Posted on 06/09/2010 12:05:04 PM PDT by Tailgunner Joe
Russia -- which holds over 40 percent of its forex reserves in Euros -- trusts and believes in the single European currency and is sure its current woes are only temporary, Prime Minister Vladimir Putin said.
"We trust and believe" in the Euro, Putin told AFP in an interview this week in the southern Russian Black Sea resort city of Sochi.
"We would not hold such a huge amount of our currency reserves in the European currency if we did not."
The European Union is by far Russia's biggest trading partner and Moscow has warily eyed the financial problems that have hit the euro zone since the extent of Greece's budget problems became apparent.
Russia was itself hard hit by the global economic slowdown, with the economy contracting 7.9 percent last year, but it has managed to avoid a second wave of crisis like that suffered by debt-ridden Greece.
The powerful prime minister, seen by most as Russia's de-facto number one, said there was no objective reason for the plunge of the Euro and he was sure its problems would not last.
"In my view, there exist no objective conditions for the fall of the Euro," said Putin, who was due Thursday to start a two-day visit to Eurozone powerhouse France.
"Yes, there are some difficulties. I am certain they are only temporary."
The Euro has suffered a dizzying fall over the last weeks over worries about the budget situation of several European countries, with the common currency this week dipping below 1.19 dollars for the first time in over four years.
Putin however said Russia saw no need to change the structure of its reserves, held largely in Euros and US dollars with around 10 percent in sterling and just over one percent in yen.
"On the whole, the European economic authorities are acting absolutely correctly.
"And this confirms yet again that we have no plans to change our relationship to the Euro as a reserve currency and in its proportion of our reserves."
Russian President Dmitry Medvedev, who took over the Kremlin from Putin in 2008, has repeatedly suggested that new reserve currencies should appear to end the domination of currencies like the dollar.
Putin, whose own government is also seeking to implement economic reforms, said "much still needs to be done" in Europe to work out problems like raising fiscal discipline.
"But the fundamentals of the European economy are on the whole pretty strong," he said.
"No one has an interest in the collapse of the European Union."
The prime minister, who famously spent several years as a KGB agent stationed in Germany under the Soviet Union, also expressed admiration for the European Union.
The EU was "created with the strength of many generations, it was so hard to build, and I am convinced it is an absolutely correct process that is positive for the world as a whole, for the global economy, for global security."
"I believe that our partners have managed to cope with the problems, which are temporary ones," Putin told reporters during a visit to Finland.
"But certain sacrifices will have to be made for that," he added, but did not elaborate.
That’s good to know, I wonder why the Euro is below $1.20 today? Maybe the Germans don’t trust the Euro? When that happens there will be no Euro.
the euro.. the left’s dream to have the dollar relegated to second status.
The Euro was doomed from the beginning. A common currency issued by several independent nations with wildly varied fiscal policies and economic pressures.
The only currency that would really be a threat to the USD’s pre-eminent position would be the Chinese Yuan, were it ever to be made freely convertible at some point in the medium to long term future...
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