Russia may join euro eventually

Russia may join euro eventually, put it ahead of dollar, Putin says

Submitted by cpowell on Fri, 2010-11-26 23:44. Section: Daily Dispatches

By Louise Armisted
The Telegraph, London
Friday, November 26, 2010

http://www.telegraph.co.uk/finance/currency/8163347/Putin-Russia-will-jo...

Vladimir Putin said it is "quite possible" that Russia will one day join the eurozone and create a currency that would eclipse the US dollar as the global reserve standard.

Speaking at a conference in Germany the Russian prime minister, who is in the country for talks with Chancellor Angela Merkel, said he was convinced the euro would stabilise and strengthen despite the current sovereign debt crisis.

He said: "Yes, there are problems. But the economic policy of the European Central Bank and of the governments of leading European economies ... convinces me that the stability of the euro will be ensured."

He added: "We know there are problems in Portugal, Greece, Ireland and the euro is wobbling a bit. On the whole it is a solid, good currency and it should take its place, its role as a reserve currency."

Asked about Russia's role in the eurozone in the future, Mr Putin said: "Can it be supposed that one day Russia will be in some joint currency zone with Europe? Yes, quite possible."

Speaking at the same event, Josef Ackermann, chief executive of Deutsche Bank, echoed Mr Putin and said he could imagine Russia joining a common European currency.

Mr Putin said that for the past decade there has been a reliance on the dollar that needs to be rebalanced as it makes the world economy vulnerable. "We should move away from the excessive monopoly of the dollar as the only global reserve currency," he said.

But the Russian prime minister was critical of European laws intended to improve transparency in energy supply and distribution. He claimed the "Third Energy Package," aimed at liberalising the market, will hinder investment and amounts to uncivilised "robbery." Moscow claims that the measures devalue the European assets of Gazprom, the state-controlled gas giant.

Mr Putin said: "We often hear from our partners in Europe and North America: 'If you want to be members of a global family of civilised nations, you should behave in a civilised way.' What is this then? Have our colleagues forgotten the basic principles?"

Meanwhile, Russia's finance minister, Alexei Kudrin, has said the country's banks may buy stakes in the UK's "large" financial companies.

He claimed that VTB Group, Russia's second-biggest lender, is among the banks interested in acquisitions in the UK.

During Vince Cable's trade mission to Moscow, the Business Secretary said he would "welcome" Russian investors.