Russia to cut defence budget by 15%

Russia is to reduce its defence budget for the current year by 15 per cent in response to the financial crisis, the head of the State Duma's defence committee said on Thursday, Interfax reported.
"A decision was made for a reduction of 15 per cent and it is highly likely that this is not the last decision on the budget," said Mikhail Babich.
He added that spending on new weapons would remain unchanged.
"The important question now is to know which lines of military spending will be reduced in order to not affect the fundamentals we want to preserve: state order and social spending," he said.
This year the Defence Ministry's budget was set at around $39.5 billion.
Russia's authorities indicated Feb. 5 that the 2009 budget deficit would be at least 8% of GDP because of the economic crisis that has hit Russia.
Russia's economy, driven in recent years by the soaring price of raw materials, has been hit particularly hard by the collapse of oil prices. The rouble has lost a third of its value against the euro and the dollar since last November and the government says it expects somewhere between 0%-0.2% decline in GDP this year.