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Washington’s anti-Russian sanctions affecting Europe — deputy PM

January 21, 2015, 16:25 UTC+3 DAVOS
They are in particular decreasing the competitiveness of European banks, Russian Deputy Prime Minister Arkady Dvorkovich said
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© EPA/Drew Angerer

DAVOS, January 21. /TASS/. The sanctions introduced by the United States against Russia are having an impact on Europe, Russian Deputy Prime Minister Arkady Dvorkovich told the Davos Economic Forum on Wednesday.

“They are in particular decreasing the competitiveness of European banks,” Dvorkovich said. He stressed that the best scenario for everyone would be lifting sanctions.

Russia can survive both sanctions and low oil prices, he said, adding that it is “more preferable that the oil prices stabilize at some level and then the currency market will not be that volatile.”

Dvorkovich said in 2015 Russia will use its accumulated reserves to support the banking system, investments in projects and fiscal stability. “We also plan to cut budget spending by 10% or 15%,” he said, stressing that “low oil prices are not a major problem.”

In an interview with Bloomberg, Dvorkovich said if the oil prices are below $50 it is very difficult to avoid some sliding down. “What we are doing now is concentrating on some things which are more important than others, like agricultural sector,” he said.

On oil prices

Dvorkovich, formerly a presidential economic aide, said some European banks believe that due to anti-Russian sanctions, they are losing competitiveness compared with US banks.

The banks in Europe know nothing about managing risks on particular projects, while the US regulations in the sphere of the banking sector’s transparency also reduces European banks’ competitiveness, he said.

Dvorkovich also said it’s too late for Europe now to start relaxing its monetary policy.

Infographics Oil prices over 30 years Oil prices over 30 years
Year-average inflation-adjusted oil price. Infographics by TASS

Dvorkovich said on Wednesday he did not rule out that oil prices could go lower in the short term, but they were likely to remain above current levels in the longer term.

The price of oil could fall to $25-30 per barrel in the short term, Dvorkovich told news agency Bloomberg on the sidelines of the World Economic Forum in Davos. In the longer term, most countries wanted higher prices, he said, adding that he believed an average oil price this year should be slightly above current levels.

The deputy prime minister said in an interview with TASS earlier that Russia would not artificially lower its oil output, and the Russian authorities did not see any huge risks in declining oil production, in case the price of oil hovers in the $50-60 range.

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