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. Last Updated: 07/27/2016

Medvedev Talks Up Super Currency

APMedvedev and Merkel meeting German business leaders Tuesday in Berlin.
President Dmitry Medvedev called for a new world economic order, including the introduction of a new "super currency," on Tuesday as he prepared for a G20 summit in London, where Russia has been jockeying for a more prominent role.

Speaking at a summit of CIS finance ministers in Moscow and later at a meeting with German Chancellor Angela Merkel in Berlin, Medvedev reiterated the key points in Moscow's proposed revision of the world's financial system, including the creation of a new global currency to supplant the U.S. dollar.

"Many of our partners maintain the point of view that everything is fine in this area, that all that is needed is a slight strengthening of major worldwide currencies, including the dollar," he said in Moscow, Interfax reported. "We hold another point of view."

He called for the creation of a "new international currency system" and said the idea of the super currency that Russia had suggested was finding an audience among other countries.

"Many are now discussing a so-called super currency, a supranational currency," Medvedev said.

He repeated the proposal once again in Berlin, saying the global economy "cannot develop in the next 10 years if we do not create a new infrastructure, including new [currency] systems," Interfax reported.

Merkel agreed that a new world economic order was needed. "It is clear that decisions on the new financial architecture must be made," she said at a joint news conference with Medvedev late Tuesday, where they also discussed NATO and a gas dispute with Ukraine.

The Kremlin has persistently criticized the dollar's status as the dominant global reserve currency and has lowered its own dollar holdings in the last few years.

In a document released two weeks ago that contained suggestions for global economic reform that the Kremlin said it would pitch at the G20 summit, it called for the creation of a new reserve currency or using Special Drawing Rights, or SDRs, as a "superreserve currency accepted by the whole of the international community."

Although most political leaders, including U.S. President Barack Obama, dismissed the idea, it sparked international debate and found a powerful backer in China, which last week echoed the call for a global currency and less reliance on the dollar.

Finance Minister Alexei Kudrin said Tuesday that the Chinese yuan could become a global reserve currency in 15 years. (Story, page 7.)

Medvedev said at the CIS meeting that the notion of a superreserve currency probably would be discussed during the G20 summit but "could become relevant in the very near future."

Russia -- with nearly $400 billion in reserves, no toxic U.S. assets in its banking system and very little state debt -- is looking to elbow its way into a prominent role on the world stage through the G20 talks on Thursday.

In recent weeks, Moscow has suggested a reshuffle of the voting power balance in the IMF to give Russia greater representation, joined Britain and France in rejecting U.S. calls to pour more money into the global economy through another wave of stimulus and backed more stringent financial regulation to avoid future financial crises.

It has sought to be a standard bearer for other emerging economies, releasing a series of joint statements with the other BRIC countries -- Brazil, India and China.

The Kremlin's ambitions were dealt a humiliating blow, however, when The Financial Times published a leaked government document from G20 summit host Britain that put Russia on a low priority "B list" with countries like Mexico, Turkey and Indonesia rather than on the higher priority "A list" of Japan, Germany and the United States.

British officials did not deny the existence of the document but sought to play down its importance.

"This list in no way represents a hierarchy of our political relations with those states," a Foreign Office spokeswoman told Reuters.

In Berlin, Medvedev said Russia and Germany shared similar viewpoints on how to combat the global crisis and suggested that the two countries might offer similar proposals to the G20.

"We definitely don't have any major differences in our positions," he said.

"I won't say who we do have differences with, in order to sustain the intrigue," he said. "Let the sherpas do their work, and maybe they will come to some kind of compromise."

Turning to the gas dispute with Ukraine, Medvedev warned Kiev that it would lose access to Russian loans until the issue of gas transportation was resolved. "Our Ukrainian colleagues ask us to give money. How can we give money if we cannot agree on such a crucial issue?" he said. "You cannot divide a product that does not belong to you."

The European Union signed a cooperation agreement with Ukraine on modernizing its gas transit system last week, but the Russian government was angry that it was excluded from the talks.

Medvedev said Moscow was willing to negotiate a gas transit deal that involved Russia and said proposals would be sent soon to Ukraine and the EU.

On the eve of the G20 summit, Medvedev and Obama will meet Wednesday in London for their first talks, which are expected to include NATO expansion, U.S. plans for a missile defense shield in Europe and a new arms reduction treaty.

In Berlin, Medvedev said Russia would soon resume a "full-scale dialogue" with NATO. "At one point, our relations sagged but, thankfully, reason prevailed," he said.