Russian Deputy Finance Minister Sergei Storchak said today that Russia’s financial troubles may force the country to suspend the issuing of new loans to other countries. Storchak added that Russia will respect its earlier obligations on loans issued to foreign borrowers. Nevertheless, his announcement comes after officials in both Russian-controlled Crimea and the Russian-supported breakaway region of Abkhazia complained of lower funding than expected from Moscow. Low world energy prices have led to several rounds of budget cuts in Russia, with more expected as oil prices reach new lows. Budget cuts are limiting Moscow’s ability to pursue its strategic goals, both in the region and further afield.
Loans are one of the key tools Russia uses to build and maintain diplomatic relationships, both in the former Soviet states and in developing countries. Moreover, Russia has used its funding capabilities to develop close ties with political parties throughout Europe, most notably issu
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