Russia unveiled economic strategies to deal with the fallout from sanctions, the falling ruble and oil prices and Standard & Poors downgrading its debt. Prime Minister Dmitry Medvedev signed on the plan which included 60 measures that included investment in the economy, refinancing debt and ‘stimulus’ measures. The total budget was for 2.34 trillion rubles or $35 billion.
One item is the establishment of a so-called bad bank in which to consolidate non-performing loans into one place to free up and stimulate lending in “good banks, ” which will receive stimulus from the government to start up lending. The “bad bank” strategy was employed in the U.S., but CNBC wondered if it might be too late for Russia to attempt this. In addition, the U.S. banks were in better shape than their Russian counterparts. A part of the recovery plan was to sell off Russian debt to finance banks, but the question is, with all the global uncertainty, are there buyers for Russian debt? Banks and investors are reducing their stakes in Russia, something which is not helping the economy.
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Business Insider speculated that the total recovery plan for Russia might cost more than $35 billion, because of the 60 items, only 22 were itemized with allocations of money. Finance Minister Anton Siluanov said extra money was not a concern, because there will be cutbacks elsewhere.
