Russia ready to give ‘practical, real’ aid to EU, Putin says
Russia is prepared to provide “practical, real aid” to Europe and wants to channel its assistance “first of all” through the International Monetary Fund, Prime Minister Vladimir Putin said.
Russia, holder of the world’s third-largest international reserves, is “is ready to join and in fact has already joined in solving the problem of overcoming the crisis, including in the euro zone,” Putin said during a meeting with German business leaders in Moscow.
Europe’s failure to staunch the two-year-old turmoil turmoil threatens to weigh down on the global economy and trigger another financial downturn, eroding demand for Russia’s commodity products. The world’s biggest energy exporter wants to increase the weight of developing nations in the IMF after pledging to aid the euro region, according to the Kremlin.
Russia has about $100 billion it can contribute to international bailouts, according to Commerzbank AG. The country’s reserves rose to $525.6 billion as of Nov. 1, an increase of $8.71 billion from the previous month.
New governments in Greece and Italy are attempting to tackle the region’s bond crisis, after investors sent yields in those nations surging on concern the authorities will have trouble paying their debts. Putin urged taking “coordinated action” to overcome the crisis.
“In a modern global economy, all processes are interlinked and risks at some markets are inevitably reflected on the general market,” Putin said. “Russia’s situation is quite stable, although that doesn’t mean we don’t have certain difficulties.”
The IMF may need as much as $300 billion to finance bailouts of debt-encumbered European nations, Arkady Dvorkovich, chief economy aide to Medvedev, said Nov. 9. Russia’s contribution to any financial-aid package will correspond to its 3 percent share in the IMF, according to Dvorkovich said.
The euro region reducing the number of its members may cause “irreparable damage,” President Dmitry Medvedev told chief executive officers on Nov. 12 at a summit as part of the Asia-Pacific Economic Cooperation forum in Honolulu. “We are fans of the euro and of the euro economy.”
European policy makers are looking beyond their borders to help more than double the size of their 440 billion-euro ($598 billion) rescue fund to 1 trillion euros. The BRICS group of emerging economies, comprising Russia, China, Brazil, India, Brazil and South Africa, discussed aid for the euro zone earlier this month at the Group of 20 summit in Cannes, France. Medvedev met IMF Managing Director Christine Lagarde in Moscow Nov. 7.