Russia's President Dmitry Medvedev advised debt-laden countries on Thursday to cut their spending immediately and called on stronger states to support demand in the eurozone, in Russia's first official statement on the European crisis.
"States whose debt burden is excessive must launch fiscal consolidation immediately," Medvedev told the Group of 20 summit in Cannes. "It would be reasonable if EU states seen by markets as safe harbors, support demand and thus ease the situation for their weaker partners."
He said that the fundamental reason for markets' distrust of financial rescue plans within the eurozone was their uncertainty about how to cut the debt burden, exceeding 80 percent of gross domestic product in most states, while economic growth only amounted to 1-2 percent.
"Proof of the fact that these states will take all steps necessary to secure sovereign borrowers' mid-term solvency is enough to reassure markets," Medvedev said.
Greece stands on the brink of a national default, after a hard-won 130 billion rescue program from the EU was endangered by Greek Prime Minister George Papandreou's plans this week to hold a referendum on the deal. Greeks, hostile to additional austerity measures tied to the bailout package, are almost certain to reject the plan, which, in turn, would trigger the country's falling out of the euro zone.
A Greek default may also trigger defaults in Spain and Italy, which also have a huge debt burden.
Medvedev said he opposed the Greek referendum, as do French President Nicolas Sarkozy and German Chancellor Angela Merkel, who told Papandreou on Wednesday night that Athens would not receive a cent more until it decides to meet its commitments to the eurozone.
"My feeling is that the actions of our partners aimed at instilling order should be more dynamic and decisive. Neither the referendum, nor any delays in making decisions will do any good," Medvedev said.
Russia is ready to support troubled EU states, he said. Earlier on Thursday he called on the BRICS states, which include Brazil, Russia, India, China and South Africa, to work out a joint position on the euro crisis.
