Russia unveils anti-crisis plan to save banks, but light on details

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Russia unveils anti-crisis plan to save banks, but light on details

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Russia has announced an “anti-crisis” spending plan to bail out its economy which has been battered by Western sanctions and falling oil prices.

President Vladimir Putin’s government plans to spend 2.34 trillion roubles (30 billion euros, $35 billion).

Much of that – 1.55 trillion roubles – will go to bail out banks and big companies, helping them weather the immediate impact of the crisis, at the expense of long-term development programmes.

But many analysts say is still a fraction of what Moscow will have to outlay to keep its lenders afloat.

Deep spending cuts will be needed to pay for the plan.

Without revealing details the government said it would reduce “the majority” of its planned expenditures by 10 percent this year, except for defence, social spending and debt repayments, with a view to balancing the budget by 2017.

Finance Minister Anton Siluanov has said that the anti-crisis plan would not add to total budget expenditures, because of budget reserves and cutbacks elsewhere.

Ivan Tchakarov, Russia economist at Citibank, said that the plan was necessarily vague, as Moscow has yet to revise its budget and macroeconomic forecasts for this year.

“It’s a typical government-led programme. It focuses on subsidies,” he said. “I haven’t seen any particular measure that strikes me as a structural reform, it’s just talk.”