Russia Finance Minister: We Are Ready To Ditch The Dollar In Favor Of The Euro

In a testament to the success of the latest Trump sanctions against Russia, overnight Russian aluminum giant Rusal announced that its chief executive, Aleksandra Buriko, and half of its managerial board resigned to make sure the firm avoids U.S. sanctions against its founder, billionaire oligarch, Oleg Deripaska. The mass resignations were part of "the efforts that have been made by the management of the group to protect the interests of the company and its shareholders” since the sanctions were imposed last month, Rusal said in a May 24 statement.

Buriko resigned after the U.S. Treasury's Office of Foreign Assets Control (OFAC) announced new punitive measures against Russia in early April in response to Russia's "malign" activities around the world. The latest round of sanctions primarily targeted Russian oligarchs close to President Vladimir Putin, especially Oleg Deripaska - who had previously been interviewed by Robert Mueller - prompting Rusal shares to tumble while the price of aluminum soared.

That said, Rusal is not out of the woods yet, and earlier today Bloomberg reported that Deripaska had asked the Russian government to buy aluminum for state reserves, in other words engage in an indirect bailout of the state's largest aluminum producer, although the Kremlin hasn't made a decision yet. Furthermore, Rusal which is facing significant debt maturities in the coming months, has applied for state support to Promsvyazbank, and a decision is pending.

The common theme here is that Trump's sanctions against Russia - with which he is supposedly colluding - not only work, but are very effective in achieving their goal. And they do so though the biggest weapon the US has: access to the world's reserve currency, because with one phone call to SWIFT, Trump can lock out an entire nation.

So what alternatives is Russia planning, aside of course from increasingly closer trade, financial and monetary ties to China, which renminbi many speculate is only a matter of time before it replaces the USD as the world's reserve currency?

Addressing precisely this issue, Russia's Finance Minister Anton Siluanov said at the St. Petersburg International Economic Forum that settlements in US currency could be dropped by Russia in favor of the euro. That said, Russia would only engage in such an unprecedented transition under one condition:  if the EU takes a stand against the latest US sanctions on Moscow.

"As we see, restrictions imposed by the American partners are of an extraterritorial nature. The possibility of switching from the US dollar to the euro in settlements depends on Europe’s stance toward Washington’s position,” said Siluanov, who is also Russia’s first deputy prime minister.

Is there even a remote possibility Europe would entertain such a dramatic shift in alliances? Well... the EU initially supported Washington’s sanctions against Moscow, but has recently criticized US President Donald Trump’s policy of imposing trade restrictions on other countries. The EU was also hit by the introduction of US import duties on steel and aluminum. The situation escalated even more after the US withdrew from the nuclear deal with Iran, a move which Europe has refused to acknowledge and has slammed the Trump administration for acting unilaterally and without coordination.

“If our European partners declare their position unequivocally, we could definitely see a way to use the European common currency for financial settlements, such as payments for goods and services, which today are often subject to restrictions,” Siluanov added, dangling the bait in front of Merkel and Macron.

Siluanov concluded that Russia is already developing settlements in national currencies with its trading partners, among which is none other than China, which means that should the Europe respond affirmatively, overnight the entire monetary balance of power in the world would shift away from the US and toward Eurasia.

We now await Europe's response.

Comments

Pandelis mtl4 Thu, 05/24/2018 - 15:45 Permalink

on the two events described above (ruskal board resignation at trump's urging and minister of finance statement on the US dollar) probably one is not necessarily related to the other ... but i could see how someone can make the case that these are connected.

In reply to by mtl4

FBaggins sabaj49 Thu, 05/24/2018 - 20:05 Permalink

It is a fiat currency but not a "worthless fiat currency" - not yet anyway.  We all know of the pressures on it.  Like everything else its value depends on the demand for it. More nations opting not to buy dollars to buy oil weakens the demand and the value. But what can you expect Russia to do? Be faithful the the US dollar and the US Fed ponzi scheme which just keeps adding zeroes to the books, while the same cabal which runs the Fed and the US are busy trying to bankrupt, destroy and take over Russia, to extend their own corrupt financial system?

It will not be the few hundred billion a year in demand for petrodollars lost with Russia taking the Euro or the Yuan for its resources instead, but the growing China market, and other nations losing more and more trust in the imperious US which cannot be relied upon to keep any deal and enforces its will with the treat of military destruction.  When the dollar starts to tumble my view from my own amateur and modest position is that it will go fast because most of the major foreign bond holders and also many well-to-do Western citizens will trade for other currencies for more security.

Despite any further false flags, starting a war with Iran or Russia will now only be seen as a desperate effort of the US to secure more oil resources or to save the petrodollar. The extremes utilized by the US in the Middle East and against Russia speaks volumes as to its desperation. It is no longer a nation of which exudes or invites any real confidence. Its desperate, illegal, protection-racket-like schemes to secure its dominance together with its internal decadence no longer engenders trustworthiness. It has become morally weak and and its spirit is broken, despite all the money spent to put Humpty back together again with military spending. 

In reply to by sabaj49

lasvegaspersona ZENDOG Thu, 05/24/2018 - 19:09 Permalink

Trump's only hope of MAGA is to ditch the burden of reserve currency status...unsure?...read Triffin...

There are 2 sides to this in every single country, those who benefit and those who pay. In the US bankers gain by selling US paper, exporting companies and their workers suffer. Abroad the governments who remain popular due to high employment in exporting sectors are pro dollar reserve status, even if it means increased US power and weakened local currency. China wants the dollar to remain 'strong' so it can have better employment numbers. Others in China see the insanity of buying the shitty debt of a major competitor. If you can see this across countries and interested parties you'll see why there is so much inertia.

Many in the US Congress fear Trump will win and their benefactors will suffer. Others in Congress see the benefit of pulling the plug and having a slow painful switch to free floating currencies.

In reply to by ZENDOG

Pandelis Pandelis Thu, 05/24/2018 - 15:54 Permalink

would EU dump trump?  hard to guess .... UK's special relationship seems gone ... trump has not even talked about it.

 

junker and polish guy are against trump that is for sure ... at the end, i guess it will depend on deutch bank ... how hard they need this support from russia .. if so, deutch bank can put the screws on merkel to make it happen

In reply to by Pandelis

RationalLuddite TheReplacement Thu, 05/24/2018 - 18:42 Permalink

Agreed. They game play here is so beautiful to watch. While it is calibrated and improvised to an extent, based upon US-Israel moves, on the same game board Putin and Xi are playing chess while Europe plays checkers, the US apparently thinks it's tick-tac-toe, with a mallet ... Israel  is too exceptional to play such games. Ironically they decided to play ... Russian roulette. Don't underestimate Putin's understanding of how to play this, of how to exercise power rather than just reactionary brute strength.

In reply to by TheReplacement

Faeriedust RationalLuddite Sat, 05/26/2018 - 10:34 Permalink

Right.  Putin is a competent autocrat.  Generally speaking, the difficulty with autocracy, which is the single most effective and efficient form of government, lie in the inevitable succession crises -- there is no way to assure or select a competent autocrat except to allow them to fight it out.  Putin is young, healthy, and should be able to remain in charge for at least 20 more years; ditto Xi.  Xi also has a succession mechanism that will toss up a legitimized successor at the appropriate time.  So these countries are going to move ahead while the world's democracies diddle with themselves.

In reply to by RationalLuddite

Xredsx GlassHouse101 Thu, 05/24/2018 - 16:25 Permalink

You don't need a large number of the population to rebel against their oppressors to create a revolution. Just a few clever and righteous leaders who are committed to the course. 

Nigel Farage and Donald Trump just simply exposed and brought down the corrupted just by getting the media to talk about the things they didn't want us to talk about. People such as these two, took a hell of abuse from the media, all for the greater good.

In reply to by GlassHouse101

Faeriedust Xredsx Sat, 05/26/2018 - 10:38 Permalink

She's in the same position that Tsipras and Varoufakis were in with Greece.  She/British Tories thought that they could have their cake and eat it too; that they could negotiate with the EU on the basis of least mutual harm.  But the Eurocrats' main motivation is to remain in power, all the power they can grasp.  They're not letting anyone go without punishing them.  They have to make examples to scare the other captives into obedience.

In reply to by Xredsx

Xredsx TheReplacement Thu, 05/24/2018 - 16:33 Permalink

Yeah but we cannot get on the path that leads us to the lawless one until all tax free foundations are under investigation. We need their transaction records. 

And just think, almost all minority movements were founded and are still currently being funded by a handful of large connected tax free foundations. Which means that the great divide of humanity was designed and engineered with intent.

Fascinating.

In reply to by TheReplacement