemble that was delivered earlier this month.

Putin went on to say that "low diversification of the national economy and its low efficiency" made Russia more vulnerable than it could otherwise have been. He also said that he was confident that Russia would emerge stronger from the turmoil.

"We can and must come out of the global instability stronger and more competitive," he said.

Putin told the party he has headed since he stepped down as president last May that the Russian government would allocate over 50 billion rubles (about $2 billion) to support and protect the defense sector from bankruptcy.

Russia will also issue loans to China and India for purchases of Russian equipment, the prime minister added.

"A decision was made to allocate $1 billion to the International Monetary Fund to assist countries in a particularly difficult financial situation. We will also issue loans to China and India to buy Russian equipment, thereby creating jobs and securing profit for our companies," Putin said.

The Prime Minister also proposed cuts in profit tax to help companies weather the financial turmoil.

"We must cut profit tax by 4 percent from January 1, 2009 at the expense of the federal budget. This issue will cost 400 billion rubles [$14.5 billion]. All this money will stay in the economy next year and will work in the economy," Putin said.

Russia's current profit tax stands at 24 percent, of which 6.5 percent is paid to the federal budget and 17.5 percent to regional budgets.

Putin also un­veiled measures to help the unemployed and proposed raising the level of monthly unemployment benefit by 1,500 rubles ($55) from the current figure of 3,400 rubles ($124), Putin said.

He also assured Russian depositors that the government would guarantee 98.5 percent of all their savings held in Russian banks.

"The overwhelming majority of Russian deposits - 98.5 percent, are fully protected by the state," Putin said.

The Prime Minister also promised that Russia's currency reserves generated during oil boom "will ensure the stability of the Russian budget system for the coming years, with no dependence on world oil prices or traditional export goods." 

Combined Reports RIA Novosti, AP