Russia 'trusts and believes' in the euro - Vladimir Putin

Russia, which holds over 40 per cent of its forex reserves in euros, trusts and believes in the single European currency and is sure its current woes are only temporary, Prime Minister Vladimir Putin said.

"We trust and believe" in the euro, Mr Putin told AFP in an interview this week in the southern Russian Black Sea resort city of Sochi.

"We would not hold such a huge amount of our currency reserves in the European currency if we did not."

The European Union is by far Russia's biggest trading partner and Moscow has warily eyed the financial problems that have hit the eurozone since the extent of Greece's budget problems became apparent.

Russia was itself hard hit by the global economic slowdown, with the economy contracting 7.9 per cent last year, but it has managed to avoid a second wave of crisis like that suffered by debt-ridden Greece.

The powerful Prime Minister, seen by most as Russia's de facto number one, said there was no objective reason for the plunge of the euro and he was sure its problems would not last.

"In my view, there exist no objective conditions for the fall of the euro," said Mr Putin, who was due today to start a two-day visit to eurozone powerhouse France.

"Yes, there are some difficulties. I am certain they are only temporary."

The euro has suffered a dizzying fall over the last weeks over worries about the budget situation of several European countries, with the common currency this week dipping below 1.19 dollars for the first time in over four years.

Mr Putin, however, said Russia saw no need to change the structure of its reserves, held largely in euros and US dollars with around 10 per cent in sterling and just over one per cent in yen.