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15:56 GMT +3 hours20 December 2014
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Russia signs financial aid deals with Abkhazia, South Ossetia-2

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Russia on Tuesday signed agreements with Abkhazia and South Ossetia on giving the republics financial aid in socio-economic development and balancing their budgets.
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MOSCOW, March 17 (RIA Novosti) - Russia on Tuesday signed agreements with Abkhazia and South Ossetia on giving the republics financial aid in socio-economic development and balancing their budgets.

The deals between the finance ministries provide for Abkhazia to receive 2.36 billion rubles ($68 million) from the Russian federal budget and South Ossetia 2.8 billion rubles ($81 million).

Russia recognized the former Georgian republics of South Ossetia and Abkhazia as independent states on August 26, 2008, two weeks after the end of a five-day war with Georgia. The conflict began when Georgian forces attacked South Ossetia in a bid to bring it back under central control.

The Russian Finance Ministry said on Monday that the agreements were based on the friendship, cooperation and mutual assistance treaties that Russia and the two Caucasus republics signed in Moscow on September 18, 2008.

The ministry said that despite the overall cuts in the federal budget, the level of financial assistance to the republics had not been reduced, and added that South Ossetia would also receive 8.5 billion rubles ($246 million) to rebuild housing, social amenities and utilities damaged as a result of the August 2008 war.

Nicaragua has so far been the only other country to follow Russia in recognizing South Ossetia and Abkhazia.

Russia will continue to provide free aid to South Ossetia and Abkhazia in 2010-2011, Russian Deputy Finance Minister Anton Siluanov said.

"We plan within the three-year budget to continue cooperation with our neighbors. This is not one-time assistance, it will continue," Siluanov said.

In addition, the Russian Finance Ministry is ready to discuss the possibility of extending credit to both republics. "But any loans should be extended to those projects that can give returns and provide the treasury with financial receipts," Siluanov said.