18 Nov 2020 17:24

Regions must not tap expensive financing from banks to cover budget deficits - Putin

MOSCOW. Nov 18 (Interfax) - Subsidized Russian regions, whose debts the federal government has already repeatedly restructured, must not cover their respective growing budget deficits amid the consequences of the coronavirus pandemic by tapping into expensive bank loans, Russian President Vladimir Putin said during a Cabinet meeting on battling Covid-19.

"There are currently acute financial problems [in a number of regions], and I ask that this aspect be taken into account," Putin said during the meeting, indicating that having closed the hole in the budget with bank debt, the regions would then have to increase expenditures in the future in order to service the debt.

"I draw everyone's attention overall to the fact that we now need to do everything so that the regions do not have to seek again and again so-called expensive resources from commercial banks on the market in order to cover the deficit, thereby diverting funds [in the future] from tasks for social and economic development in order to repay budget and treasury loans," Putin said.