Originally created 09/24/98

Russian government seeks additional aid

MOSCOW -- Russia will continue to seek financial assistance from abroad while pursuing free-market reforms to combat the crisis in its economy, Prime Minister Yevgeny Primakov said Wednesday.

Primakov has been calling on international lenders to help Russia through its crisis, but without a clear-cut plan of action, it appears unlikely that any funds will be forthcoming.

At a meeting with Horst Koehler, the visiting head of the European Bank for Reconstruction and Development, Primakov said Russia needed help to rebuild its economy.

Primakov, who has been in office for 12 days and has yet to outline his economic program or fill several key cabinet posts, said Russia would continue economic reforms, but their implementation will be "considerably adjusted."

The prime minister said for Russia to overcome the crisis, his government needs foreign support, "both in the form of consultations and financial backing."

The EBRD, established in 1991 to help countries in Eastern Europe move toward market economies, has provided loans to a number of Russian industries.

Koehler, without making any firm commitment, said the bank was prepared to invest further in Russia if the government takes "resolute" moves to stabilize the economy and restore investors' confidence.

President Boris Yeltsin, in a telephone conversation with French President Jacques Chirac, said the government was working on a plan to stabilize the economy, the Interfax news agency said. Chirac voiced full support for Yeltsin and the anti-crisis efforts, the report said.

Many private investors have fled Russia in recent months, and foreign banks that bought billions of dollars of government bonds have complained that they are being discriminated against while the government tries to bail out Russian banks.

Lenders, such as the International Monetary Fund, are expected to delay installments on existing loans at least until the new government details its plans for coping with the crisis.

Meanwhile, there has been no serious talk of new loans to Russia by the IMF or anyone else.

Russian officials were planning to hold separate talks with a visiting IMF delegation, as well as discussions with Western banks seeking better terms on debt restructuring deals.

Russia's banking system has been virtually paralyzed by the crisis, which hit just over a month ago. Some banks remain closed, while others are handling only limited transactions. Most individual and corporate clients still cannot make routine payments and transfers.

Russian stocks ended lower Wednesday in light trading. The official ruble rate remained at about 16 to the dollar.


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