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Dominant figures on the right and left in Berlin have voiced different views on how the EU should handle Russia’s rouble crisis.
Wolfgang Schaeuble, the finance minister from the centreright CDU party in the grand coalition, showed little sympathy in an interview with the Rheinische Post daily on Christmas Eve.
“Of course, we are concerned about the developments in Russia … But that doesn’t mean we accept that Russia can impose its interests by military means. The annexation of Crimea and Russia’s permanent violation of the ceasefire in Ukraine cannot remain without consequences. I hope every day that Russia will return to co-operation with the West, but until then we are sticking to the sanctions”, Schaeuble said.
But the centre-left SPD’s foreign minister, Frank-Walter Steinmeier, speaking in Der Spiegel one day earlier, said a Russian economic collapse is dangerous. Steinmeier noted the current situation “can’t allow us to go straight back to business as usual”.
But he added: “I’m worried. This is why I oppose any further tightening of the sanctions. Anyone who wants to bring the Russian economy to its knees is completely mistaken if they think that this will bring about greater security in Europe”.
Steinmeier said the EU and NATO should hold more talks with Russia to alleviate its trade concerns and to avoid an accidental military confrontation. He also ruled out the idea of Ukraine joining NATO in the foreseeable future.
Meanwhile, Standard & Poor’s warned on Christmas Day it might downgrade Russian bonds to “junk” in January.
Dmitry Polevoy, the ING Bank’s chief economist on Russia, told Reuters that “near-term prospects for the rouble remain highly uncertain”. The currency crisis has seen the price of basic commodities, such as bread, rise steeply.
The main cause is a slump in oil prices. But EU sanctions on Russian banks and energy firms are making matters worse by stopping the blacklisted firms from buying debt on international markets. Three listed banks - Sberbank, Vnesheconombank, and VTB - have challenged the measures in the EU court in Luxembourg on technical grounds.