Russia could shoot $10 billion into sluggish Europe
Though European debtors haven’t yet officially applied for financial assistance from Russia, Dvorkovich says if they file, “the relevant authorities – the Finance Ministry, Central Bank, government, and the president, whose approval will also be required- will consider the motion, and the possibility of rendering assistance, seriously."
The presidential aide also noted that Russia would help through the IMF mechanism, with the international body ready to provide for a total of $1 trillion, where Russia could potentially contribute $10 billion.
"Their (money) use is reasonable. We are interested in European stability," Dvorkovich said.
Indeed, in the era of globalization, when most markets are interconnected, the debt crisis in some European countries could turn systemic, as “a lion’s share of government debt in the troubled countries belongs to private banks, and default could make them go bankrupt,” explains Pavel Emelyantsev, Investcafe analyst.
The European Union is one of Russia´s closest economic partners, with trade turnover between January and August 2011 comprising 48.4% of Russia’s total foreign trade turnover to reach $254.8 billion. So, “there’s nothing surprising in the fact that our country is ready to support the stability of the European financial system by means of additional money injection,” Emelyantsev concluded.
Earlier, presidential aide Dvorkovich spoke about the possibility of Russia buying Spanish debt, with Greece and Cyprus also counting on money from Moscow. However, authorities in this country have always stressed that they needed Brussels to present a “concrete, understandable strategy to pull out of the crisis.”