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Al-Ahram Weekly 24 - 30 June 1999 Issue No. 435 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 24 - 30 June 1999 Issue No. 435
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Features Interview Travel Sports Time Out Chronicles People Cartoons Letters Among friends
By Abdel-Malek Khalil"The most important thing is to mend ties after a fight," said Russian President Boris Yeltsin who joined other world leaders on the final day of their meeting last Sunday. Yeltsin went out of his way to court the Western leaders gathered in the German city of Cologne for the G-8 summit. Striking a conciliatory note after repeated confrontations with NATO over the Kosovo campaign Yeltsin declared, "I am among friends now."
This was Yeltsin's first visit abroad since his last bout of pneumonia and cardiac complications. Yeltsin did not attend the opening ceremony, however, and missed the first two days of the summit altogether. However, he dispatched Russian Prime Minister Sergei Stepashin in his stead to head the Russian delegation.
Leaders of the other seven leading industrialised nations attending the Cologne summit pledged on Sunday to rapidly conclude a debt rescheduling deal for Russia, as soon as Moscow fulfils criteria set out by the International Monetary Fund (IMF).
In a joint communiqué, the seven heads of state said the Paris Club of governments and other official creditors should continue reviewing the issue of Soviet-era debt, which now stands at a staggering $69 billion. The Russian economy, already in shambles, can ill afford to keep up the crippling debt service payments. Western leaders also pledged to support Russia in its efforts to achieve economic stability and lasting growth.
German Chancellor Gerhard Schröder, whose country holds the bulk of the outstanding Soviet-era debt, said Russia was in a special situation "where one has to help as best as one can." The German chancellor also hinted that bilateral talks between Germany and Russia over Soviet-era debt would be held in the wake of the G-8 summit.
"But we can't just write [Russian debts] off. That would overtax Germany's strength," Schröder warned. "We will talk about the problem and will certainly find a solution," he added optimistically.
Their is growing concern in Germany that Russia will default and thus spark off a financial crisis in the German banking system that could drag down the whole economy. The Germans are already feeling nervous about the weakness of the euro; the last thing they need is a further source of financial anxiety.
With Schröder's socialist government scraping around for major budget cuts, a Russian debt write-off could only be hugely unpopular.
The G-8 welcomed the recent framework agreements between Russia, the IMF and the World Bank, and urged Moscow to implement them as soon as possible. Stepashin assured Western leaders that Russia would comply with IMF requirements, despite stiff resistance from Russia's Communist-dominated Parliament, the Duma.
The G-8 leaders said they had instructed aides to follow up and coordinate efforts on supporting Russian economic reforms. They said they were keen to extend their cooperation on the application of the law, transnational organised crime and money-laundering, and Russian mafia-arranged capital flight.
The billions of dollars, much of it international aid, that has flowed out of Russia in recent years is a major drain on the country's economy, and will be one of the main themes of a ministerial meeting on crime to be held in Moscow this autumn.
