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Weapons of Mass Destruction (WMD)

Russia to earmark $220 mln to bail out defense firms

RIA Novosti

02/03/2009 14:46 MOSCOW, February 2 (RIA Novosti) - The Russian government will provide 7.9 billion rubles ($220 million) in financial assistance to defense companies to prevent them from going bankrupt, a deputy prime minister said on Monday.

Sergei Ivanov said in the past three years the government has granted subsidies to dozens of ailing defense firms, which had saved them from bankruptcy.

Russia's finance minister said on Thursday Russian banks would grant 56 billion rubles ($1.6 billion) in loans to defense industry firms.

The list of companies to receive the loans includes the MiG aircraft maker, the Khrunichev Design Bureau, and the Gorbunov Kazan-based aircraft maker.

Russia's deputy defense minister said last Monday state defense contracts will not be subject to cuts this year despite the ongoing financial crisis.

The Defense Ministry will transfer 35% of military contract payments in the first quarter of 2009. The government is to disburse a total of 1.3 trillion rubles ($37 billion) to defense contractors this year.

The state arms production budget for 2009-11 has been approved at 4 trillion rubles ($115 billion).

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