Courtesy Reuters


The immediate causes of Russia's current financial crisis are clear -- a large budget deficit and an inability to service the debt, especially short-term dollar liabilities. Equally straightforward steps to solve these problems have been widely proposed. Moscow is being asked to reduce its budget deficit by collecting more taxes and cutting spending. International financial organizations and Western countries in July pledged an emergency loan package of $17 billion to stabilize the immediate financial crisis and restructure the short-term debt. These measures, it is argued, will allow the government to get back to the business of market reform.

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