Putin Says Euro Area May Shrink After Brexit Sets a Precedent

Putin Hopes for Euro's Survival, Welcomes U.K. Relations
  • ‘Not in our interest for euro zone to collapse,’ Putin says
  • U.K.’s special relationship with U.S. hurts ties with Russia

Russian President Vladimir Putin said the euro area could someday shrink in size if its stronger members sought to close ranks.

"I don’t rule out that there could be some decisions made that would consolidate a group of countries with equal levels of development and, thereby, in my opinion, strengthening the euro," Putin said in an interview in Vladivostok, on Russia’s Pacific coast.

Putin pointed to Russia keeping 40 percent of its currency reserves in euros as evidence that it wasn’t in his country’s interest for the 19-member bloc to "collapse." He praised the leading economies for a “very pragmatic approach” to solving the bloc’s problems.

A smaller euro zone focused on more economically robust and like-minded members would strengthen the currency, thereby bolstering the value of Russian reserves. The 17-year-old currency took a beating during the prolonged Greek crisis when the bloc’s weakest link came close to crashing out of the euro before a last-minute bailout agreement.

In the end, it was the U.K. that gave markets a jolt by voting to bow out of the 28-member European Union. Putin is set to meet for the first time at Group of 20 talks in China the new face of the British government, Theresa May. Her predecessor David Cameron, invoked Putin in the failed campaign to keep Britain in the EU.

For a refresher on why the U.K. is leaving the European Union, click here.

Putin said ties between the two countries haven’t been "the best lately" and will only improve if May rethinks her country’s closeness to the U.S. and conducts a “more independent foreign policy.”

“The U.K.’s relations with Russia depend not on its presence or absence from the EU, but on its special relationship with the U.S.,” Putin said in the interview on Thursday. “If the British side thinks that there’s a need for a dialogue in some areas, then we’re ready, we aren’t going to pout.”

Sign up to receive the Brexit Bulletin, a daily briefing on the biggest news related to Britain's departure from the EU.

Watch this next: Putin Talks Trade With China Ahead of G-20 Summit

Putin Talks Trade With China Ahead of G-20 Summit
Before it's here, it's on the Bloomberg Terminal. LEARN MORE