Russia extends olive branch to Greeks

  “Well, we can imagine any situation, so if such petition is submitted to the Russian government, we will definitely consider it, but will take into account all the factors of our bilateral relationships between Russia and Greece, so that is all I can say. If it is submitted we will consider it,” Siluanov told CNBC in an exclusive interview in Moscow on Thursday.

Siluanov’s comments come two days after Greece’s new left-wing-led government distanced itself from calls to increase sanctions against Russia—indicating that Greece could be looking east to Russia for support.

On Tuesday, European Union (EU) leaders issued a statement calling for “further restrictive measures” to be considered against Russia with regards to its involvement in the ongoing conflict in eastern Ukraine.

Following the statement, a representative for Greece’s newly elected Syriza party reported that the EU’s statement was made “without our country’s consent” and expressed “dissatisfaction with the handling of this.”

On Thursday, Siluanov said that while Western-imposed sanctions against Russia thus far had been harmful, but Russia has managed to adapt.

“The sanctions that have already been imposed against Russia did have (a) negative effect on us. However, Russia companies have adjusted and the Russian balance of payments has adjusted. (The) ruble weakened and as you might see, life still goes on here and we just keep on living,” he said.

Siluanov added that Russia was also willing to consider offering extra aid to Belarus, whose economy he described as “closely related” to that of Russia. The Belarusian president warned on Thursday that his country might need to restructure its debt burden, and said that his country relied on Russia for help, according to Reuters.

In response, Siluanov told CNBC: “In the case of an emergency, we are ready to consider their request for help.”

“Together with our Belarus(ian) colleagues, we are currently looking into the situation. We are analyzing all the factors that affect the current economic situation in both countries, namely the sanctions and the oil prices fall. We are in negotiations right now,” he added.

Severe volatility in oil markets had played a substantial role in weakening the Russian economy, Siluanov said. He estimated that the combined impact of sanctions and oil price weakness on Russia’s economy amounted to around $200 billion or “maybe a little more”.

“The major influence(s) were the oil price falls. Our estimate of sanctions is roughly $40-50 billion of shortage of capital, but again the main driver of this slowdown is the oil price,” Siluanov said.

On Monday, Standard & Poor’s downgraded Russia’s credit rating to BB+, or “junk” grade, for the first time in a decade.

“Russia’s monetary-policy flexibility has become more limited and its economic growth prospects have weakened,” S&P said in a statement.

Last year, Russia’s central bank hiked its key interest rate to 17 percent from 10.5 percent in its single biggest increase since 1998. This was in a bid to stabilize the ruble and defuse the currency crisis that was threatening the economy.

Siluanov said the decision to hike rates so dramatically was “right,” but that he hoped they would be lowered again at some point.

“We hope that the interest rates will be lowered but this is a competence of the central bank—it’s totally independent and we cannot influence its decisions,” he said.

“The central bank is looking into the current situation, it’s analyzing it and I think it’ll take the decision on whether to lower the interest rate. We see that inflation is about 12 percent year-on-year—and the current interest rates do not go along with the macro-fundamentals of the Russia economy.”