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Russia, Italy to Give Up 10% South Stream Stakes to EDF

Russia and Italy will each give a 10 percent stake in the South Stream pipeline to France's EDF, Prime Minister Vladimir Putin said Tuesday.

"We will do it concurrently — the Italians and us, 10 percent each," Putin said on a visit to Ukraine following a meeting with Italian Prime Minister Silvio Berlusconi in Italy.

EDF is set to get a 20 percent stake in the South Stream gas pipeline designed to bring gas to Europe, with work on the project due to start in the first half of 2012, Putin and Berlusconi said Monday.

Separately, Putin said Russia's budget will lose $3 billion this year and $4 billion in 2011 as a result of agreeing last week to a 30 percent cut in the price of its gas supplies to Ukraine.

"In essence it will mean an increase in the budget deficit for us," he said. "These are serious parameters, but we will manage."

Russia had expected a deficit of 3 trillion rubles ($103 billion), or 6.8 percent of gross domestic product this year.

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