Russia PM, EU economic crisis 'serious threat'


Russia's Prime Minister Dmitry Medvedev (L) speaks during an interview with reporters in the Gorki residence outside Moscow. Pic:AFP

Moscow: Prime Minister Dmitry Medvedev said that Moscow was nervously watching the economic crisis in the European Union, which he said represented a serious threat to Russia's own economic performance. In a joint interview with Agence France-Presse and Le Figaro, Medvedev complained that EU leaders sometimes lack the "energy and will" to solve their problems amid squabbles over whether to back austerity or growth.

"We see this as a very serious threat," said Medvedev ahead of a working visit to Paris starting Monday for talks with President Francois Hollande. "We are to a large extent dependent on what happens in the economies of the EU." Medvedev noted that EU states account for half of Russia's trade volume while Moscow holds some 41 percent of its foreign currency reserves in euros.

"We are watching nervously. Sometimes it seems our European partners lack the energy and will to take decisions. And there is that endless dispute of what is better, fiscal consolidation or development," said Medvedev. "It seems our European partners are moving towards an agreement but the main thing is that it is not late," he added.

He was speaking as talks on the European Union's trillion-euro budget ended in deadlock Friday as leaders of the bloc's 27 member states failed to overcome seemingly irreconcilable differences on how to reduce spending. Medvedev said that Russia is paying particular attention to what he described as the "weak links" in the euro zone such as Greece and Spain.

But he emphasised that Russia has no intention of moving out of euros in its reserves even though he acknowledged bringing up the importance of the currency in conversations with EU leaders. "So I have always said to my colleagues, including the president of France and German chancellor, that we very much hope that the euro continues to exist as a stable reserve currency."

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