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. Last Updated: 07/27/2016

Kudrin Assails State Meddling

Finance Minister Alexei Kudrin called state interference in business a "serious disease" and said the way government worked was "not normal," according to an interview published in Rossiiskaya Gazeta Monday.

He also said the government should have allowed Siemens to take over the country's biggest maker of turbines for power plants, Siloviye Mashiny, or Power Machines.

Kudrin is smarting from a budget policy defeat, when others in government pushed through a sharp hike in the level above which windfall oil revenues flow into his stabilization fund.

"When colleagues take a wrong decision about a matter that belongs to one minister's portfolio -- that is bad. It means that there is something not very normal about the way we work," Kudrin said. "For a second year we have hardly lowered inflation. Although we could have. But we are taking the wrong steps, which are not saving the economy from price growth."

Asked whether he was considering resigning over the issue, he said: "Like that would cut inflation?"

Kudrin also complained that Siemens' nixed acquisition of Power Machines would have given Russia a production center serving all of Asia.

"It contradicted someone's business interests and reasons to refuse it were found," he said.

Kudrin rejected arguments that the deal would have compromised state security. As much as 70 percent of the country's defense orders are carried out by private companies, and the government doesn't have control over their owners, Kudrin said.

Turning his fire to business in general, Kudrin lamented the Russia's failure to get out from under companies' feet. "Alas, we have to admit, that in practically all branches [of the economy] you can see excessive government presence."

Corrupt inspectors, corrupt license issuers and overzealous tax collectors were constantly held up by firms as barriers to a smooth-running business, he added. "The strengthening in government control over businessmen -- that is a serious disease," he said.

(Reuters, Bloomberg, MT)