Finance Minister Says Only Half Funds Needed for Anti-Crisis Budget Available; Proposes Cuts

February 24, 2016
Finance Minister Anton Siluanov. Photo by Dmitry Astakhov/Russian Government/TASS

LIVE UPDATES: Russian Finance Minister Siluanov says there isn’t enough money left in the budget to support the anti-crisis plan, and proposes reducing it.

Welcome to our column, Russia Update, where we will be closely following day-to-day developments in Russia, including the Russian government’s foreign and domestic policies.

The previous issue is here.

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TV Rain Forced to Pay 100,000 Ruble Fine Over Controversial Poll on Siege of Leningrad

TV Rain has been fined 100,000 rubles ($1,315) for broadcasting a controversial poll about the Siege of Leningrad during World War II, known as the Blockade in Russia, reports.

Translation: Television Channel Rain, Ltd. has transferred 100,000 rubles to the account of the Presenensky Court Bailiffs

Parfenchikov is the director of the Federal System of Court Bailiffs.

In 2014, TV Rain aired a poll, also disseminated on social networks asking viewers if they believed that the people of Leningrad should have yielded their city to the Nazis for the sake of saving people’s lives; by resisting them and suffering the siege, 800,000 residents, nearly a third of the city’s population, died from starvation.

The posing of the question, which likely was meant to evoke a debate about how much modern people should cooperate with the Kremlin, angered people who had survived the blockade as well as patriotic supporters of the Putin regime.

The issue was again raised this week on February 23, Fatherland Defense Day, when several sites, including PolitRussia, claimed that TV Rain did not plan to compensate veterans of the blockade for “moral damage.”  Ruposters said that TV Rain had been given notice on February 3 to pay within 5 working days, but had not done so.

In August 2014, responding to a complaint about the January 2014 broadcast before the 70th anniversary of the end of the blockade, Zamoskvoretsky Court of Moscow levied the fine of 100,000 rubles which was to be paid to Boris Ivchenko, the chair of the St. Petersburg chapter of the Union of Pensioners, and his colleague Yury Antonov. The two senior citizens had demanded 51 million rubles ($670,960) from TV Rain, but got only partial compensation.

Responding to the public scandal, in 2014, a number of cable operators dropped TV Rain, costing it nearly 90% of its reach and a large portion of its advertising revenue; some commentators believed the incident had been exploited to squeeze the last independent TV station in Russia out of business. Ultimately, TV Rain was forced to move to a paid subscription model. It also lost its studio in a separate development and was forced to broadcast for a time out of an apartment.

Tax inspectors arrived in December soon after it became known that TV Rain had assisted opposition leader Alexei Navalny in his video expose of Prosecutor General Yury Chaika and his two sons.

While 100,000 rubles is a large sum for Russians, the fine is not as large as what some NGOs designated as “foreign agents” have had to pay for refusal to register as such agents — 300,000 rubles.

It’s not clear if this will be the end of the story, however, as the pensioners plan to appeal the court decision and seek  more damages.

— Catherine A. Fitzpatrick

Russian Student Arrested for Posting ISIS Flag
Patimat Gadzhieva, a student in Moscow’s Solntsevo District, has been arrested and charged with aiding terrorism (Art. 201-1 of the Russian Criminal Code) and inciting hatred (Art. 282), Novaya Gazeta reports. Details of her case have been scattered around various media outlets.
Preliminary hearings in her case were closed and a court ruled to extend her pre-trial detention, said TASS.
According to the Mosvka news agency, Gadzhiev posted material on her page on VKontakte, Russia’s most popular social network, that was said to call for terrorism and to incite inter-ethnic hatred.
LifeNews reported that she posted a picture of the ISIS flag.
Gadzhieva, 19, a native of Dagestan, was a 5th-year student at the Sechenova Medical University, says Moskovsky Komsomolets. She is described as “an observant Muslim” who lived with her sister in Moscow, and was said to have some kind of disability since childhood. An honors student, Gadzhieva had served in an internship at the Pirogova 1st Moscow City Hospital and was to graduate this year, which means she would have entered university at the age of 16.
Originally, the investigation charged her with the more serious paragraph 2 of Art. 205, “use of the media,” but changed it to paragraph 1, evidently concluding that in this case, VKontakte did not constitute “media.”
Russian state media has not indicated the name of the judge in her case, noted, nor explained why she was in an ordinary court. Since the start of last year, all cases involving charges of terrorism have been tried at two courts: Moscow Military District Court and North Caucasus Military District Court in Rostov-on-Don. 
Gadzhieva’s case was opened last year and she was arrested November 25, but the press had apparently not learned of it at the time. In her defense, Murad Aliyev, Gadzhiev’s lawyer said that she had thought twice about posting the flag and removed it 13 days later. 
For some reason, Gadzhiev was not present at the hearing, but took part via video conference, where she made the following statement:

As a medical student, I admit that I have committed an offense. I beg to be understood. But I did not have the intent to sow religious enmity, I am not justifying terrorism and urge that I be released from custody.

Investigators have sent the case to the prosecutor to confirm the indictment; the trial is March 3. She faces 2 to 5 years in prison.

— Catherine A. Fitzpatrick 

Finance Minister Says Only Half the Funds Needed for Anti-Crisis Budget Are Available; Suggests Further Cuts
Finance Minister Anton Siluanov said in a February 20 letter to Dmitry Medvedev said there was not enough money in the budget to implement the anti-crisis plan, Kommersant and reported.
Kommersant was able to obtain details of the letter.
There were 250 billion rubles ($3.2 billion) budgeted, but only 120 billion rubles ($1.5 billion) were available, he said; in fact, only 65 billion rubles ($838 million) were on hand. Another 55 billion ($709 million) would come in April when the federal treasury was supposed to send unspent funds remaining from the 2015 budget.

Siluanov reminded Medvedev that the government could spend up to 342.2 billion rubles ($4.4 billion) from the presidential reserve fund, but for this it would have to prove to President Vladimir Putin that the anti-crisis plan was a priority over other plans. He suggested reducing expenditures under the plan down to 120 billion rubles, related to the financing of machine-building, health care and support of exports via the VEB, Roseksimbank and the Russian Export Center, and then asking the president for the remaining 130 billion ($1.7 billion). Items in the list that would not be reduced were 17.1 billion rubles ($220 million) “related to Crimea and Ukraine,” said Kommersant.

Kommersant did not say why the funds were not available, but it was likely due to the devaluation of the ruble. 

Siluanov said that plans for subsidized loans to industry for 10 billion rubles ($129 million) and support of machine-building for 21 billion rubles ($270 million) were impossible, as well as planned tax benefits for the airline industry and Russian Railways; he also said there were 34.9 billion ($450 million) “unforeseen expenses.” He also said the ministry supported the idea of amnestying small business in the shadow economy by granting a three-year tax holiday, but did not support a number of initiatives from the Ministry of Economics to further tax small business.

— Catherine A. Fitzpatrick