Russia on Tuesday approached a deal with the Paris Club of sovereign creditors concerning debt buyback. Igor Shuvalov, a senior aide to President Vladimir Putin, said Russia would take advantage of buying back its $43bn debt to the Paris Club even if it did not get the discount Russian officials had said they were looking for. A discount is considered to be inappropriate by the creditors.

Mr Shuvalov’s comments follow a decision by European Union finance ministers to weaken the terms of the stability and growth pact that fixes debt and deficit ceilings for members. Germany, Russia’s biggest Paris Club creditor, has made a lot of efforts to comply with the deficit criterion and is trying to bring forward revenues.

Last year, Germany disrupted Russia by turning €5bn of the debt into tradable securities. On the one hand it helped Germany, on the other it caused reduction of prices for Russian bonds. Russia, whose public finances have improved thanks to high oil prices, has sought to thwart similar moves with a proposal it buy back all of its Paris Club debt, according to Paivi Munter.

However, the eased tension in terms gives Germany better opportunities, but may lessen Russia’s chances of securing a discount. Russia is about to spend some of its oil stabilisation fund to buy back its Paris Club debt.