Russia locked in "huge" rates feud as Shuvalov cheers easing

European Rescues

Still, that doesn’t mean Russia can afford to rescue European countries, where debt crises have threatened global growth, without first thinking about its domestic needs, Shuvalov said. The government moved 900.2 billion rubles of 2012 energy revenue to the Reserve Fund, which can be used to finance future budget deficits, the Finance Ministry said today.

“We need to be very frugal at the moment, very conservative,” Shuvalov said, adding that the government isn’t prepared to write off a 2.5 billion-euro ($3.3 billion) loan to Cyprus given in 2011.

Russia is facing calls from other Cyprus creditors to participate in a new bailout, including the possibility of forgiving some of the loan, the Welt am Sonntag newspaper reported on Jan. 19, citing unidentified German government officials. German Finance Minister Wolfgang Schaeuble told lawmakers last week that Russia must participate in a euro-area bailout.

“I don’t want to provide any money for Cyprus,” he said, adding that Russia hadn’t yet responded to a request from the island for a new loan. “We have so many friends and partners who would like to receive some loans from us.”

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