South Africa next? I doubt EU will risk world crisis by having less than 20% gold...not enough paper to go around...
U.S., G7 nations plan aid for Russia
08:44 p.m Jun 01, 1998 Eastern
By Adam Entous
WASHINGTON, June 1 (Reuters) - The United States said on Monday it was
working with other Group of Seven major industrial nations on providing
more financial aid to Russia to keep it from sliding further into
financial chaos.
The announcement underscored Washington's concern about the economic
turmoil in Russia, but for a second day failed to provide details on the
size, scope and timing of the emergency response the U.S. administration
was planning.
''We are now very actively involved in working with Russia, in working
with the G7 nations, in working with the IMF and the World Bank with
respect to the financial situation, the reforms that Russia would need
to continue taking in order to be successful, and then additional
financing,'' U.S. Treasury Secretary Robert Rubin told CNN's
''Moneyline'' program.
''All of this will be focused through the international financial
institutions, most immediately through the IMF, although the World Bank
also has a very important role to play,'' he added.
Asked if the United States would provide financial support directly to
Russia, the treasury secretary said: ''I don't think that unilateral or
bilateral action, either one, is the most effective way to proceed.''
President Bill Clinton announced on Sunday that Washington would help
mobilize more aid for Russia if needed from the International Monetary
Fund and the World Bank to calm financial markets and make it easier for
Moscow to cope with the effects of Asia's economic crisis.
The announcement followed high-level talks between senior U.S. and
Russian officials and was designed to reassure investors that the United
States, through the IMF and World Bank, was ready to step in to calm
markets.
''The past few days have been difficult for Russia, as well as other
emerging markets,'' U.S. State Department spokesman James Rubin told a
news conference earlier on Monday. ''However, Russia's new policy
package, an agreement with the IMF staff, was the right framework to
reassure investors.''
He said the government was putting ''a sound fiscal strategy in place to
promote a stable ruble,'' and commended Russian Prime Minister Sergei
Kiriyenko on meeting with representatives of several major Western
banks.
''This proactive approach to implementing their economic strategy and
explaining it to the investment community is a good sign that the
Russian government is seriously committed to restoring confidence and
stability to the Russian market,'' the State Department spokesman said.
Mark Medish, deputy assistant secretary of the U.S. Treasury, expressed
guarded optimism about Russia's economy, saying the country was on the
right path with its reforms although it may face a bumpy ride in the
short term.
''I am bullish about the Russian Bear,'' said Medish. ''I am prudently
bullish.''
But so far Washington's pledge of support has failed to satisfy currency
markets, and Russian shares slumped over 10 percent to their lowest
close since October 1996 on Monday.
The Clinton administration has offered few specifics about its proposal
for additional emergency aid.
Analysts say the IMF may need to come up with billions of dollars in
extra cash to help Moscow in the coming months, on top of the money it
has already pledged. The IMF signaled last week that it would quickly
disburse the next $670 million tranche of a $9.2 billion existing loan
to Russia.
The IMF and World Bank have declined to comment on Washington's support
for additional aid.
Treasury Secretary Rubin said it was important for the United States to
help Russia, as it was critical for Washington to support Asia's
crisis-hit economies.
''It is vitally important to our interests that this be worked
through,'' he said.
Citing market turmoil in Asia and Russia, he urged the U.S. Congress to
approve new funding for the IMF.
The Clinton administration has been trying to convince Congress to
provide $18 billion to replenish IMF resources drained by
multibillion-dollar rescue deals for Indonesia, South Korea and
Thailand.
But the IMF package has stalled in the House of Representatives, where
it faces stiff opposition.
''The IMF is at historically low (funding) levels,'' Robert Rubin said.
''It is critical that the House act, and act quickly.'' REUTERS
Copyright 1998 Reuters Limited. |
