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Friday, 30 October 2015

EU Urges Russia To Swap Dollar For Euro
By Robin Newbold

Russia could emerge as a crucial factor in the success of the fledgling European single currency, the euro, at the expense of the US dollar after leaders at this week's Russia-European Union summit agreed to study ways to boost the currency's use in trade and increase its share in Russia's official reserves.

EU leaders on Thursday made an audacious bid to lure Russia away from its reliance on the greenback, calling on Moscow to start accepting euros instead of dollars for its exports, dangling the attractive carrot of a boom in investment and trade.

Russia currently receives US dollars for its European oil and gas exports, but the EU wants to switch to euros instead. A joint communique has been signed by both sides agreeing to discuss the issue in further detail.

Some economic experts believe a significant switch from dollar contracts to the euro by Russia's big energy producers, who provide EU states with 21 percent and 41 percent respectively of their oil and gas imports, could see the euro finally become a force in world trade after its protracted struggle against the greenback.

Chairman of the European Commission, Romano Prodi, strongly pushed the euro's case at this week's meeting, saying it would help bolster trade with Russia, attract new investment and balance the nation's hard currency reserves. "It is a clear sign of commitment to closer relations between the EU and Russia," Prodi said at a Kremlin news conference attended by Russian President Vladimir Putin, Javier Solana, EU foreign policy and security commissioner, and Swedish Prime Minister Goran Persson, whose country holds the rotating chairmanship of the EU.

Putin, while avoiding direct reference to the euro issue, significantly hailed Prodi's proposal to consider the concept of a common European economic sphere. The Russian president also urged the EU to lift trade barriers imposed against some Russian exports. European delegates also mentioned progress on a proposed energy deal that would encourage investments in Russia's energy sector.

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