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Russia’s crisis hurts middle classes

Monday, December 22, 2014 - 02:11

The Russia rouble opened broadly former on Monday but its collapse is forcing many middle-class families to reassess their life plans. As Sonia Legg reports those with foreign currency-denominated mortgages are particularly exposed.

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Russia's economic problems are becoming quite a battle. President Putin is fighting to maintain public support and ordinary Russians are fighting to make ends meet. Those with mortgages in a foreign-currency like Alexei Krasnov are finding it particularly hard. His repayments have more than doubled and now his job is a worry. (SOUNDBITE) (Russian) FATHER OF TWO, ALEXEI KRASNOV, SAYING: "At our bank we've already had several waves of lay-offs and they're warning there might be more to come, so of course we feel insecure." Alexei and his accountant partner Yevgenia Syomina used to travel abroad two or three times a year. Not any more. (SOUNDBITE) (Russian) MOTHER OF TWO, YEVGENIA SYOMINA, SAYING: "We really want to have a third baby. But we can't afford to in this apartment. And we can't move because of our mortgage - we owe the bank more than this apartment is worth." Putin's ratings have been sky high since the start of the Ukraine crisis. But there are signs of discontent - these Communist party protestors are calling for the resignation of the Prime Minister Dmitry Medvedev. Their numbers were small. But with Putin's popularity largely based on prosperity and financial stability IG's Chris Beauchamp says he could be in trouble. (SOUNDBITE) (ENGLISH): CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: "The worry now is that the Russian economy is, not in a death spiral, but in an ever decreasing circle of a worsening situation so I think investors continue to pull money from the economy. That will continue to make Vladimir Putin's life very difficult and for ordinary Russians in particular so I don't think the worst is over just yet." One former finance minister fears that too. Alexei Kudrin says Russia can't recovery until ties with the West are restored. (SOUNDBITE) (Russian) FORMER FINANCE MINISTER, ALEXEI KUDRIN, SAYING: "Imports into Russia will decrease by approximately 40 percent next year. And imports of the investment nature will be under the greatest risk - that's machinery, raw materials, building materials for investment objects, construction sites, and industrial objects." Kudrin says as a result many current projects could be threatened. Combine that with a low oil price and growing public pain and Putin may need to adopt some skilful piloting over the coming weeks.

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Russia’s crisis hurts middle classes

Monday, December 22, 2014 - 02:11