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Today in Russian Business – Oct 2, 2008

Prime Minister Vladimir Putin’s announcement that social security taxes paid by businesses will rise by as much as 8% in 2010 to strengthen the pension system has frightened businesses. Putin again blamed the ‘irresponsible’ US for current global financial troubles. On mobile retailer Yevroset’s ‘falling prey to the financial crisis’. As part of the $180 billion crisis rescue package, Russia’s central bank will be able to start lending money to credit-rated banks without collateral by the end of the year. Despite such measures, many banks will face liquidity issues, although Sberbank and VTB are currently in the strongest positions. Sberbank has begun raising interest rates on loans to retail clients. Russia is apparently planning to spend $191 billion on improving Moscow’s roads from 2010-2015. Russia’s defense budget is to be extended by $3.1 billion next year to cover losses from the Georgian war.