2015-07-13 19:30:00
US DEBT: THE GREATEST
Russian President Vladimir Putin warned of dangers to the global economy from U.S. borrowing while saying Greece isn't solely to blame for its debt crisis.
"It's a serious problem not just for the United States but for the whole world economy," Putin told reporters Friday in the Russian city of Ufa in response to a question on the prospects of the biggest developing nations. "Debt exceeds gross domestic product there."
Putin said he's concerned about Greece and hopes its crisis will be resolved soon, reiterating that Prime Minister Alexis Tsipras hasn't asked him for financial aid. Even so, he said Russia has the resources to help its partners.
Putin is battling his own economic woes after sanctions over Ukraine and a drop in oil prices triggered Russia's first recession in six years. This isn't the first time the Russian leader has attacked U.S. economic policy: he's previously derided the "dollar monopoly" that allows the U.S. to act like a "parasite" on the global economy.
The ruble is the second-worst performer against the dollar in the past year among more than 150 global currencies tracked by Bloomberg, with a 40 percent dive. Russia's central bank resumed purchases of foreign-currency assets in May, planning purchases of $100 million to $200 million a day to replenish reserves.
The U.S. ratio of government debt to GDP will fall to 104 percent in 2018 from 105 percent in 2014, the International Monetary Fund predicts.
'Big' Numbers
Russia drained its foreign-currency stockpiles as fighting raged in Ukraine and global energy prices plunged. That hasn't left the government in a position where it can't assist its allies, according to Putin. Russian reserves were $359.6 billion as of July 3.
"Russia, of course, is able to offer help to its partners regardless of today's difficulties with the economy," he said after a meeting of the Shanghai Cooperation Organization. "We're helping some countries."
Putin said Russia and Greece, both of which are majority Orthodox Christian, have a special relationship. Being a euro member, the government in Athens is unable to take measures such as devaluation to help revive its economy, according to Putin.
"Greece is a European Union country and within its obligations is conducting rather difficult negotiations with its partners," he said. "Mr. Tsipras hasn't approached us regarding aid. And that's generally understandable because the numbers are big and we know what's at stake."
bloomberg.com
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