Moscow Mayor Yuri Luzhkov has caustically criticized the financial policy of the federal government, noting that such policy has further compromised the real economic sectors at the background of the current global financial meltdown. “Such government’s policy on high refinancing rates will eventually prompt mass corporate bankruptcies in the economy.”
Comparing the refinancing rates in the United States (0-0.5%) and Japan (0.1%) with Russia’s record of 13-20%, the mayor said such rates doom corporations to failures. “Our companies’ performances are worsening daily because of expensive credits. Today, these companies are operating on their fund reserves, which are now fast depleting. This calls for external sources of financing, which are almost impossible to get because of banks’ exorbitant rates.”
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