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Russia: Agreement With IMF Announced, But No Figures Given

  • Floriana Fossato



Moscow, 30 March 1999 (RFE/RL) -- Russian Prime Minister Yevgeny Primakov said at the end of negotiations with International Monetary Fund Managing Director Michel Camdessus in Moscow yesterday that the Fund has agreed to give Russia a new loan.

However, officials from both sides have offered no details on the size of any agreed loan.

The IMF suspended its loan program to Russia following last year's Russian financial meltdown. Since then, the two sides have been engaged in prolonged talks over new loans that Moscow desperately needs to keep its economy afloat, in part because renewed IMF lending would send an important signal to Russia's other foreign creditors.

Primakov made the announcement that an agreement had been reached after holding talks with Camdessus. Earlier yesterday, Camdessus had a telephone conversation with President Boris Yeltsin and promised "good news" for Russia.

Primakov told journalists that "we agreed with Michel Camdessus on cooperation. We agreed that they will give us a loan and we agreed that next week a full IMF mission will come to Moscow, to finalize details of the agreement."

According to Primakov, the main agreement reached yesterday is that Russia has promised to achieve this year a primary budget surplus, before calculations on debt service payments, of two percent of gross domestic product. The agreement was included in a joint communique distributed at the end of the talks. The IMF had originally asked for a primary budget surplus of 3.5 percent.

Camdessus, who was standing beside Primakov, confirmed the prime minister's statements, but offered no other details.

Primakov told reporters that a previously expected press conference would not take place, because Camdessus was in a hurry to get to his plane.

As reporters asked for a figure on the amount of the new IMF loan, Russia's tax minister Georgii Boos, who took part in negotiations, only said that the IMF "will give as much as is needed."

Russia is eager to refinance the $4.8 billion it owes the Fund this year. And some Russian officials have said Russian would need a loan of $8 billion to help pay off the country's massive foreign debts.

But Camdessus, who had arrived in Moscow on Saturday, said earlier he wasn't prepared to discuss any figures yet, and other Russian officials, as well as economic analysts, acknowledge the amount was likely to be less.

Primakov had been scheduled to meet with Camdessus in Washington last week, but he cancelled the trip during his flight to the U.S. after learning that NATO air strikes on Yugoslavia were imminent. Camdessus then agreed to come to Moscow.

Ahead of Primakov's aborted trip to Washington, most economic analysts in Moscow had forecast that a preliminary deal would be reached then, but that it would not be finalized for several weeks. This is what appears to have happened yesterday.

In an interview with Russian NTV commercial television last night, Camdessus said that his talks had not be affected by the bitter difference between Russia and NATO countries over NATO air strikes.

Some Russian analysts ahead of Camdessus' arrival in Moscow had gone as far as to say that NATO's air strikes on Yugoslavia had increased Russia's chances of reaching an agreement with the IMF. They argued that an IMF refusal would have been "embarrassing," as there would certainly be speculation that the IMF supports Russia's "destabilization."

Camdessus has not commented on the speculation. During his stay in Moscow he met with different Russian representatives, ranging from government officials, to Duma legislators, and even Orthodox Patriarch Aleksii.

Communist Party leader Gennady Zyuganov, who met Camdessus during a breakfast with leaders of parliamentary factions in the State Duma, told the Interfax news agency that he had been extremely straightforward in his message.

Zyuganov said he had accused Camdessus of "twisting the government's arms" by setting "totally unrealistic conditions" for the loan and also warned him that the IMF should either reach a loan agreement with the current government or "be prepared for a military or criminal government in the future."

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