Russia cuts benefits to pensioners

RUSSIA: Russia yesterday rushed through a controversial law to cut benefits to pensioners and the disabled after a week of nationwide…

RUSSIA: Russia yesterday rushed through a controversial law to cut benefits to pensioners and the disabled after a week of nationwide protests.

The new law is one of the most controversial of President Vladimir Putin's four years in office. It slashes, at a stroke, free medical care, transport and other benefits enjoyed by pensioners, war veterans and the handicapped.

In its place will be monthly cash payments of up to €45, an amount opponents say is grossly inadequate.

Controversy has been increased because of the way the law has been rushed through. In under a week the law has been presented to the lower house of parliament, passed its second and third reading, and now it has been ratified by the upper house holding an unusual Sunday sitting.

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Some opposition MPs say they were given less than 24 hours to read the 700 pages of new legislation before being called to vote.

Yet such is the dominance of pro-Putin parties that the law was passed with huge majorities. Yesterday's vote saw 156 of the Federation Council, representing Russia's regions, approve the bill and just one vote against.

The lone opponent, a senator Mr Anatoli Karabinkov, said the law would not help reform.

"It doesn't change anything, and it won't help the people in a real way."

Russia's system of social benefits has long been seen as an obstacle to reform because they distort the economy. And some reformers are likely to welcome the decision of the Putin administration to grasp this most sensitive nettle more than a decade after the country officially became a free-market economy.

However, there is concern among opponents that the legislation was rushed through before it could be properly tested.

Many worry that the promised payments will not be made because the government has ordered the regions to pick up half the tab - without indicating where they are to get the cash from.

"The idea is right; these benefits belong to the past," said Mr Vadim Dubnov, an editor of Moscow's Novoy Vreme magazine. "But in practice it will turn out wrong. The federal budget doesn't have the money, and the local governments don't know where to get the money."

Protests took place in Moscow and across Russia by pensioners and war veterans last week, though only a tiny group demonstrated outside the Federation Council for yesterday's final vote.

A bigger test for Mr Putin is likely to come when the benefits are withdrawn, due to begin early next year.

This law comes with the Kremlin cracking down on a whole range of subsidies that have seen ordinary Russians faced with rising gas and electricity bills. The Moscow Metro has seen its prices almost double to 10 rubles (a third of a dollar) in a year.