Russia rules out direct EU rescue funds outside IMF

9th November 2011, Comments 0 comments

President Dmitry Medvedev's top economic adviser said on Wednesday that Russia was not prepared to invest directly in the EU rescue fund and would prefer to help the eurozone through the IMF.

"We are not yet prepared to examine possible direct participation in such mechanisms and it is more comfortable for us to work through the International Monetary Fund," Arkady Dvorkovich was quoted as saying by RIA Novosti.

The European Union agreed last month in Brussels to boost the size of its European Financial Stability Facility (EFSF) from 250 billion to one trillion euros (about $1.4 trillion).

Yet it only referred to unidentified leveraging mechanisms -- essentially a European borrowing plan from countries with extra cash reserves such as Russia and China.

Russia has been extremely hesitant to commit funding without a similar promise from other sources and Dvorkovich said the European Union needed to flesh out its rescue plan in more detail.

But Moscow has itself yet to make clear how exactly it would help the eurozone within the framework of the IMF.

Dvorkovich's comments came one day after IMF chief Christine Lagarde said after talks in Moscow with Medvedev that large emerging economies such as Russia needed more clarity from Brussels.

Lagarde said the guidelines agreed by the EU last month expand the size of the facility "are not sufficiently defined for many investors to make their determination and decide to invest."

Russian officials said during Lagarde's visit that Moscow would like to invest up $10 billion to help the eurozone -- a relatively small figure that analysts interpret as a political sign of support for Europe.

© 2011 AFP

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