Russia is prepared to use the euro instead of the dollar for international trade if the European Union takes a position against new US sanctions on Russia, according to the Russian Minister of Finance Anton Siluanov. He made these remarks during the annual St. Petersburg International Economic Forum (SPIEF) which were held in May.
“As we see, restrictions imposed by the US partners are of an extraterritorial nature… If our European partners declare their unequivocal position [against the expansion of sanctions], we certainly see a way out in using the European currency, the European infrastructure organizations for financial settlements, for payments for goods, services, which often fall under various kinds of restrictions.”
The minister said that Russia is not only prepared to trade using the euro as a means of payment, but that Russia is also promoting the use of its own currency in international trade. For example, in recent years the country has developed its own version of the international SWIFT payment system, which was being promoted by the governor of the Russian central bank during the St. Petersburg Economic Forum..
Euro as a world trade currency
In 2010, the Russian President Putin already indicated that he is willing to cooperate with Europe in the monetary sphere. Two years later, Medvedev said in an interview that Russia welcomes the euro as an alternative world currency next to the dollar. Due to the developments in Ukraine and the subsequent Western sanctions, the talks on this topic remained silent for some time, but very recently Putin once again expressed his dissatisfaction with the dollar monopoly.
In the past Russia has repeatedly expressed it’s intention to cooperate with Europe to reduce their dependency on the dollar. With the latest developments concerning the unilateral breakup of the Iran deal by the United States and the arrival of new sanctions on Iran, it becomes clear that too much dependence on the dollar system also entails a political risk.