MOSCOW, December 14. /TASS/. Russian President Vladimir Putin warned Argentina that switching its national currency to the dollar could carry large-scale socio-economic consequences.
"There is also a socio-economic component to such a decision (to switch to using the dollar within the country - TASS). Even tying the national currency to the dollar, a hard tie, is already fraught with serious socio-economic consequences," Putin said during his annual televised Direct Line question-and-answer session with Russian citizens.
The President drew attention to the fact that "Argentina was shaken at one point due to financial problems."
"It even went so far as runs on banks," Putin said.
"Look what will happen there if they have only the dollar or a rigid tie to the dollar. After all, when solving internal problems of an economic nature, any government always thinks about how to provide social guarantees for citizens and fulfill its social obligations," said the Russian leader. He noted that, as a rule, money is always lacking for pensions, paychecks to government employees, social benefits, and so on.
"What will tying [itself] to the dollar lead to? If there is a national currency - the peso, there is such a tool - to increase inflation. Yes, that’s not very good, but still it is a tool for balancing a healthy economy with the fulfillment of social obligations. But if there is no national currency, you can't print anything. There is only one way - cutting budget spending for the public, severely cutting wages, pensions, benefits, spending on medicine, on roads, on this, on that, on internal security. There is no other way," he warned.
Putin also stressed that "in this case, a government puts itself in a tough spot in terms of internal political stability."
"If such a choice is made by our partners, it is their right. It is the country itself that determines what needs to be done and how," the President concluded.