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. Last Updated: 07/27/2016

Soskovets: Pay Your Debts

Many Russian companies are doing everything they can to avoid paying their bills, and debts between firms now total almost 90 trillion rubles ($45 billion) First Deputy Prime Minister Oleg Soskovets said Friday.

Soskovets said Russia planned new measures to curb companies' spending and ensure they used all available assets to pay their debts, Itar-Tass reported.

Many enterprises were using scarce money for pay rises above the inflation rate, or transferring cash reserves to foreign banks, the news agency said.

"In a word they are doing everything so as not to pay their debts," the agency added.

Nonpayment has become a major problem for thousands of Russian firms. Companies leave bills unpaid in the hope that the government will bail them out. Others say they cannot afford to pay because they have not been paid by their own customers.

Russia last week set up a special commission to look into the problem. Soskovets, who heads the commission, was speaking after its first meeting.

He said the commission also aimed to draw up new laws on payments and help improve the procedures for declaring firms bankrupt. Some measures would probably be introduced by presidential decree.

Reformers' main worry on the possible solutions to the nonpayments crisis centers on fears that the government will decide to forgive debts, a move they say could be highly inflationary.

Soskovets admitted that the insolvent military sector might need cash handouts to help it overcome the crisis, but he said it was important to solve the problem "without additional monetary injections into the economy."