Russia, ‘Fan’ of Euro Currency, Warns Against Membership Changes

Bloomberg:  Russian President Dmitry Medvedev said Europe may cause “irreparable damage” if it reduces the number of countries in the currency zone.

“If the number of euro zone countries is reduced, it does not mean it will make the euro a more stable currency,” Medvedev told chief executive officers yesterday at a summit as part of the Asia-Pacific Economic Cooperation forum in Honolulu. “We are fans of the euro and of the euro economy,” he said.

Europe’s sovereign-debt crisis and its consequences for the global economy were among topics discussed at the APEC summit. Delegates also debated on the future of the euro as a reserve currency. U.S. President Barack Obama said it’s important that Europe stand behind individual members of the euro zone to resolve the economic turmoil.

European leaders agreed last month to leverage their 440 billion-euro ($605 billion) rescue fund to give it more than 1 trillion euros as they work to prevent the spread of the two- year old crisis from engulfing Italy and Spain. Russia is seeking an increase in the weight of developing nations in the International Monetary Fund after the IMF pledged to assist the euro region.

Russia is watching the fate of the euro as almost half of its currency reserves are in euros, Medvedev said.

Medvedev’s aide on economy policy Arkady Dvorkovich said that prospects for recovery are slim. Commenting on Medvedev’s meeting with business leaders of APEC, Dvorkovich said the president agreed with the view that the situation in Europe will worsen in the short term.