The Russian government will allocate one trillion rubles to support the economy in conditions of a pandemic. About it reports Bloomberg. According to sources, part of the funds will be used to subsidise the salaries of employees who have now a long weekend due to the regime self-isolation. It is also known that source of money will not be national welfare Fund and loans, what exactly — not specified. It is also reported that the decision has been made.
We will remind, on long vacations was sent to all, except employees continuously operating enterprises, medical institutions, pharmacies, emergency services organizations, providing the population with food and essential commodities. From idle suffering entire sectors of business across the country.
To support the most affected, the authorities decided to give the business of deferred taxes, for the payment of insurance premiums, the payment of lease payments for Federal property, and other. The President also invited the government and the Bank of Russia to prepare a programme of additional support, so that organizations were able to maintain employment and income of employees.
It all sounds nice, however, it is clear that there has not been without corruption. So recently a scandal broke out with the list of strategic enterprises, which the government has decided to support. It included a number of foreign companies, as well as the bookmaker, which, to put it mildly, a little like a constituent. Moreover, who added gambling to the list of especially dangerous diseases, and we have the power supports it at the state level. Like, let’s suckers, place your bets, play the latest, we will support any Scam.
The company eventually was removed from the list, but there are still questions, for example, and how it actually got there?
Here, he writes about it one of the popular telegram-channels:
“Surprisingly, the Cyprus offshore company Fonbet (bookmaker — ed) appeared in lists of the government as something on its own: Premier Mishustin such orders were not given responsible for the list the first Deputy Chairman Belousov is not in the business, Ministers wash their hands. Nominal CEO Fonbet gave a shocking interview, where she talked about the miracle of “immaculate conception” was made by them to the list without their request or knowledge that, say, there are more worthy, and generally they are socially responsible, and 30 million rubles of donations to the fight against coronavirus. If it really is to avoid verification, to not judge, but at least karma bit clean.
While the government mishustina slowly prepares the second package of measures to support business, and decides an important question to keep in the list of strategic enterprises applying for state support, bookmaker Fonbet (we also can’t imagine our lives in the crisis in Russia without the ability to put on the match of the Belarusian football championship) related to the tax and to notaries lined up entrepreneurs closing their businesses.
After a period of self-isolation, an era of self-destruction business. The scale of this phenomenon we have yet to evaluate and understand.
Andrew that the bookmaker Fonbet, came to the attention of the media, most likely, will not be included in the final lists sistemoobrazujushchih enterprises. But under the “smokescreen” of righteous anger that struck the hated bookmakers, dragged a dozen companies with foreign capital — Auchan, IKEA, McDonald’s, Burgerking, Leroy Merlin and even a few of the Cyprus offshore, which was not in the focus of media attention. Why did all these poor foreign companies have to help mother Russia, and not France, Sweden, USA, Germany or tanned Cypriots to explain quite difficult. But the government mishustina likely to succeed, he will fail.”
It appears that the authorities are going to save at all, who does not understand. Also to take to do this?
And generally the question is, will it be limited trillion, will be enough?
—Trillion cannot come from the budget, says economist Tatiana Kulikova.
— Because the entire Russian budget is on the order of 20 trillion. Trillion will not be there. Have or take it from the reserves from the Fund, or to borrow. It will look approximately like the placement of OFZ, maybe this will be the location of any targeted loans.
In principle, could be taken from reserves, but this would have to tweak the legislation. Now from FNB you can’t get the money. But, apparently, decided the reserves to save.
However, in order to take, will be a big problem, because now if you place the volume of such loans, the rates will inevitably go up. This volume of loans will have to buy the Central Bank. That is directly monetizing the debt. If the Central Bank will not monetize, you have to purchase the placed bonds, the rates in the economy go up and this will have an even stronger negative impact on the economy.
“SP”: — But enough of trillion, to help the business?
— Hard to say. As far as I understand for this epidemic — from the experience of other countries — even Russia only in the beginning. Therefore, most likely, the regime of isolation April will not be limited. So, the economy will have to pour a lot more money.
“SP”: — Why we are allocating significantly less money as a percentage of GDP in comparison with the developed countries of the West?
— Here is clear — the United States emit a reserve currency, they can print it as you like, which they do. The us fed already buys government and corporate bonds and even corporate bonds are so-called “junk rating”. But it can only afford issuers of reserve currencies. The ruble is not. We, therefore, their opportunities limited by the size of the reserves. Fortunately, we have a lot of reserves, unlike other countries with emerging markets. But reserves are not limitless, and we can’t afford to help the amount of 10 percent of GDP, as do the United States or 20 percent in Japan.
“SP”: — How a bookmaker and a whole number of foreign companies were included in the list of those who will be helped? Do they need to provide it?
— Why the bookies, I can’t say. It is likely some kind of corruption scheme. As for the other foreign companies that we deem backbone and support, I also think that it is wrong. But some logic in this. If the same IKEA will go with our market, many of our citizens will experience inconvenience because they used to use these shops, as domestic producers which could replace IKEA at the moment. In this sense, it is logical to help the companies with foreign capital, but it would be logical to go the way of import substitution, creating a domestic manufacturer.
And, of course, where we are talking about the manufacturer, which has a domestic counterpart, then to help foreign companies do not need. Very bad looks help McDonald’s at the time, as our “Tower” in the help refuses. Similarly, not necessarily to help the same Hashanah — we have a national network of supermarkets.
Political commentator of the newspaper “2000” Dmitry Galkin believes that “Bloomberg” is likely to know something about the intention of the Russian government to place debt obligations or to resort to any other means of borrowing.
The Agency says that the plans of the Russian government he was able to learn from two people, which they are known. However, it is impossible to understand who these people are: Russian officials or representatives of Western financial institutions with which the Russian government is negotiating. I must say that 14 billion dollars that the Russian government intends to take, and directed to the solution of urgent socio-economic problems represent an amount clearly insufficient to stop the development of the crisis. It is hoped that, in addition to external borrowing, the Russian government is considering other ways of obtaining the financial resources necessary to combat the crisis. Otherwise, the situation will develop in a very unpleasant scenario.
“SP”: — This a trillion not enough?
— Of course, not enough. Most likely, this money will go to corporations that are major employers in the Russian province, primarily to retail chains, to keep them from mass layoffs.
“SP”: — Why Russia as a percentage of its GDP emit ten times less than the US or Germany? I’m afraid the whole pod, quickly waste?
— Unlike the US and Germany, Russia faced the threat of a sharp reduction in export earnings. Meanwhile, Russian industrial production is dependent on foreign equipment and components. Accordingly, banks must have funds which they could lend to Russian companies in order that they could continue to work. In addition, funds may be needed to support most oil and gas industry and for the completion of major infrastructure projects. However, if mass unemployment cannot be avoided, the Russian authorities will inevitably face problems much more serious than the destruction of individual banks and corporations.
“SP”: — Who will help? Where Fonbet got to the list backbone? Mishustin do not know Belousov, who is directly responsible list, too. Mystic?
— Will help those who will be able to get on the list. It is clear that this can only be done by those who has strong ties to the government, or knows how to affect the activities of the staff in the preparation of decisions. However, in the latter case, at the stage of final approval of the list company, used hardware mechanisms to get into it, you may lose your place. Apparently, that’s what happened with “Fonbet”. Therefore, in the most advantageous position there are major corporations that have ties at the level of senior government officials. Incidentally, such companies typically are the most significant employers so that a rational element in such a system is available. Those who have no ties to the government and their own deputies in the state Duma, risk to remain without support, no matter how difficult their position will be.
“SP”: — they Say that Fonbet is a distraction to cover up all sorts of McDonald’s and “Burgerking”. And who do we have lobbying the interests of foreign capital, and how to deal with it?
— Russia is helping not by transnational corporations and their Russian units, which provide jobs for hundreds of thousands of people. Therefore, if the government intends to help the largest corporations, transnational corporations acting on the territory of Russia, should also be supported. However, I think the financial help you need to provide not corporations, and enterprises of small and medium business and self-employed. And support (albeit to a lesser extent) need to be provided to those who acted in the “gray” zone, not paying taxes and making no contributions to social funds. If these people who earn their living and feed their families, unable to continue its activities, the society will sharply increase social tensions. It should be noted that for the past 20 years in Russia was not a serious social crisis, but because the current government, both Federal and regional, simply do not know how to handle them. Since this experience she is missing, she too relies on administrative measures and law enforcement agencies. In conditions of acute social crisis caused by mass unemployment, these tools will be inefficient and will not meet the expectations of the authorities. With regard to corporations, they, of course, also should be helping, but not providing direct financial assistance, and helping to obtain Bank loans and providing the opportunity to participate in activities to support the most affected segments of the population. So, trading networks, for example, could engage in the formation and delivery of food packages for the poorest social groups, who will inevitably have to do so.
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