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Russia opposes minimum fiscal stimulus for G20

MOSCOW (Reuters) - Russia will oppose UK proposals for all G20 members to set a mandatory minimum fiscal stimulus level at 2 percent of gross domestic product and cut interest rates, a Russian delegation source told reporters on Thursday.

The source said both proposals were included in the draft communique circulated by G20 host Britain ahead of a meeting of G20 finance ministers and central bankers in Horsham, southeast England on Friday.

“We need to differentiate between groups (of countries). We will need to discuss it taking into account opinions of BRIC countries,” the source said regarding the minimum fiscal stimulus requirement.

Delegations from Brazil, Russia, India and China will meet ahead of the G20 meeting on Friday. Russia’s own fiscal stimulus package currently amounts to 4.5 percent of GDP.

The source said another UK proposal calling for all G20 countries to cut interest rates in line with similar policies in the United States and the euro zone countries did not reflect the realities of commodity-exporting economies.

“The economic situation is different and there is no common recipe for interest rate policy,” the source said. Russia has been raising its interest rates to support the rouble’s exchange rate and stem capital flight.

UK Foreign Office Minister Mark Malloch-Brown criticized Russia and other emerging nations for not doing enough to stimulate their economies and for keeping high interest rates to support their currencies and stem capital flight.

Reporting by Gleb Bryanski; Editing by James Dalgleish