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. Last Updated: 07/27/2016

PM, Duma Agree on Budget Cuts

Prime Minister Mikhail Kasyanov and State Duma leaders agreed Tuesday that all 2002 spending should be cut across the board if oil prices fall, a Duma deputy said.

However, deputies and Kasyanov failed to find a concrete way of making the cuts, said Fatherland-All Russia faction leader Vyacheslav Volodin.

The government, worried by weaker prices for oil -- a key export revenue earner -- has proposed amending the budget to withhold spending of 37 billion rubles ($1.25 billion) from the whole budget until the fourth quarter -- but only if this money is actually earned.

The 37 billion rubles should be saved for the fourth quarter only after 110 billion rubles had been set aside for servicing and repaying foreign debt in 2003, according to the government's previous proposals.

But Duma deputies said all spending should be cut equally.

"We heard what we wanted to hear," Volodin said after meeting with Kasyanov. "Kasyanov agreed with us that the problem should not be solved [the way the government wanted]."

Deputies will later discuss the problem with Finance Minister Alexei Kudrin, he said.

Deputies and Kasyanov also discussed the situation on the oil market and agreed that so far prices were not dangerously low for Russia, said Unity faction leader Vladimir Pekhtin.

"We agreed that oil price fluctuations are not critical for the 2002 budget," Pekhtin told reporters.