STUTTGART, October 28 (RIA Novosti) - Some aspects of the YUKOS oil major affair are due to the absence of fair competition conditions in Russia, Prime Minister Mikhail Fradkov said at a Russian-German conference on small and medium business in Stuttgart.

Mr. Fradkov said Russia had to ensure a proper competitive environment. He added that its absence encourages corruption.

Mr. Fradkov said it was also crucial to streamline anti-trust measures. "This is an issue of prime importance," said the Russian premier.

Mr. Fradkov believes the Federal Anti-Trust Service will have major influence on activities in this sphere. The service is working out anti-trust tools heeding global practice in the sphere, according to the premier.

Mr. Fradkov said the Russian government would try to contain inflation within 10% in 2004. Then the government will work to reduce inflation gradually but steadily, according to him.

Mr. Fradkov emphasized that the Russian economy was growing in a sustainable way. GDP has risen 7% over the past 7 months, permanent investment increased 12%, while the population's real incomes have grown 9.5%. Russia's trade balance reached $200 billion, with its surplus account being $50 billion, according to the premier.

Mr. Fradkov said Russia intended to abolish currency regulation and control starting from 2007, which met relevant international rules.

Mr. Fradkov said it was necessary to enhance the banking sector and the stock market's role in the Russian economy.

"Russia's banking reform ensures a non-discriminatory access to the Russian banking sector for foreign capital. We are thereby continuing to move towards openness and changing banks over to IAS (International Accounting Standards)," said Mr. Fradkov.

Boosting foreign capital's presence on the Russian market will promote healthy competition that will help create an appropriate banking system, according to Mr. Fradkov.

As Mr. Fradkov spoke about trade and business cooperation with Germany he expressed readiness to encourage Russian companies' participation in European projects involving Germany, for example, the one for the production of A-300 series airbuses.

Mutual commodity turnover between Russia and Germany reached its record figure, 25.5 billion euros, in 2003, according to the premier. Germany accounts for 10% of Russia's foreign trade. However, Mr. Fradkov believes the outlook for Russian-German cooperation is even more impressive.

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