Luxembourg’s Jean-Claude Juncker, who heads the group of euro-area finance ministers, said he’s baffled by the “stress test” placed on the region amid its continuing fiscal crisis.
“We do think from time to time that we are submitted to a stress test by those who don’t want the European Union to appear like a leading monetary power in the world,” Juncker said in an interview with English-language Russian state broadcaster RT television. “We don’t understand what is happening.”
Juncker said the euro area has better economic fundamentals that the U.S., Japan and the U.K. The single currency is more stable than the dollar and the yen “as far as the exchange rate is concerned,” he told RT, according to excerpts distributed by e-mail today.
The euro-area economy, dragged down by a debt crisis now in its third year, will slip into a recession with a 0.2 percent contraction in the third quarter, according to the median estimate of 21 economists in a Bloomberg News survey. The euro has lost 4.2 percent against the dollar in the last 12 months.
Juncker meets with Russian President Vladimir Putin in Moscow today before traveling to Tambov, about 480 kilometers (298 miles) southeast of the capital, tomorrow and Tatarstan, home of oil producer OAO Tatneft, on Sept. 27.
The EU, and especially the euro area, needs to maintain its strategic partnership with Russia, and Russia would suffer if the euro were to tumble, Juncker said in the interview.
Russia won’t reduce the euro’s share in its reserves from about 40 percent, Putin said on July 23. “We aren’t changing anything,” he said. “We believe in the fundamental abilities of the European economy.”
Juncker’s visit comes as the EU conducts an antitrust probe into OAO Gazprom’s long-term gas supply contracts in central and eastern Europe. Putin earlier this month signed a decree giving the government the right to protect its natural gas-export monopoly from the investigation.