Second wave of economic crisis on the way

The heads of Russian financial departments said that the international economic situation will most likely worsen at the end of the current year. Another crisis in the global economy may lead to negative consequences for the Russian economy. The current risks are first and foremost connected with the ongoing crisis in the European Union. Russia already prepares to lend money to its primary offshore - Cyprus.

Russia's Finance Minister Aleksei Kudrin said at a press conference in St. Petersburg that the low speed of the economic development in the United States and the refusal to support one of the EU countries increased the risks for another stage of the global economic crisis. Kudrin is certain that the EU does not provide enough assistance to Greece.

Cyprus has asked for a loan of 2-2.5 billion euros with 4.5% per annum for up to five years, Reuters said. The credit rating of Cyprus was downgraded in the summer, which complicated the attraction of foreign funds. Cyprus largely depends on Greece, the economic situation of which leaves much to be desired.  The European Commission denied Cyprus a loan in August.

Cyprus has been looking for a source of long-term funding which would give the country an opportunity to breathe easily, Finance Minister Kikis Kazamias said. Cyprus banks have many clients among Russian companies, so it is extremely important for Russia to support the bank system of the island.

The IMF has provided a 3.98-billion-euro loan to Portugal, the BBC reports. The IMF made the decision after investigating Portugal's credit terms and their correspondence to reality.

The IMF's assistance to Portugal may reach 10.43 billion euros. The entire three-year program is evaluated at 27.27 billion euros. This program is a part of the funding package, within the scope of which the EU and the IMF are ready to provide 78 billion euros to Lisbon in three years.

As for the second wave of the crisis, Christine Lagard, the managing director of the IMF, said that the risks of recession had been growing and getting more dangerous than the threat of inflation. According to her, the governments must act decisively and immediately to take their economies through the new, albeit dangerous stage of recovery.

Russia's budget and bank system also gets prepared for a second wave. Aleksei Kudrin announced a reduction of the prognosis of internal borrowings of the Finance Ministry from 1.7 to 1.4 trillion rubles. The government has also decided to cut the plan of privatization, as well as the anticipated budget deficit for 2012-2014, The Kommersant wrote.

The Central Bank is expecting a reduction of liquidity in the banking system of the Russian Federation in September-October of this year. In 2012-2014, experts also predict the global growth of credit rates. The Central Bank is prepared to increase the volume of refinancing of Russian banks; it may reach 1.5-2 trillion rubles by 2015.

Vladimir Shabanov.

Subscribe to Pravda.Ru Telegram channel, Facebook, RSS!

Author`s name Dmitry Sudakov