Moscow abandons bail-outs for bank aid
Russia signalled a change in its policies to fight the financial crisis on Wednesday, indicating that it would switch from bailing out individual companies to supporting the economy through the banking sector.
Moscow also plans huge budget cuts in an attempt to limit its fiscal deficit – rejecting pressure to follow the US and other western countries to try to stimulate the economy with a big boost in public borrowing.
The proposals suggest that Moscow is losing hope it can stave off the crisis with public spending and is instead battening down the hatches for what might be a prolonged recession.
The plans also indicate that the authorities are not giving in to public demands for a quick-fix response and are ready to resist pressure for money from cash-strapped oligarchs.
You know a plan is bad when even Russia rejects it.
How come the Russians who used to live the life of communism can see what a stinker the stimulus is but our own Congress who live the good life of capitalism cannot…?
Maybe the public needs to look at Putin and Russia and tell Congress “I’ll have what he’s having”.
Our two countries are similar in many ways but yet our leaders are choosing to spend us into the stone age while Russia has decided to hunker down,make some hard choices and then ride it out.They do not pretend that there is some sort of magic quick fix.
Russia’s planned policy change was revealed by Igor Shuvalov, the first deputy prime minister, who said the government was deliberately choosing to allow gross domestic product growth to fall to zero or below in 2009 to stabilise the economy and maintain foreign exchange reserves. Moscow was rejecting the advice of those economists who had suggested using the reserves to finance a budget deficit of 10 per cent of GDP to promote growth, Mr Shuvalov told investors at a closed-door meeting in Moscow.
Even they get it.