Russia's Finance Ministry Gains Sweeping Powers Over Budget and Debt

Russia's State Duma has swiftly approved significant amendments to the Budget Code, granting the Finance Ministry unprecedented authority over federal spending and domestic borrowing. The changes, passed with minimal public discussion, empower the ministry to increase expenditures unilaterally and borrow any amount from the domestic market, effectively bypassing established state debt limits.

These amendments fundamentally alter the budget process. The Finance Ministry can now exceed budgeted allocations without needing to amend the budget law itself. Furthermore, it can borrow unlimited funds domestically, disregarding previously set ceilings on state debt. This move effectively transforms the budget law from a binding document into a mere "declaration of intent," according to critics.

The legislative changes also raise questions about the informal leadership of Russia's financial and economic bloc. The Finance Ministry, under Minister Anton Siluanov, appears to be consolidating power. Siluanov himself did not attend the Duma session where the amendments were debated, reportedly meeting with President Vladimir Putin instead. His deputy, Irina Okladnikova, addressed the deputies' questions, assuring them that the changes were necessary to prevent a budgetary crisis.

Critics argue that these amendments diminish the role of the Duma deputies, who formally vote on the budget but now have little influence over its actual implementation. The speed at which the amendments were passed, from submission to final reading in approximately two days, left little time for thorough review or debate. This rapid legislative action, coupled with the Finance Ministry's expanded powers, suggests a significant shift in Russia's economic governance, potentially signaling a new favorite in President Putin's financial inner circle.

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There is no budgetary crisis, and the amendments are precisely needed to prevent it from happening.