MOSCOW, July 11. /TASS/. The Russian Ministry of Finance published the parameters of the new budget rule in the “Main Directions of Budget, Tax and Customs Tariff Policy.” The formula takes into account such indicators as the base price of oil and natural gas, the ruble exchange rate and the volume of non-oil and gas revenues. The document was published on the official website of the State Duma.

According to the new budget rule as amended by the Ministry of Finance, the base price for Urals oil is set at $40 per barrel in 2017 prices and is subject to annual indexation by 2% starting in 2018.

Thus, the maximum amount of federal budget expenditures is calculated as the sum of oil and gas revenues (calculated based on the base price of oil, the base export price of gas, the projected exchange rate, the volume of non-oil and gas revenues) and the cost of servicing the public debt. This method of determining marginal expenses makes it possible to ensure a deficit-free budget at the primary level with basic parameters, the Ministry of Finance notes.

Replenishment of reserves

Additional oil and gas revenues received as a result of the actual oil price exceeding the established cut-off level will be directed to the Reserve Fund.

The volume of replenishment or use of the Reserve Fund is determined as the difference between the received oil and gas revenues and oil and gas revenues calculated at the base price of oil, the base price of exported gas and the actual exchange rate.

According to the Ministry of Finance, the budget rule is the only effective mechanism for commodity-producing countries to minimize the susceptibility of internal economic conditions to fluctuations in external conditions. Significant fluctuations in oil prices can have a significant impact on the rate of economic growth and budget sustainability, inflation and the welfare of the population, exchange rates and interest rates in the economy.

In the event that the volume of the Reserve Fund as of January 1 of the first year of the planning period falls below the level of 5% of GDP, the maximum volume of use of the Reserve Fund cannot exceed 1% of GDP. Thus, based on this amount, the expenditure limit and/or other sources of financing the budget deficit are adjusted.

History of the fiscal rule in the Russian Federation

In Russia, fiscal rules were initially introduced in 2004, after which they were modified twice: in 2008 and with the end of the suspension period (2009-2012) in 2013. Despite the positive contribution to ensuring the stability of the budgetary system, the design of fiscal rules in force before the 2016 suspension did not adequately ensure that the negative impact of oil price volatility on the predictability of economic conditions and fiscal sustainability was mitigated, the Ministry of Finance admits.

According to the department, the increased variability of the structure of relative prices (the real effective exchange rate of the ruble) over the past 15 years in Russia and in comparison with the dynamics of the currencies of commodity-producing countries with an effective mechanism of fiscal rules is a clear illustration of the shortcomings of previous designs.

Transition period

The practical problem for implementing fiscal rules is that Russia has entered the declining phase of a long-term commodity supercycle with a minimum amount of reserve funds in sovereign funds, the Ministry of Finance notes. Thus, bringing budget expenditures to a level corresponding to budget rules, on the one hand, cannot be accomplished within a short period of time, and on the other hand, the volume of accumulated reserves is not enough to stretch consolidation over a long period.

In this regard, the general mechanism of the new budget rules has been supplemented by a period providing for a smooth transition to new maximum expenditure levels. Moreover, the duration of such a transition period is determined by the need to maintain a minimum safe level of reserve funds in sovereign funds.

Based on this limitation, the reduction of budget expenditures to the level corresponding to the budget rules should be completed by 2019.

The transitional provisions of the new design of budget rules began to be implemented already in 2017. At the end of January 2017, it was decided to maintain additional oil and gas revenues when oil prices exceeded $40 per barrel and to conduct currency purchase/sale transactions on the open market. As a result, since February 2017, there has been a noticeable decrease in the correlation between exchange rate dynamics and oil prices, a reduction in the risk premium on Russian assets, and therefore a decrease in the required return and equilibrium real interest rates in the economy, the Ministry of Finance emphasizes.

Why was the “budget rule” invented and how did it work? How funds are accumulated in other countries and how this differs from Russia. Is it worth saving money for the budget, and if so, how?

Amendments to the Budget Code regarding the new “budget rule” were approved by the government on June 15. What is commonly called the “fiscal rule” in the bird language of government economists is very simple. Is it worth spending all budget revenues or, according to some pre-formulated principle, saving some of them for some purpose? The rules of such “hoarding” have been applied, canceled, or changed over the past 14 years.

According to ACRA research, over 90 countries around the world use fiscal rules. The World Sovereign Funds Institute (SWFI) monitors about 80 sovereign wealth funds accumulated under such rules. True, the number of countries in which these funds are located is several times smaller: for example, in Russia there are 3 such funds, in China – 4, and in the USA 10 states have their own sovereign funds.

The authors of the ACRA study even stated that “the application of one or another budget rule is the mainstream of economic policy.” Maybe mainstream, but that's not proof. During the times of Copernicus and Galileo, the mainstream was that the Earth was flat and the Sun revolved around it. It is worth understanding how and why some states or regions accumulate budget revenues and whether Russia needs it.

Absurd

They are obviously saving money. Why save other people's money is understandable. But why should the state accumulate its own currency, which it can print at any time in any quantities? There is still no answer to this question.

The cook cannot govern the state because the mystery of issuing money is not clear to her. And it changes everything in economic policy, mystifies it. For a cook, it is obvious that the more money, the better. But for the state this is not at all the case. Excessive emission of money is fraught with inflation (and with strong involvement in this process - hyperinflation). The cook's rules for the state are invalid. Moreover, the modern state has no restrictions in terms of issuing money (such as gold reserves, etc.), only its own reasonable behavior. Money in the modern world is not backed by anything other than trust in the governments that issued it.

Why the cook needs to save rubles is understandable. But why should Russia hoard the rubles it issues? Looks absurd. It is absurd.

If you need rubles, print them. The accumulation of rubles by the budget essentially means their withdrawal from circulation, and the spending of budget savings is a process indistinguishable from ordinary money emission in its consequences. The accumulation of rubles by the Russian budget is an element of monetary policy. Which is not at all within the powers of the Ministry of Finance. The size of budget funds is just a limit on budget emissions and nothing more.

But the problem here is not only in words. The accumulation of rubles in budget funds is a brake on economic growth. After all, in fact, taxes are collected, and instead of being released back into the economy, they simply disappear (“accumulated” by the Ministry of Finance, and in fact are withdrawn from circulation). For such an absurd process, a special economic term has not even been invented (demission? They say at length: reduction in the money supply). After all, there is no phenomenon as such, why call it something special?

When the state of Alaska decides to save dollars, everyone understands that Alaska does not print dollars. Yes, the state doesn’t just accumulate them, but invests them all over the world. When the Russian Ministry of Finance withdraws part of taxes from circulation, it is incorrect to call it “savings”. It simply destroys the corresponding amount of money in the form of withdrawing it from circulation.

The Ministry of Finance first began these operations in 2004. In the first 5 years, it destroyed 20% of GDP (the size of budget funds at the beginning of 2009). That is, by blunt counting, every year it slowed down economic growth by about 4%. This is the price of our budget savings - this does not take into account compound interest, multipliers, etc. The deduction from economic growth is actually significantly higher.

Russia's accumulation of foreign currency has a completely different meaning and consequences - the growth of gold and foreign exchange reserves of the Central Bank. The Central Bank buys dollars on the domestic market and thereby issues rubles into circulation. This is the process of accelerating economic growth.

China accumulated up to $4 trillion (now the amount has decreased) not because its leadership suffered from hoarding mania. But because this allowed him to create increased demand for currency and keep the yuan exchange rate undervalued. For what? This stimulates exports and keeps imports expensive, giving a double boost to economic growth in the country. This artificial stimulation is one of the secrets of the incredible dynamics of the Chinese economy over the past 30 years.

At the same time, China did not create any budgetary funds and did not engage in such nonsense as accumulating yuan. There are no budget rules - everything collected from the economy is returned back to the economy in the form of budget expenditures. Economic growth in China has not slowed down for a quarter of a century. But in Russia, high growth rates lasted only until 2007, and then economic growth became bogged down in crises and stagnation.

The growth of gold and foreign exchange reserves of the Central Bank (as well as the growth of foreign exchange reserves of budgets) is a stimulus for economic growth, pressing the gas pedal on the car. The growth of budget reserves in the national currency is a deduction from economic growth, pressing the brake pedal. Why is this absurdity needed - to press the gas pedal and the brake pedal at the same time (mid-2000s)? What will happen to the car on the road? This is what happened to the Russian economy in 2008 - it “went into a skid,” and the authorities still don’t know how to get it out of these evolutions.

Accumulating foreign exchange reserves is beneficial for the country's economy, but national currency reserves are absurd. But the “cooks” in the Russian government cannot understand this difference. And again and again they condemn us to the strategy of accumulating the national currency (“fiscal rule”) with the stability of foreign exchange reserves (CBR). It is theoretically impossible to achieve economic growth in such a situation. This is as absurd as trying to accelerate a car by pressing on the brake instead of the gas.

Absurdity squared

After the explanations have been made, discussing options for fiscal rules is like discussing which death penalty to choose for the Russian economy. Immediately cut off her head or let her suffer. Although, as they said in one famous Soviet film, “I would suffer”...

In 2004, the version of the 1st budget rule was simple - all budget revenues from customs duties and mineral extraction tax received at the “cut-off price” of $20 per barrel of oil were sent to the Stabilization Fund. In January 2004, the price of oil was $29. By the end of 2006, it rose to $60. The stabilization fund grew rapidly. The “cut-off price” was raised to $27. In 2008, they came up with a complex formula that died at the end of the year, when oil prices, having reached almost $150 in the summer, began to fall rapidly.

For the next 4 years, the budget rule was not applied.

But in 2013 it was reintroduced. Trying to modify and make the “cut-off price” some kind of automatic mechanism, the average price over the last 3 or 10 years (whichever is less). In 2013, the “cut-off price” turned out to be $81, with the average annual oil price of $108. In 2014 – $87 at $98 per barrel. But by the end of 2014, oil collapsed again, and since October it has been below the “cut-off price”. Another budget rule is dead. It was suspended in 2015.

In 2004–2008, the budget accumulated with a budget surplus. He destroyed his own money. In 2013–2014, the budget began to “save” with a deficit. He borrowed money from the market in order to destroy them.

Just imagine, a man came to the bank and took out a cash loan, went out into the yard, put the money in a pile and set it on fire. This is exactly what the budget did in 2013-14. There is not enough money, he borrows it from the market and burns it. Absurdity within absurdity.

Since then, the budget has lived “without rules.” More precisely, without legally established rules. Since 2016, a rule has been in force, which was introduced at one of the meetings with the president. The Ministry of Finance and the government took the initiative to freeze budget expenditures in rubles for the next three years. They introduced such a law into the Duma and approved it. For 2017 and the new three-year period, this rule was re-approved. Moreover, expenses are nominally reduced from year to year. In reality, taking into account inflation, they are falling quite noticeably.

Absurdity in a cube

The 2017 budget was planned based on the average annual oil price of $40 per barrel. In fact, today the average oil price is $52.4. The budget received 1.2 trillion rubles. excess profits, mostly directly due to the increase in oil prices. But the Ministry of Finance introduced amendments to the Duma (approved in the first reading on June 9), according to which less than 1/3 of this money is used for expenses. And the rest, without any budgetary or any other rules, will be used to reduce the budget deficit, budget borrowing, etc. - anywhere, but not for expenses.

At SPIEF 2017, Finance Minister Anton Siluanov bluntly said: “There is money.” Of course have. Over 800 billion rubles. He stuffed the excess income of 2017 into his “stash” and did not give it for expenses. Let pensioners cry. This is the “budget rule”.

Planning the Absurd

Since 2018, the government has decided to return to the formal “fiscal rule”, once again spelling it out in the Budget Code. Budget expenditures will be determined based on the “cut-off price” ($40 per barrel + 2% annual inflation) with the addition of interest expenses on the public debt and certain “budget balances.” And in 2018 – a transitional situation – another plus of 1% of GDP. The final formula is not yet clear (the draft has not been published), but for 2018 it seems softer than what is currently established by the budget law.

Former Deputy Prime Minister and Minister of Finance Alexei Kudrin tried to explain at SPIEF 2017 that it is necessary to set a “cut-off price” of $45, and the resulting excess income (about half a trillion rubles) should be spent on education and healthcare programs. But with a united front, Anton Siluanov and the head of the Central Bank, Elvira Nabiullina, explained to him that they could not agree to this. And Siluanov also joked: they say that Kudrin himself, when he was Minister of Finance, was always in favor of the most stringent budget rules. Which is, of course, true.

However, no one asked the main question: why is it necessary to introduce a budget rule if the budget is deficit? Why save rubles if they are sorely lacking? Is it expensive to borrow from the market (today the Ministry of Finance pays 8% per annum on annual OFZs) in order to keep them in the Central Bank cheaply or even free of charge? After all, this is a direct loss to the budget.

The “budget rule” in the context of a budget deficit is the same as burning thousands of tons of sanctioned food in a country where 20 million people barely have enough money for food.

The introduction of a budget rule is again a deduction from economic growth, a reduction in aggregate demand in the economy by the amount of the increase in supposed “reserves”.

Who “settled” on budget funds

It seems that budget funds were saved precisely for difficult times, when oil prices fall. So they fell, so what? The government is trying in every possible way to reduce expenses from budget funds and come up with new “rules” so as not to spend these funds, and even continue to “save”. So who are these “money reserves” for if people are not given them?

The Reserve Fund is the domain of the Ministry of Finance; it is spent to finance the budget deficit. But the National Welfare Fund - NWF - is intended for something else. It is needed for the purpose of co-financing pensions (a program that has now been cancelled) and financing the budget deficit of the Pension Fund.

It seems that this is the source of money for pensions. But no. In 2016, the legal indexation of pensions was replaced by a one-time compensation - all pensioners were actually robbed of one pension last year, and the trail of under-indexation will stretch and spread to all currently employed for all future years.

Anton Siluanov just said in the State Duma that he is ready to return to the issue of indexation of pensions for working pensioners only in 2020. For this indexation, 200 billion rubles are needed. in 2017. So here it is, this money – the National Welfare Fund or additional revenues from the current year’s budget. The government and Siluanov have money, but they don’t want to spend it on these expenses. Why? Siluanov did not explain.

Pensioners did not receive funds from the National Welfare Fund in any form. But a third of it has already been invested (for more information about the efficiency of spending the funds of the National Welfare Fund, see “Fund of Others’ Welfare”).

The funds of the National Welfare Fund are distributed by decisions of the Government of the Russian Federation without any competition. They have nothing to do with profitability. Moreover, there is a special government decision so that all income from investing funds of the National Welfare Fund should be credited not to the fund itself (which would be logical), but to general budget revenues.

As a result, super-preferential loans or free investments (for example, investments in preferred shares of banks) do not bring any income to pensioners. But money and income are received by state banks, “friends of the President of the Russian Federation” and state monopolies. And also those who steal from them. So is it for them that we are accumulating these “reserves”, underpaying pensioners their pennies?

Wouldn’t it be better to do everything wisely, since the National Welfare Fund was created? Form its administration, separate from the Ministry of Finance and the Central Bank. Investment declaration. Public reporting for every cent of investment. And evaluate his work precisely by the income he earns. This is how the world's most advanced sovereign wealth funds operate.

Beautiful? Certainly. But who then guarantees the investment of these funds in state banks or companies of “friends of the president”?

What about in other countries?

The Russian version of the “fiscal rule” destroys economic growth. But in other countries that save not national money, but currency - no matter in central banks or sovereign funds - growth accelerates.

In Norway, oil windfalls go directly (without being converted into Norwegian kroner, remaining in foreign currencies) to a special state pension fund, which invests them in European stocks. Today there is not a single large European company in which a Norwegian fund is not a shareholder.

In countries where a state-owned company is engaged in oil production (as in Norway or Saudi Arabia), part of its income in foreign currency goes directly to sovereign funds, without entering the domestic foreign exchange market. Where private oil workers do this, either special taxes in foreign currency go to such funds, or the foreign exchange reserve is accumulated by the Central Bank, buying foreign currency on the domestic market.

The Alaska Petroleum Fund (APF) collects all state revenues from oil production and invests them around the world in stocks, bonds, real estate, and investment projects. Everything is known about each property, right down to the address where it is located. It is known about every share he bought. For example, he owns shares of 34 Russian companies and lost more than $50 million on them due to the devaluation of the ruble and our crisis. And APF directs all income from investments to payments. On average, the fund sends a check of $1,000 to $2,000 per year to every permanent resident of the state. Not much, but the amount is growing. Everything is open, transparent, understandable to every citizen and any outside observer.

If oil runs out in Alaska or Norway, they will live comfortably on their cash savings. It makes sense. What's the point of saving in Russia? We will never run out of oil... At least this time is not visible on the horizon.

In China, the foreign exchange reserve is accumulated by the country's national bank. It invests its funds in foreign securities, mainly bonds, like all central banks in the world. Today, the best such investment is US government securities - with the highest reliability, the interest rate on them is significantly better than in Europe or Japan, where the interest rate, especially on short-term securities, is generally negative (that is, the investor also pays extra for holding these securities).

The Chinese authorities are not too happy with this reverse flow of capital to the United States. And they created, using the National Bank’s foreign exchange reserves, a couple of independent funds that engage in direct investments in all countries of the world. The Chinese have created another special fund for investment in Africa. They also invest in Russia.

SWFI produces a special Sovereign Fund Transparency Index. Out of a maximum of 10 points (for example, the Norwegian Fund or APF has such an index), 2 Russian funds scored only 5, and RDIF (direct investment fund) was left without evaluation at all due to the secrecy of its operations.

This may seem surprising - after all, of all our three funds, only RDIF has its own administration, website, reporting, etc. Its head regularly speaks at various world conferences. But information about its financial transactions is closed and available only to its 100% shareholder, the state-owned VEB. Another difference between RDIF and foreign investment funds is that it is like a sovereign fund in reverse, inside out. He does not invest Russian funds around the world, but on the contrary, his goal is to promote investments of other funds in Russia, in projects in which he himself takes a small percentage of participation.

For what?

There is only one question left: why is the Ministry of Finance so eager to accumulate Russian currency with the help of absurd budget rules? The most correct answer is: because it can. Remember the parable about the scorpion that stung the frog that was carrying it across the river? "For what? - asked the frog. “You will drown too!” “This is my nature,” answered the scorpion.

The Ministry of Finance is the accounting department of the state. Accounting always wants to receive more income and spend less. The shortage scares her. If the head of the Rossiya enterprise does not consider it possible to control and direct his accounting department, it will always act in accordance with its “nature”. The problem is that the head of the enterprise also has no incentive to pursue any other policy. Neither strong opposition, nor capricious consumers, nor meticulous shareholders force him to do this. Even despite the approaching shareholder meeting - presidential elections 2018. This means that we are doomed to live with the budget rule, despite its complete absurdity. And with behind-the-scenes decisions to spend budget funds on “friends” of those in power.

The principle embedded in the budget rule has actually been in effect since 2004, when the Stabilization Fund was formed. For this fund, the following formation procedure was in effect: oil and gas revenues above the cut-off price were transferred to it, which was $20 per barrel of oil in 2004, $27 in 2006. At the same time, the dynamics of oil prices significantly outpaced the growth of the cut-off price. According to experts, the Stabilization Fund received up to ¾ of additional income from favorable external conditions.

The principle embedded in the budget rule has actually been in effect since 2004, when the Stabilization Fund was formed. For this fund, the following formation procedure was in effect: oil and gas revenues above the cut-off price were transferred to it, which was $20 per barrel of oil in 2004, $27 in 2006. At the same time, the dynamics of oil prices significantly outpaced the growth of the cut-off price. According to experts, the Stabilization Fund received up to ¾ of additional income from favorable external conditions.

On February 1, 2008, the stabilization fund was divided into two parts: the Reserve Fund $125.41 billion (RUB 3,069 billion at the time of division) and the National Welfare Fund $31.98 billion (RUB 782.8 billion at the time of division).

the size of the non-oil and gas budget deficit is 4.7% of GDP

oil and gas transfer - the volume of oil and gas revenues that can be used to finance budget expenditure items - 3.7% of GDP.

That is, the implication was that it was possible to “safely” borrow 1% of GDP to finance the budget deficit. The threshold volume of the Reserve Fund was set equal to 10% of GDP. After overcoming this threshold, oil and gas revenues were to be directed to the National Welfare Fund.

Due to the 2008 crisis, the above rule ceased to apply. The new cut-off price was the level of 45 - 50 dollars per barrel, which ensured oil and gas revenues at the level of 4.7% of GDP. In 2011, the threshold volume of the Reserve Fund was set at 7% of GDP.

In 2012, a fiscal rule was proposed that included two innovations:

the cut-off price for oil and gas revenues should not be predicted, but calculated on the basis of statistical data for previous years as a trend indicator;

the volume of budget expenditures should be determined as the sum of non-oil and gas revenues and oil and gas revenues within the framework of the estimated oil price plus the maximum possible budget deficit in the amount of 1% of GDP.

The budget rule officially came into effect on January 1, 2013. The cut-off price was calculated over a period of five years and amounted to $91 per barrel. It should be noted that by 2018 the calculation period should be ten years. In 2014, the cut-off price rose to US$92 per barrel.

The aggravation of Russia's foreign policy confrontation with Western countries and the deterioration of the economic situation require immediate action from the country's leadership. The notorious import substitution so far turns out to be more of a transition not to a domestic product, but to a Chinese one. Dramatic changes are needed.

The last week has been a week of revelations for the Russian Government, experts and Russians. From the stands of the State Council, proposals for a radical change in the economic course were heard. Thus, the country's President Vladimir Putin refuted the economic postulates that have been instilled by liberals over the past 20-plus years, and stated that from now on the Russian economy will focus on the domestic market, and not on mythical foreign investments.

The issue of external borrowing, which the Ministry of Finance abandoned this year, has always caused a lot of criticism among experts. In 2010, Russia returned to the practice of issuing debt securities in order to cover the budget deficit. However, despite the fact that the budget in 2011-2013 was executed with a surplus, for some reason the Ministry of Finance did not refuse to raise funds. Despite the fact that steadily growing income from energy exports made it possible to increase the reserve fund. On May 1 of this year, the total volume of the reserve fund reached $87.94 billion. In this regard, it remained unclear for what purpose the Ministry of Finance in the last few years turned to the foreign market for additional money if the state did not experience a shortage of its own funds.

Be that as it may, under the pressure of circumstances, the Ministry of Finance is now forced to abandon external borrowings. In particular, the rating agency Standard&Poors downgraded Russia’s credit rating from “BBB” to “BBB-”, that is, to “negative”, played a role.

This makes it impractical to attract borrowed funds.

It should be noted that the Eurobond game, which the Ministry of Finance began in 2010 with a colossal increase in revenues to the reserve fund, led to the fact that the debt burden on the state increased by $14.43 billion, amounting to 72.9% of the public debt structure. Of course, compared to large developed countries, Russia's public debt is small. As of April 1, 2014, it amounted to only $54.9 billion. This is one of the lowest public debt levels in Europe. And if we look at the United States as an example, in 2013 it exceeded the figure of 17 trillion.

However, this coin has a flip side. While public sector debt is low, we have catastrophically high private debt. In 2014 he reached $649.2 billion. At the same time, Russia’s total external debt, according to the Central Bank, is 727.1 billion. And it’s not so much the scale of corporate debt that is frightening, but its dynamics. In the 2000s, external debt grew very rapidly.

Over the past 10 years, Russian big business has been very actively applying for loans from foreign banks. The growing demand for foreign sources is explained by the favorable difference in the interest rate of foreign loans compared to domestic ones, as well as more accessible conditions for obtaining. Some experts are not inclined to see this as a serious threat due to the fact that Russia has developed an export model of the economy. In their opinion, debt to Western banks is not terrible as long as the debt is secured by stable exports of products.

At the same time, the largest domestic companies with serious external debt are associated with energy resources or other commodities. Key debtors include such giants as Lukoil, Evraz, Rusal, Severstal, Transneft, Gazprom and Rosneft. In particular, according to Reuters, the total debt of Gazprom and Rosneft is about $90 billion (almost 2 times more than the Russian government debt). At the same time, Standard & Poors estimates the amount of return that Rosneft must make this year and next year at $15 and $16 billion, respectively. Also, a significant part of the external debt falls on the five largest domestic banks, which owe about $60 billion to foreign creditors.

One of the threats of uncontrolled growth of external debt is the excess of the amount of debt over the available gold and foreign exchange reserves. What does this mean? Gold and foreign exchange reserves, as is known, are used primarily to finance imports, repay external government debt and stabilize the foreign exchange market. In the event of a deterioration in the economic situation, the state is forced to finance the debts of large corporations.

Without going deeply into these nuances, it is enough to once again pay attention to the companies with the largest debts - these are strategic corporations associated with the extraction of energy resources, on which the filling of the budget directly depends. Obviously, the state cannot refuse to help these companies.

Meanwhile, the ratio of external debt and gold reserves has changed significantly over the past few years. If in December 2011 gold and foreign currency reserves were covered 94,8% external debt, then in May 2014 reserves provided only 65,3% debt.

In addition to the fact that the growing burden of external debt in itself is a serious threat, another factor has been added since this year. This is a deterioration in relations with the United States and the European Union, which has already begun to affect the financial and credit sector. In the context of growing confrontation with the West, with a decrease in the sovereign credit rating, foreign banks may refuse to restructure our companies' debts, reschedule payments, or provide additional loans. This in turn can significantly worsen the situation with capital outflow.

Political problems have already affected some companies. The reason was the changes that were made this year to the terms of lending by foreign banks. The loan agreement now has a clause on the immediate repayment of loans taken or even on the borrower declaring a default in the event of sanctions being imposed against the company or even its co-owner. As the Financial Times notes, banks and credit institutions in the US and EU require companies that have avoided sanctions to immediately repay loans if they are introduced. Although this practice is not revolutionary. And in general, it is logical that any creditor in conditions of political instability wants to protect itself with such conditions.

The reaction to such a measure was not long in coming. For example, the largest Russian company in the petrochemical complex "Sibur", against whose co-owner, Gennady Timchenko, the US authorities had previously imposed sanctions, recently took out a loan for 27 billion rubles from Sberbank, refusing a foreign lender.

According to the Financial Times, Western banks have already reduced the volume of cooperation with the Russian Federation. Based on the results of the first quarter of 2014, Citigroup reduced investments by 9% - to $9.4 billion. JP Morgan Chase decided to invest 13% less - $4.7 billion. Japanese banking groups also began to curtail their business in the Russian Federation - Bank of Tokyo Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation. By the way, the latter froze for some time credit lines for the oil trader Gunvor, associated with Timchenko, who was on the sanctions list. Also, difficulties arose with the mining and metallurgical holding "Metalloinvest" of Alisher Usmanov. Just a few days before the signing of an agreement on export financing in the amount of $1 billion, the bank abandoned the deal.

A further deterioration of the situation, which is also fueled by purely economic reasons - this is a worsening of the global crisis - could cause an acute liquidity crisis. In 2008-2009, this led to the state being forced to undertake the restructuring and repayment of debts of a number of companies.

The current situation will persist and can either be aggravated or smoothed out depending on the further development of events around Ukraine. But it is important to draw timely conclusions from this story. The Ministry of Finance has previously announced that it intends to continue to monitor all foreign loans. However, no specific instruments were announced. Of course, the rejection of government borrowing is positive. But here, rather, the point is the complete lack of benefit from raising funds in the conditions of a negative credit rating. Of course, the West probably does not want to aggravate the situation. Foreign capital is still interested in cooperation, not confrontation.

But, one way or another, the dependence of Russian business on the Western financial system and the continuing growth of corporate debt has no prospects. Excess of the amount of debt over gold and foreign exchange reserves is a dangerous symptom. It is noteworthy that external debt continued to accumulate even with exports growing in 2012-2013. It would seem that growing exports should have a positive impact on the growth of profits of our mining corporations and alleviate the debt burden. However, debts increased. This indicates that the efficiency of the export model is declining. The Russian financial authorities, while taking individual steps - refusing loans through Eurobonds, tightening control over foreign loans - previously did not take radical measures, which are now being considered seriously. This is a rejection of the notorious budget rule, which has been stated more than once even by the Ministry of Economy...

It is strange that the news that the financial department is proposing to abandon the replenishment of the Reserve Fund from additional oil and gas revenues as part of the “budget rule” went almost unnoticed. It is planned to reduce the government borrowing program by the amount of these revenues, the cost of which is negatively affected by the geopolitical situation and the Western sanctions regime. According to the budget rule, oil and gas budget revenues received above the base oil price ($96 per barrel) are sent to the Reserve Fund, the deputy head of the Ministry of Finance recalled. “We propose to modify this rule and not accumulate these funds in the Reserve Fund, but direct them already at the planning stage to replace government borrowing,” said Finance Minister Anton Germanovich Siluanov. “We are moving away from the previously prevailing tactics and strategy - “borrow and save,” which allowed borrowing and accumulating funds in the Reserve Fund,” Lavrov said. “Since our situation is like this, we consider it right not to direct these funds to the Reserve Fund, but thereby reduce the volume of government borrowing and public debt.” The Ministry of Finance saved, let us remind you, mainly in government bonds of a strategic competitor - the United States. So This decision cannot be called anything other than a refusal to pay tribute to Washington, and it is truly sensational (previously it was reported about the gradual reduction of the share of Russian foreign exchange reserves in US bonds, coupled with the beginning of the refusal to pay in dollars with China and a number of other countries, this is an open challenge to the “world hegemon” who has unleashed wars around the world).

In the draft budget for 2015-2017. it is planned to reduce domestic government borrowing by more than half: in 2015 - to 280 billion rubles. (in the current budget law - 676.6 billion rubles), and in 2016 - up to 299 billion rubles (against the planned 745.5 billion rubles). The volume of the Reserve Fund is estimated at about 3.5 trillion rubles. And recently it became known that the ruling party headed by Dmitry Medvedev is preparing an alternative economic course for the country. One of the main ideologists of this course is Presidential Advisor Sergei Glazyev. The State Duma hosted widely announced parliamentary hearings on the new economic policy ().

The measures proposed by United Russia are directly opposite to the previous policy of the government of Dmitry Medvedev. Deputies, in particular, propose to increase the budget deficit fivefold, sharply reduce the tax burden and spend almost half of the country's gold and foreign exchange reserves on investment over the next five years. There was a proposal to introduce a tax on the export of capital - that is, a kind of tax on the rich.

Adviser to the President of the Russian Federation Sergei Glazyev, during a round table held on Wednesday on the topic “The Russian economy in the context of increasing sanctions from Western countries,” spoke about the difficulties that are preventing the turn of the economic course from being realized. “If the Central Bank continues to pursue a policy of strangling our commodity producers, without increasing the volume of money, without creating mechanisms for long-term cheap credit, then there will be no import substitution. Central Bank policies do far more harm than economic sanctions. And in total, the Central Bank’s policies and sanctions are putting our economy on the brink of disaster. This year we need to give the West loans worth $120 billion, which is about 4 trillion rubles. plus import substitution - 1 trillion rubles, no less. Thus, the Russian economy lacks 5 trillion rubles. to maintain simple reproduction,” Glazyev noted. According to the Presidential Advisor, it is necessary to provide our corporations with long-term cheap loans for 4 trillion rubles. under the conditions under which they are provided abroad.

But to prevent capital from “flowing” to the West, additional measures are needed. “I would propose a capital export tax. Many countries use this tool. If we understand that the export of capital occurs for the purpose of tax evasion, then what prevents us from introducing such a rule as the imposition of VAT on financial transactions. If this is a legal operation and the import goes into the country, then this tax is counted towards VAT. And if it’s illegal, then there’s a fine for the export of capital,” Glazyev said. At the same time, the adviser proposed returning the tax for companies exporting money for legal import transactions. Let us note that the Bank of Russia forecasts capital outflow from Russia in 2014 at $90 billion, and the Ministry of Economic Development expects this figure to be $100 billion, although no action follows these forecasts. “This issue is absolutely taboo for the Central Bank; the Central Bank pretends that this does not concern it. With such a policy, we risk suffering from lethal economic sanctions. Therefore, the main problem that needs to be solved today is overcoming the stubborn reluctance of the Central Bank to defend the interests of national security, ensure the economic security of the country and stop following the interests of foreign speculators,” Glazyev said.

Let us note that the Bank of Russia forecasts capital outflow from Russia in 2014 at $90 billion, and the Ministry of Economic Development expects this figure to be $100 billion, although no action follows these forecasts.

“This issue is absolutely taboo for the Central Bank, the Central Bank pretends that this does not concern it. With such a policy, we risk suffering from economic sanctions in a lethal way. Therefore, the main problem that needs to be solved today is overcoming the persistent reluctance of the Central Bank to defend the interests of national security, ensure the economic security of the country and stop following the interests of foreign speculators,” Glazyev said.

Economist Mikhail Khazin, during a round table on the topic of sanctions, noted that reorienting the Government and the leadership of the Central Bank to a new course will not be easy.

“The current leadership of the Russian Government and the leadership of the Central Bank are people who have made their careers within the framework of interaction with the dollar center, so to say that they will build something alternative to the dollar system is at least naive. They will never do this. there will be," the economist said.

Meanwhile, it becomes obvious that the Bretton Woods system with all its institutions - the IMF, the World Bank and the dollar issuing center - is undergoing a crisis, which the United States is trying to overcome at the expense of other participants in the world economy, Khazin is sure. Thus, the global economic problem once again turns out to be inseparable from politics.

“Russia in this case acts as the most public opponent of the United States. In reality, China and some of the elites of Western Europe resist American pressure much stronger than Russia, but this happens behind the scenes. And in the situation with Ukraine, Russia did it publicly, which led to two consequences. First, the whole world saw that there are forces in the world that do not want to fall under the United States. If the economic situation in the world were good, this would not have caused a strong reaction, but the standard of living of the population was falling significantly. they will not get their piece of the world dollar system, and for them it is fundamentally important that there is someone who can exert some kind of resistance. As a result, Russia’s authority in the world is not among the economic elites, but among the people as a whole, small and medium-sized states. grew very strongly. As a result, this caused very strong opposition. This is the reason for the sanctions,” the economist notes.

So, it is obvious what actions the circumstances require, but all of them are deoffshorization, profitable “long-term” lending.

“The Ministry of Finance proposes to include in the upcoming law on the federal budget for 2015-2017 a refusal to replenish the Reserve Fund from additional oil and gas revenues within the framework of the “budget rule.” This is stated in the draft federal budget for 2015 and the planned years 2016-2017, prepared by the ministry. It is planned to reduce the government borrowing program by the amount of these revenues, the cost of which is negatively affected by the geopolitical situation and the Western sanctions regime.

The proposal to take these changes into account already at the budget planning stage was voiced by Deputy Minister of Finance of the Russian Federation Alexey Lavrov at a meeting of the Russian tripartite commission, uniting representatives of the government, employers and trade unions.

According to the budget rule, oil and gas budget revenues received above the base oil price ($96 per barrel) are sent to the Reserve Fund, the deputy head of the Ministry of Finance recalled.

“We propose to modify this rule and not accumulate these funds in the Reserve Fund, but direct them already at the planning stage to replace government borrowing,” Lavrov said, clarifying that this practice could extend to the current process of preparing the budget for the next three years.

The borrowing program for 2015 is still unchanged - it is planned to attract about 1 trillion rubles on the domestic market, and $7 billion on the foreign market, Finance Minister Anton Siluanov said a few days ago.

But the draft budget for 2015-2017, published today, provides for a reduction in domestic government borrowing by more than half: in 2015 - to 280 billion rubles (in the current budget law - 676.6 billion rubles), and in 2016 - to 299 billion rubles (against the planned 745.5 billion rubles).

“We are moving away from the previously prevailing tactics and strategy - “borrow and save,” which allowed borrowing and accumulating funds in the Reserve Fund,” Lavrov said. “Since we have such a situation, we consider it right not to direct these funds to the Reserve Fund, but to reduce them the largest volume of government borrowing and public debt."

The Ministry of Finance thus plans to consolidate the practice that has developed this year, the Deputy Minister of Finance said. In 2014, the ministry already abandoned plans to replenish the Reserve Fund (initially it was planned to allocate 251 billion rubles there).

“This regime is in effect for this year, and will be in effect next year - if we lack non-oil and gas revenues, or sources of financing the deficit, we have the right not to send funds to the Reserve Fund, and even use funds from the Reserve Fund,” concluded Lavrov.

Previously, Siluanov reported that next year it is planned to replenish the Reserve Fund by 350 billion rubles.

“We, of course, in these conditions are unlikely to be able to replenish it,” he admitted. “But we will use the same principle as this year. If our foreign markets are expensive or closed, then we will not replenish the Reserve fund, and we will reduce the borrowing program."

The Ministry of Finance estimates that the volume of the Reserve Fund in 2015 will increase by 70 billion rubles - up to 3.542 trillion rubles, and in 2016 - by 119 billion rubles - up to 3.661 trillion rubles, according to the department’s materials prepared for the meeting of the tripartite commission on socio-economic questions."

In economics .

Economic sense

The budget rule is a way to sterilize oil and gas budget revenues through the formation of special budget funds. The rule is used as follows:

According to the official position of the Ministry of Finance, the budget rule reduces the dependence of the federal budget on the state of world markets, and also provides a “safety cushion” in the event of a crisis similar to the crisis of 2008.

History of the rule

The principle embedded in the budget rule has actually been in effect since 2004, when the Stabilization Fund was formed. For this fund, the following formation procedure was in effect: oil and gas revenues over cut-off prices, which was $20 per barrel of oil in 2004, $27 in 2006. At the same time, the dynamics of oil prices significantly outpaced the growth of the cut-off price. According to experts, the Stabilization Fund received up to ¾ of additional income from favorable external conditions.

Order of the Government of the Russian Federation dated March 4, 2013 No. 293 of the state program “Public Finance Management” provides for the possibility of subsequent extension of automatic stabilizers to other elements and levels of the budget system, among other things, in terms of the debt policy of the constituent entities of the Russian Federation and municipal entities. Employees of the Ministry of Finance do not deny the possibility of applying the budget rule in the future for the budgets of regions and municipalities.

Opinions of economists and government officials

The budget rule performs two main functions: it determines the algorithm for distributing oil and gas revenues among sovereign funds and sets restrictions on the expenditure side of the budget. In connection with the latter function, there is a discussion in the expert community about the advisability of establishing such a rule.

There are two main views on the problem:

• it is necessary to soften the budget rule in terms of restrictions on government spending;
• it is necessary to maintain a strict rule limiting government spending.

The easing of the budget rule is consistently advocated by Russian Presidential Assistant Andrei Belousov, who proposed lowering the Reserve Fund threshold from 7 to 5% of GDP in order to direct the freed-up funds to the construction of roads, the condition of which hinders the growth of the country’s economy, as well as Deputy Minister of Economic Development Andrei Klepach.

This position is supported

The new budget rule, which should restore strict approaches to the use of oil and gas revenues from 2020, will take as a basis the oil price of $40 per barrel and will take into account the cost of servicing the public debt

Russian Finance Minister Anton Siluanov (Photo: TASS/Alexander Astafiev)

No primary deficiency

The new budget rule - a system of rules for the use of oil and gas revenues - will come into effect in 2020, set the base price of oil at $40 per barrel and will limit budget expenditures so that they must be equal to base revenues minus interest costs for debt servicing, according to the Moscow Financial forum on Friday, Finance Minister Anton Siluanov. “The preparation of the fiscal rule, which we believe can be implemented from 2020, will be that at a price of $40 per barrel we must have a zero primary deficit. That is, all those debt servicing expenses that we will include in budget expenses will precisely constitute the deficit that we can afford,” Siluanov said, as quoted by an RBC correspondent.

In other words, according to the new budget rule, the Ministry of Finance will count oil and gas revenues at a price of $40, add projected non-oil and gas revenues to them (this amount will be considered basic income) and plan budget expenses so that they are no higher than basic income, not counting interest payments on debt .

The new version of the budget rule will be the fourth since the introduction of this practice of public finance management in 2004.

The old budget rule, which was in force in 2013-2015, implied that the budget expenditure limit was equal to basic income plus 1% of GDP. The new rule will replace this 1% with the amount of interest costs, which is currently within 1% of GDP. According to the budget law for 2016, interest expenses this year are planned at 646 billion rubles, or 0.8% of GDP. The primary budget deficit (the deficit excluding debt servicing costs) is planned at 2.2% of GDP, and the Ministry of Finance wants there to be no primary deficit from 2020.

Why $40?

According to the old rule, the base price of oil for calculating oil and gas revenues that can be used to finance budget expenditures was determined as the average annual price of Urals oil over a five-year period with an annual increase in this period by one year up to ten years (averaging over a ten-year period had to start with the budget 2018). Surplus revenues (oil and gas revenues from the excess of real prices over the base price) were transferred to sovereign funds. The rule worked with rising oil prices, but in 2015 the estimated price of oil under the fiscal rule was $96, while the actual price fell to $50. Therefore, for 2016, the budget rule was suspended, and in its place temporary rules were introduced (valid until February 1, 2017), allowing oil and gas revenues and savings from reserve funds to be spent to finance federal budget expenditures.

It is now proposed to use the conservative price of $40 per barrel in the budget rule instead of the average oil price for previous years. This price was taken because it corresponds to the profitability threshold for shale oil production in the world ($40-50), explains a high-ranking federal official familiar with the plans of the Ministry of Finance. According to him, the department soon wants to submit a legislative initiative to the new Duma in order to introduce a budget rule from 2020. A representative of the Ministry of Economic Development told RBC that the document had not been received by the ministry.

The average price of Urals in January-August 2016 was $39.36 per barrel, and in August it exceeded $40 per barrel ($43.9). If the new budget rule were in effect now, the reserve fund would be replenished in August.

The question of the cut-off price - $40 or closer to $50 - is still to be discussed in the government, a federal official tells RBC. The Ministry of Finance proposes to index it annually to dollar inflation (in 2014 it was 1.6%, but in 2015 - only 0.1%), a source close to the Ministry of Finance previously told RBC. In general, the fall in oil prices and volatility in the foreign exchange market forced the Ministry of Finance to take a different look at the purpose of the budget rule. Its meaning should be broader than just an opportunity to stabilize state finances; the task is to “isolate the economy from the volatility of oil prices,” says an interlocutor in the government’s financial and economic bloc. We are talking about “so that the real effective exchange rate of the ruble does not fluctuate so much along with oil prices and that relative prices in the economy, inflation, exchange rate conditions and everything that affects the profitability of companies in different sectors do not fluctuate so much.”

“We are guided by the fact that our budget deficit should gradually decrease by one percentage point annually. If we choose $40 as the cut-off price, then we arrive at a balanced budget by 2020, if we choose $50, we arrive at 2019. Depending on what the cut-off price is, the moment will be determined when the budget rule will work fully,” says an official from the financial and economic block.