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updated 1:38 AM UTC, Sep 21, 2022

Medvedev Warns That Russia’s Default May Entail Europe’s Default

MOSCOW, April 17. /TASS/. Russia’s foreign payments default may entail hyperinflation in Europe and its own default, Deputy Chairman of the Russian Security Council Dmitry Medvedev said on Sunday.

Commenting on European Commission President Ursula von der Leyen’s words that Russia’s default is a matter of time, he noted, “Well, please try” and pointed to “two obvious things.”

“Russia’s default may entail Europe’s default, both moral and, quite possibly, tangible,” he wrote on his Telegram channel, as, in his words, the European Union’s financial system is not very stable and people are losing confidence.

Moreover, the European Union’s authorities should expect “a strong gratitude from rank and file Europeans for the hyperinflation that cannot be blamed on vile Russians, for the lack of elementary foods in shops and for the influx of refugees, which will provoke a wave of force crimes,” he wrote. “In this case, the people in Brussels will have to change their rhetoric. Otherwise, stinky fires of tyres will be burning in the streets of European cities in the glory of Maidan heroes.”

As for von der Leyen’s statements, they “are not about the sufferings of emaciated people, not about the end of the special military operation, not about the long-hoped for peace in Ukraine, but about Russia’s foreign payments default,” he noted.

“That’s what they have been dreaming of! This is the European Union’s core strategy. This is what the masochists from Brussels and their overseas playmates really want,” he added.

In an interview with Bild am Sonntag, von der Leyen said that the Western sanctions are shaking Russia’s economy, with hundreds of large companies and thousands of experts leaving Russia and its GDP expected to drop by 11% Russia’s default, in her words, is a matter of time.

According to the Russian finance ministry, Russia’s foreign debt was $59.5 bln as of February 1, 2022, including $38.97 bln in foreign bonded loans. Currently, Russia has 15 bonded loans with a maturity period from 2002 to 2047.

Russian Finance Minister Anton Siluanov said earlier that Russian will repay its debts in foreign currencies only when its currency assets are unblocked. In case of refusal or the lack on response from agent banks, Russia will repay and service its foreign liabilities in rubles.

In this case, however, its will be a meaningful change in the terms of servicing Russia’s debt under bonded loans, which, most likely, will be interpreted as a default.

Russia’s authorities have repeatedly stressed that there are no actual grounds for Russia’s default and such situation could be created only artificially.

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