MICEX traders have resumed transactions following an hour-long suspension and a day of record losses. The government may resort to tax cuts – its $20 billion cash injection has not eased lending rates. The current problems may derail Russia’s ‘powerful negotiating position’, but despite the turmoil, an optimistic Prime Minister Vladimir Putin says Russia’s defence spending will grow by 27% in 2009 and insists that the economy is strong enough to weather the storm. Or is Russia ‘far more vulnerable than it thinks it is. Or the government thinks it is’? There is still some debate as to how closely Russia’s troubles relate to the Lehman collapse. The Duma is taking steps to reassure business owners that it will reduce inspections.