Ministry of Finance of the Russian Federation
Ministry of Finance of the Russian Federation
15.10.2011

Statements of Deputy Finance Minister of the Russian Federation S.Storchak at G20 Finance and Central Bank Deputies' Meeting&G20 Finance Ministers and Central Bank Governors' Meeting

 

DJ Russia's Storchak: Hesitant To Offer Bilateral Help To Nations

17 October 2011

PARIS (DOW JONES)--Russia is in no rush to buy Spanish debt and is hesitant to offer bilateral help to individual countries, Deputy Finance Minister Sergei Storchak said Friday.

"We are ready to help other economies that need our resources," Storchak said. But this should be done through the International Monetary Fund and other institutions, rather than bilateral agreements, he added.

"Larger European countries cannot be supported solely through the framework of bilateral agreements," he said. "If we, like the other BRICS, are going to offer aid, we need to now what sums are being talking about, how big a loss is being covered and under what conditions."

Storchak said there was "no rush to take any measures on Spain" and that nervousness regarding the country is premature.

Earlier this week, an economic aide to President Dmitry Medvedev said the Russia could help Spain and other European countries with its debt crisis, if asked.

Storchak, however, said that group action was the best path for helping troubled nations.

"We live in the real world and know that individual decisions will not be enough to save any single country from the quicksand of crisis," he said.

 

Volatility on Russian market prompted by Eurozone debt problems - Deputy Finance Minister Storchak

PARIS. Oct 14 (Interfax) - There are no fundamental factors making the Russian economy volatile at the present time, Russian Deputy Finance Minister Sergei Storchak said.

This volatility is prompted by external factors, in particular, the debt problems of some Eurozone countries, Storchak said.

"Our markets are experiencing strong pressure from instability on European financial markets," he said.

Russia has seen zero inflation in the past several months, but, at the same time, Russian assets have been highly volatile in this period, while it is more logical when assets' prices change under the influence of inflation expectations, Storchak said.


 

 

Macroeconomics key topic of G20 finance ministers meeting in Paris - Storchak

PARIS. Oct 14 (Interfax0 - The key topic of the meeting of the G20 finance ministers and central bank governors in Paris is macroeconomics and the situation on financial markets, Russian Deputy Finance Minister Sergei Storchak said.

"The first topic [for discussion of the financial G20] is macroeconomics and the situation on financial markets. The number one topic is key," he said, adding that the Paris meeting agenda includes 25 issues divided into five groups.

The second topic to be discussed by the financial G20 is the reform of the international currency and financial system, Storchak said.

Financial market regulation will also be discussed, the deputy minister said. Russia backs all the initiatives related to the regulation of financial markets, he said.

"First of all, this is stronger oversight of systemically important financial institutions," he said. This topic will be divided into two stages: regulation of global systemically important financial institutions and regional ones, he said.

While global regulation does not concern Russia because none of its financial institutions is on the "global" list, the second, regional stage will see our country being actively involved, Storchak added.

"The task will be for the Bank of Russia to identify systemically important financial institutions and to apply to them additional measures of financial control and additional measures to ensure capital adequacy [creating a capital buffer]," he said.

Russia also supports efforts related to the beginning of attempts to regulate the shadow banking sector. "We believe that here the G20 is working for anticipation," the Russian deputy finance minister said, adding that for now this problem concerns two or three countries with developed markets.

Another topic to be discussed by the G20 finance ministers and central bank governors is the volatility of commodity and energy prices, Storchak said. They will also discuss the traditional G20 and G8 topic of international development aid.

 

Russia calls for comprehensive support to Europe - Storchak

PARIS. Oct 14 (Interfax) - Russia is calling for consolidation of efforts to support big European countries and is against bilateral support, Russian Deputy Finance Minister Sergei Storchak told journalists.

"We would like to rule out the raising of the issue as part of a bilateral process because the purchase by Russia of Spanish bonds is a drop in the ocean," he said

Russia understands that individual solutions as part of efforts to support a particular country cannot solve Europe's debt problem, Storchak said.

"We cannot take huge volumes and put them on our assets portfolio. We live in a real world and understand that an individual solution will never pull such a big country [Spain] from the bog of crisis," he said, adding that this is the case for any other big country.

"This concerns any big country, which is why we are saying that we favor the mechanism of collective efforts," he said.

 

Russia favors collective support for European countries, objects to bilateral support - deputy finance minister

 PARIS. Oct 15 (Interfax) - Russia favors consolidation of efforts in support for major European countries and is against bilateral support, Russian Deputy Finance Minister Sergei Storchak told journalists.

"We would like to rule out the possibility that the issue is brought up this way within the framework of a bilateral process, because the purchase of Spain's bonds by Russia is like a buckshot to an elephant," Storchak said.

Russia understands that individual decisions toward supporting this or that particular country cannot solve the debt problem in Europe, he said.

"We live in a real world and understand that an individual decision can never pull such a big country [Spain] out of the crisis bog," Storchak said, adding that this concerns any big country.

"This concerns any big country, and therefore we are saying that we favor a mechanism of collective efforts," he said.

The debt situation in Spain is not critical to provide that country with urgent aid, Storchak said. "Spain's debt coefficients are in order. There is no need for some urgent measures here," he said.

Russia understands that its economy is dependent on events in the global economy, Storchak said. "From the viewpoint of a common ideology, we perfectly understand that we are all in the same boat, and our memory is OK," he said.

The Russian Central Bank spent huge resources to back the ruble exchange rate in 2008-2009, Storchak said. Assistance given to problematic regions in time would cost significantly less and would help avoid the replay of such a scenario, he said.

"There is absolutely no charity on our part here. We just assume that it is in our best interest to resolve the European debt problems in a civilized, wise, and professional way," he said.

Russia has said repeatedly that it was willing to join programs in support for economies needing financial resources, Storchak said. "We are against bilateral support, and we are against anyone acting separately from others as regards big countries," he said.

Russia did provide financial support to Cyprus, but this is not a big country, and there was no necessity for collective support, Storchak said. "Larger European countries cannot be supported purely through bilateral agreements," he said.

Russia is waiting for decisions that would make it clear whether the Europeans will be solving their problems themselves or whether they need support from the outside, he added.

"In order for us and the other BRIC [Brazil, Russia, India, China] countries to take active part [in assisting the Eurozone countries], we should understand what sums are in question, what financial gap this would cover, who participates and on what terms and conditions," he said.

Storchak believes there is no debt crisis in Europe so far. "I would like to stress that I don't see a debt crisis in Europe. A debt crisis is when a country stops servicing its debt," he said.

 

EFSF Not Sufficiently Funded --Russian Dep Fin Min

 14 October 2011

PARIS--Russian Deputy Finance Minister Sergei Storchak said Friday that the euro zone's bailout fund wasn't sufficiently funded, but before emerging economies could help they needed to better understand the European crisis and response.

Asked if the EFSF had enough funds to handle the crisis, Storchak said: "I don't think so."

Asked if Russia and other so-called BRIC countries were prepared to buy European bonds or otherwise contribute financially to stabilizing the euro zone, Storchak said: "First we have to understand the problem. We don't really understand yet."

Storchak also said that he didn't expect the meeting of G-20 finance ministers and central bank governors to produce tangible results to deal with Europe's debt crisis.

"There won't be that much in the final statement," he said. "My hope is that prepare a good meeting for the leaders [in Cannes next month]."

 

 

Russia backs IMF recapitalization only after implementation of decisions made earlier - deputy finance minister

 PARIS. Oct 15 (Interfax) - Russia supports extra capitalization of the International Monetary Fund (IMF) only after the implementation of the decisions that have already been made, Russian Deputy Finance Minister Sergei Storchak taking part in a G20 meeting of finance ministers and heads of central banks in Paris told journalists.

"It is Russia's position that we should complete the implementation of the decisions that were made in Toronto and Seoul," Storchak said.

In particular, the decisions on the New Arrangements to Borrow facility and the redistribution of quotas and votes within the IMF should be completed, he said.

Andrei Bokarev, the director of the Finance Ministry's international financial relations department, said only 15% of the IMF members have made decisions toward redistribution of quotas, while 85% of votes are needed for these decisions to take effect.

"The necessary number of votes for the decisions to take effect has not been achieved in the IMF on the whole, and some countries have not carried out the domestic procedures," Storchak said.

On the other hand, the IMF has bilateral loan facilities, Storchak said. "Another aspect of our position is that we are willing to work within the framework of the IMF bilateral loan mechanism, that is, bilateral agreements within the framework of a multilateral mechanism of preconditions under which the fund could finance countries that need this," he said.

 

EFSF does not have sufficient funds -Russia

 PARIS, Oct 14 (Reuters) - Russian Deputy Finance Minister Sergei Storchak said on Friday that the euro zone's EFSF financial rescue fund did not have sufficient resources.

Asked on the sidelines of an OECD conference in Paris if the European Financial Stability Facility had enough funds, he said: "I don't think so."

Storchak said resolving the euro zone's debt crisis was the most urgent issue to be discussed during Group of 20 finance chief talks on Friday and Saturday.

 

Russia Expects No Breakthroughs At Paris G-20 Meetings

 14 October 2011

PARIS (DOW JONES)--Russia expects no major headway to be made during the weekend's Group of 20 meetings here, intended to stave off a debt crisis in Europe, the country's deputy finance minister said Friday.

"The main goal is to get ready for the Cannes summit next month," Sergei Storchak said, adding that he would not expect any "breakthrough decisions" to be achieved from the current talks.

The leaders of the G-20's most influential economies plan to meet in Cannes on Nov. 3 and 4.

Current talks are expected to focus on a possible boost to the International Monetary Fund's lending capacity to help the euro zone and tackle its deepening debt crisis.

Storchak said Russia supported "all initiatives to regulate financial markets."

Officials have stressed that talks are at a very early stage and cautioned that there is no consensus among the G-20 on the need for raising the IMF's lending capacity.