Could a Russian default lead to a European default?
Russia's inability to repay foreign debts could lead to hyperinflation in Europe and cause Europe to default on its debt, Russian Security Council Deputy Chairman Dmitry Medvedev said on April 17.
Commenting on European Commission President Ursula von der Leyen's statement that Russia's default is only a matter of time, Medvedev said: "Let's see it happen."
"A Russian default could lead to a European default," commented the Deputy Chairman of the Russian Security Council, while also assessing that the European Union's (EU) financial system is not very stable and many people are losing faith in it.
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| Illustration photo: Reuters |
"In that case, Brussels would have to change its tone," Medvedev said.
In an interview with Bild am Sonntag, von der Leyen stated that Western sanctions are shaking the Russian economy, with hundreds of large companies and thousands of professionals leaving Russia, and that the country's GDP is projected to fall by 11%, making Russia's default only a matter of time.
Russian Finance Minister Anton Siluanov previously stated that Russia would only repay its foreign currency debts once its cash assets were unfrozen. In the event of refusal or a lack of response from correspondent banks, Russia would repay and pay interest on its foreign debt in rubles.
However, in this case, it would represent a significant shift in how Russia pays interest on its bond debts, and this could be considered a form of default.
Russian authorities have repeatedly emphasized that there is no realistic basis for Russia to default on its debt and that such a situation could only be fabricated.
