Could Russia's debt default cause Europe to default too?
Russia's failure to pay foreign debts could lead to hyperinflation in Europe and cause Europe itself to default on its debts, Deputy Chairman of Russia's Security Council Dmitry Medvedev said on April 17.
Commenting on European Commission President Ursula von der Leyen's statement that Russia's default was only a matter of time, Medvedev said: "Let's try to make it happen."
"Russia's default could cause Europe to default," the Deputy Chairman of the Russian Security Council commented, while assessing that the European Union (EU) financial system is not very stable and many people are gradually losing faith in it.
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| Illustration photo: Reuters |
“In that case, Brussels will have to change its tone,” Mr Medvedev said.
In an interview with Bild am Sonntag, Ms. von der Leyen said that Western sanctions are shaking the Russian economy with hundreds of large companies and thousands of experts leaving Russia, and that the country's GDP is forecast to fall by 11% and that Russia's bankruptcy is only a matter of time.
Russian Finance Minister Anton Siluanov said earlier that Russia would repay its foreign currency debts only if its cash assets were unfrozen. In case of refusal or no response from correspondent banks, Russia would return and pay interest on foreign debts in rubles.
However, in this case, it would be a significant change in the interest payments on Russia's debt under the bonds and this could be considered a type of default.
Russian authorities have repeatedly stressed that there is no real basis for Russia's default and that the situation could only be created by staging./.
