Russia reaches out to EU ahead of G20 summit
Reactions to Russian proposals on financial reform ahead of the G20 summit in London have generally been positive, a high-ranking Russian official told journalists after holding talks in Brussels yesterday (17 March).
Background
The G20 group of nations will discuss a global approach to financial market reform, including supervision, on 2 April in London.
Since a first G20 summit on reforming the global financial architecture was held in Washington in November last year, recessions in Europe and the United States have deepened, forcing governments to push through massive stimulus packages (EurActiv 17/11/08).
Italian Prime Minister Silvio Berlusconi announced that his country would host leaders of the G20 at the end of a G8 summit in Sardinia in July, and that the focus of talks would be new rules for the financial system.
The G8 - which brings together the United States, Japan, Germany, Britain, France, Italy, Canada and Russia - tackles global challenges ranging from the economy to the environment. An Italian government source said that over the three days, the G8 summit will also host the G5 countries of Mexico, South Africa, China, India and Brazil. Other countries to be invited to the talks are Australia, South Korea, Indonesia, Algeria, Senegal, Nigeria and Egypt.
Arkady Dvorkovich, economic advisor to Russian President Dmitry Medvedev, held talks with EU officials which he described as "positive". His comments come as Russia published a 10-page paper on 16 March outlining its proposals for the London summit.
"Our positions are very similar on most of the topics," said Dvorkovich, who was introduced as the Russian "sherpa" for the G8, currently involved in the preparation of the G20 summit on 2 April.
Speaking in English, Dvorkovich explained that EU representatives had been given time to analyse Russia's plans, as a document had been sent to them a few days beforehand. Russia is pushing for broad reform of financial institutions, with new bodies replacing or taking on the functions of existing organisations.
The main emphasis of Moscow's proposal is on replacing the unipolar economic order with a new one, based on interaction between several major centres.
But one of the most radical Russian ideas is the introduction of a supranational reserve currency, to be issued by international financial institutions. Another idea is to develop a diverse system of reserve currencies and financial centres, with a view to abandoning the post-WWII, dollar-centric system.
Dvorkovych admitted that some Russian ideas "created discussion", citing the proposal for a multiple or supranational reserve currency, but added more positively that "we need discussion".
As for Russian proposal to set up a global system of supervision for the financial sector, called SURF – Standard Universal Regulatory Framework - Dvorkovich said most of the countries agreed on the substance of the proposal. SURF, he explained, is intended to strengthen regulation of rating agencies, offshore jurisdictions and other elements of the global financial architecture.
But he insisted that Russia sees SURF as a "new regulatory framework, not just a list of separate standards and regulations". "The president of Russia will raise this issue at the London summit," Dvorkovich said.
'Russia needs no bailout'
As for Russia's economic situation in the context of the world crisis, the Russian advisor described the particular features which in his words make its case different from that of other countries.
"The structure of the Russian economy is biased toward commodity exports. Also [the country has] substantial private debt. A third feature is that Russia is still undergoing structural reform that breeds high inflation. But what is different on the positive side is that over the years, when we had better external conditions, we were able to accumulate reserves that help us to overcome current difficulties. And this is why we don't need any bailout."
However, Dvorkovich admitted that Russia needed to support its economic players – companies and banks – if they are of a "systemic nature," which is why the government had created a list of 295 companies eligible for state aid.
"But inclusion in this list does not imply that the company will be supported in any case. Each particular case will be decided separately. And we don't think we will have many cases like this," the Russian economist said.
Next Steps
- 19-20 March: EU summit in Brussels to prepare G20.
- 2 April: G20 summit in London.
- July: G8 summit in Sardinia.