Russia and the EU Are Ready to Switch to Settlements in Euros — Anatoly Bazhan

If the plan to adopt national currency settlements between Russia and the EU succeeds, the dollar space in global trade will undoubtedly be curtailed even more. The question is how strong the impact will be. We believe the reduction is going to be noticeable, although not considerable. Currently, the Russian-EU trade accounts for about 2 percent of global trade. Given that the US dollar is used in about half of transactions, removing it from the Russian-EU relations would diminish the importance of the US dollar by not more than 1 percent. However, since the dollar just cannot be ousted completely, its practical decrease in our estimate will most probably make up about 0.7 percent. The dollar component in the international currency reserves will correspondingly become slightly lower. The United States will certainly take a negative stance on such developments and not only because they are to weaken the effect of possible accounts freezing but also because they will lead to the further slide of the dollar to the category of ordinary currencies and to the future loss of advantages that secure the US dollar dominance in the world economy.

Valdai Analytics Russia and the EU Are Ready to Switch to Settlements in Euros