EU and Russia Reportedly Agree to Ditch Greenback in Bilateral Transactions

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The decision comes a few days after Russian President Vladimir Putin slammed the US dollar as a tool of pressure while speaking at the St. Petersburg International Economic Forum (SPIEF).

Russian Finance Minister Anton Siluanov and Maros Sefcovic, vice-president of the European Commission for the Energy Union, have agreed to set up a working group that will deal with a transition to using the rouble and euro in bilateral payments, Russian media outlets reported, citing Siluanov’s spokesman, Andrei Lavrov.

Both sides have reportedly emphasised that the use of national currencies will be mutually beneficial, as it reduces certain risks for entrepreneurs in Russia and the EU.

During their meeting, Siluanov and Sefcovic are said to have discussed the issue of the participation of European businesses in the implementation of national projects in Russia, with the finance minister saying that Moscow is interested in cooperation and sees no obstacles to the involvement of foreign companies.

Siluanov has likewise briefed Sefcovic on concrete measures taken by the Russian government aimed at the improvement of the investment climate in the country and trade liberalisation.

The reported agreement comes on the heels of remarks by Russian Economy Minister Maxim Oreshkin, who told Bloomberg TV last week that the greenback was gradually losing its share in the world market.

“China, Turkey and other major partners are increasing their share in euro, as well as Europe. The dollar is gradually and inevitably losing its share in the world market. This concerns not only Russia, but the whole world as well”, he said on the side-lines of the St. Petersburg International Economic Forum (SPIEF).

At the same event, Russian President Vladimir Putin also stressed that since becoming the global reserve currency, the US dollar has turned into a “tool for the issuing country to put pressure on the rest of the world”.

Russia has already taken a set of measures to reduce its dependence on the US dollar, including dumping its US bond holdings, increasing gold reserves, and switching to transactions in national currencies that mitigate external economic and political risks for Moscow.

As for the EU, back in December 2018, the Financial Times reported that the European Commission had presented a series of steps to boost the euro as a global reserve currency and challenge the dollar in international transactions, including those in the energy sector.

The issue of currencies used for energy transactions leapt back into the spotlight amid European efforts to salvage the 2015 nuclear deal with Iran after the US unilaterally pulled out from it in May 2018.

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