16:08 GMT +318 December 2018
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    MOSCOW, May 20 (RIA Novosti) - The Russian military can now choose a flat, after they have received budget funds or taken a mortgage on state guarantees, Minister of Economic Development and Trade German Gref said in the Government House on Thursday. He was delivering a speech at a briefing summing up the cabinet discussion of the law On Accumulative and Mortgage System of Housing Provision for Servicemen.

    This system will allow a serviceman's family to buy housing even if he dies or falls ill.

    According to Mr. Gref, the state will make accumulations on special accounts regardless of how long the deceased serviceman served in the army.

    The minister added that the current system of housing provision "is a huge moral problem if a military dies." "People going into a battle should know that the state will fulfil its obligations and that this system will provide for it," stressed Mr. Gref.

    The minister also emphasised that, apart from death, there were another three reasons for a serviceman to get money on his accumulative accounts, even after serving less than 20 years envisaged by the law.

    "Above all, these reasons are linked to personnel layoffs and other organisational and staff measures which may take place regardless of the serviceman's will. Another reason is illness, and the last one - viable family circumstances," said German Gref.

    He also remarked that the government had given instructions to specify the latter and explain the term "family circumstances." The system in hand encourages servicemen to serve till the end of their term, believes the minister. According to the law, if a serviceman changes his mind and retires before the 20-year term expires, he will have to reimburse the accumulated funds to the state, and if he had mortgaged a flat, he will have to pay back the price of the flat within ten years, stressed German Gref.

    Russian banks will hail the new system of housing provision for the military, the minister believes.

    "Russian banks will queue up to have such a mortgage taker as a serviceman backed up by the state and the federal budget - it is a dream," said the minister.

    Mr. Gref recalled that according to the system, loans would be given to servicemen on the common basis, but the state will pay the interest.

    "Moreover, if a serviceman fails to fulfil his obligations, the claims will be readdressed to the state," said the minister.

    According to the documents of the ministry of economic development and trade, from January 1, 2005, about 60,000 servicemen will participate in the new system, and by 2030 the figure will go up to 800,000 people. According to the draft law on this system, in 2005 the budget will allocate 1,300 million roubles ($1 equals about 29 roubles) for servicemen's accounts, and in 2006-2009 - an additional 2 billion roubles, and in 2009-2029 - another billion roubles annually.

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