Russia Ready to Offer Europe $10 Billion in Aid Through IMF
Russia is prepared to help Europe cope with its debt crisis by making as much as $10 billion available through the International Monetary Fund and hasn't ruled out offering bilateral help to European Union nations.
"It's really important to us that Europe remains stable," Arkady Dvorkovich, the Kremlin's top economic aide, told reporters in Moscow today. "If Europe becomes unstable, then the Russian economy will enter a period of instability."
President Dmitry Medvedev will join other Group of 20 leaders in Cannes, France, this week for talks on easing a sovereign-debt crisis consuming Greece and threatening Spain and Italy. Russia, holder of the world's third-largest international reserves, will demand that all countries start reducing their budget deficits, Dvorkovich said. "We're going to take an inflexible stance on this," he said. "Our BRICS partners have a similar position. We'll coordinate on this."
The group of emerging economies, comprising Brazil, Russia, India, China and South Africa, said at a summit in Washington last month that they may support global financial stability through the IMF and other international organizations. The countries have linked the aid to demands for greater representation at the the Washington-based lender as their importance to the global economy grows.
Cyprus Loan
The government of Cyprus, the euro area's third-smallest economy, said Oct. 5 it was ready to sign a deal for a 2.5 billion-euro ($3.5 billion) loan from Russia, helping the east Mediterranean island control its borrowing costs. Russia is continuing talks with Cyprus on providing a loan, Deputy Finance Minister Sergei Storchak said in an interview last month.
French President Nicholas Sarkozy and his Chinese counterpart, Hu Jintao, agreed last week to "cooperate closely" on ensuring global financial stability as Europe seeks assistance from China and other cash-rich developing countries. Chinese Vice Finance Minister Zhu Guangyao said his government, holder of the world's largest reserves stockpile, was seeking more information on how Europe's bailout fund will be used.
"Above all, the risks are from the fact that so far neither Europe nor the U.S. has managed to fully fix their fiscal health," Dvorkovich said. "Stabilization is possible, and there's enough money. Now everything depends on whether the national governments meet their obligations."
Article ©2011 BLOOMBERG L.P. ALL RIGHTS RESERVED; article also appeared at www.businessweek.com/news/2011-10-31/russia-ready-to-offer-europe-10-billion-in-aid-through-imf.html
