World leaders address 'economy of trust' in Russia

MOSCOW, 26 May 2018 [Fik/News Sources]: Leaders from France, Japan, and China along with the IMF head and Russia’s president spoke on the second day of the Saint Petersburg International Economic Forum (SPIEF) in the iconic Russian city.

The central theme of this year’s forum is "Creating an Economy of Trust".

Speaking at the event, Russian President Vladimir Putin said that fundamental principles that let most countries take the development pathway -- common rules, accepted by all the players, with their stability supported by clear legal mechanisms -- are being broken by sanctions and other kinds of limitations and protectionism.

In light of the global character of the world economy, this could result in crisis, he warned.

The world is changing the rules, but these changes must be transparent and apply to everyone, he said.

On the Iran nuclear deal, Putin said there was no reason to withdraw from it as long as Iran complies with it. He also said many countries, including Israel, benefit from the deal and that destroying it will hinder understanding of Iran’s nuclear activities, creating a threat. Iran's nuclear program after 2020 and missile program need further negotiations, Putin said.

On U.S.-Russian relations, Putin said he is not satisfied with them but Russia is awaiting steps from Washington.

On an investigation this week blaming Russia for the 2014 downing of Malaysia Airlines flight MH17 in Ukraine, Putin said that Moscow cannot accept its results because it rejected what Russia had to say.

Macron decries Trump’s moves

Also speaking at the event, French President Emmanuel Macron said trust is being lost in the international arena. He stressed that signed agreements should be honored.

Russia and France have had a lack of understanding during the last 25 years and now the situation needs to be changed, Macron said. He added that he wants Russia to remain in the Council of Europe, helping economic, social and defense issues gain new dynamics.

He said U.S. President Donald Trump lost when he withdrew from the Paris climate change agreement because no one followed his example.

Macron suggested that Trump withdrew from the Iran nuclear deal because it was signed by his predecessor. Saying he tried hard to persuade Trump not to withdraw, he also voiced support for EU measures to compensate European firms hit by U.S. sanctions over Iran.

Macron criticized the "erroneous" U.S. decision to move its Israel embassy to Jerusalem, adding that he supports a two-state decision in the region.

On possible EU expansion, Macron said that it would have to be done cautiously, as expansion without reform would not be very effective.

China 'won't allow' war on Korean Peninsula

Also speaking, China’s Deputy General Secretary Qishan Wang promised that China will not allow a war on the Korean Peninsula. He said despite cancellation of the U.S.-North Korea summit, the possibility of dialogue between the two countries remains.

On the threat of a Chinese-American trade war, he said that China doesn't want one because there are no winners in such "zero sum" wars.

Japanese Prime Minister Shinzo Abe said he regretted the cancellation of the U.S.-North Korea summit because the Korean nuclear problem must be solved. He said that North Korea must fulfill UN Security Council demands over its nuclear weapons program.

IMF chief warns of ‘clouds’ in world economy

There are three clouds that threaten the world economy, International Monetary Fund Managing Director Christine Lagarde told the forum.

The first cloud is a high amount of state sovereign debt -- $165 trillion, or 225 percent of the world's GDP -- she said.

The second cloud is many countries’ financial fragility, their dependence on the U.S., and the toughening of U.S. monetary policy leading to significant disinvestment of countries with fast-forming markets and average income levels, she said.

Lagarde called "the darkest cloud" "the desire of certain" parties to shatter the system that managed international trade ties, in what may have been a reference to Trump.

She also called on the U.S. to solve its trade problems with China within the World Trade Organization.