Russia gives cool welcome to euro summit deal | Reuters

MOSCOW | Thu Oct 27, 2011 8:49am EDT

MOSCOW Oct 27 (Reuters) - Russia gave a cool welcome on Thursday to a euro-zone summit deal to halve Greece's debts and boost the lending power of a regional bailout fund, saying it would prefer to channel aid to the currency union via the International Monetary Fund.

"The markets consider (the decisions taken at the summit result) to be quite adequate, and will regard them as sufficient for the time being," Arkady Dvorkovich, economic adviser to President Dmitry Medvedev, said.

"Right now it's difficult to say whether they will be sufficient for the long term."

Russia, which holds the world's third-largest foreign exchange reserves of over $500 billion, has generally been sceptical towards European calls to provide direct support to the euro zone or its individual members.

Prime Minister Vladimir Putin said on Oct. 11 that Europe's leading economies "have enough resources to resolve their own problems", adding that it was unlikely that major emerging markets would offer coordinated financial help.

Officials have consistently said that Russia would consider buying bonds issued by the European Financial Stability Facility, whose lending power under a summit deal struck in Brussels will rise to 1 trillion euros ($1.4 trillion).

But Moscow has also expressed its preference for channelling support to the euro-zone via the IMF's lending arrangements, and Dvorkovich said that should form the basis for a common position for the "BRIC" nations at a Group of 20 summit next week.

The BRICs -- Brazil, Russia, India and China -- form a caucus of fast-growing emerging market economies. They have relatively low debts and hold high foreign exchange reserves as a buffer against external shocks.

"We have a coordinated position with the other BRIC countries," Dvorkovich told a conference. "We are prepared to participate in stabilisation mechanisms, above all via the IMF, and are ready if necessary to step up our efforts."

Dvorkovich added there should be no delay in decisions to redistribute IMF quotas linked to Russia's increased financial contribution, which should boost the say of emerging markets in the Fund's decision-making.

No comment was available from the Finance Ministry.

Source http://feeds.reuters.com/~r/reuters/USdollarreportNews/~3/OR46UG1cUWg/eurozone-russia-idUSL5E7LR3XZ20111027



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