Putin announces economic rescue package

RUSSIA / FSU POLITICS - In Brief 25 Mar 2020 by Alex Teddy

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On March 25 Putin addressed the Russian public in an unscheduled TV communique. The week beginning Monday March 30 will be a public holiday - though stock markets will remain open for trading. The reason for this unseasonal week off work is to contain the spread of coronavirus. The country has confirmed 658 cases of the disease. The number increased threefold in 24 hours. This might be due to more people presenting themselves to clinic and more effectual testing. Each family with minor children shall receive a stipend of RUB per month. The aim of this is to offset the inevitable economic hardship visited on people by coronavirus. Small and medium sized enterprises will be allowed to delay paying their tax bills by 6 months. It had been feared that without this thousands of small businesses would go bust. The country is already bracing itself for a spike in layoffs and does not want more. Employers social security contributions for their staff will drop from 30% to 15%, making it cheaper to keep their workforce. Significantly, Putin also took the occasional to lift tax on Russian profits taken offshore from effectively 2% to 15%. This is almost an enactment of capital controls and should reduce capital outflows. It may prove to be a strike against some of Putin's own elite. Coronavirus is mostly concentrated in Moscow due to population density and transport links to China and Western Europe. The Mayor of Moscow Sergei Sobyanin has been put in charge of the country's response to COVID-19. He publicly stated that the official figure for coronavirus cases is a serious under count. Such concerns have been echoed in other country's afflicted by the pandemic. The constitution...