Monday, October 27, 2008

Russia Not Safe from Financial Meltdown

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Russia will take a double hit from the global financial crisis because it is not isolated from the world and lacks domestic economic stability, a senior U.S. diplomat said.

Russia is seeing "the worst of both worlds," David Merkel, deputy assistant secretary of state for Russia, said in an interview Friday.

Reiterating the harsh rhetoric that the U.S. administration has adopted since Russia invaded Georgia in August, Merkel blamed the Russian government for the domestic stock market's disastrous performance and a jump in capital flight in the early days of the crisis.

Among the government's mistakes, he said, was the "talking down of certain companies." In July, Prime Minister Vladimir Putin attacked mining company Mechel, causing its shares to drop.

"There was already a downturn when the global downturn began," Merkel said.

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