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. Last Updated: 07/27/2016

Maslyukov Fears Kosovo-IMF Tangle

First Deputy Prime Minister Yury Maslyukov said Monday that he expects to reach a final agreement on new loans with an International Monetary Fund mission coming to Moscow this week - unless talks are marred by Russia's support of Yugoslavia.

The IMF says its talks with Russia have nothing to do with politics, including Moscow's harsh criticism of NATO air raids against Yugoslavia. Prime Minister Yevgeny Primakov has also said that the issues are unrelated.

Primakov and IMF Managing Director Michel Camdessus agreed in principle last week that the fund would resume its lending to Russia, but details have yet to be worked out.

Maslyukov, who is in charge of talks with the IMF, said Monday that the tension over Yugoslavia may affect loan talks. Maslyukov voiced hope that political differences over NATO airstrikes won't "spoil'' them, Interfax reported.

"They have started to rebuke us for offering humanitarian help to Yugoslavia, while we in turn are ourselves receiving humanitarian help'' from the West, Maslyukov added.

Russia has signed agreements with the United States and the European Union on food aid intended to help Russia get through its worst economic crisis since the 1991 Soviet collapse, which has made even staples unaffordable for the poor.

But Russia's talks with the IMF had been stalled since August, when the fund froze a loan package over Moscow's decision to devalue the ruble and default on some debts.

An IMF mission is expected in Moscow on Wednesday to work out details of the new loan. It is to complete its study of the Russian government's finances by April 24, when the IMF has its annual board meeting.

While the IMF says it has not yet agreed on a sum, Russian officials have said they are asking for $8 billion.

However, Finance Minister Mikhail Zadornov said Sunday that Russia did not need such a large loan, Interfax reported, quoting an interview with the minister on the Mayak radio network.

"We do not seek to live in debt, but we need a sum that can ensure the fulfillment of our basic tasks in the financial sphere. Going deeper into debt makes no sense,'' Zadornov was quoted as saying.

Russia needs new loans to avert a looming default on its huge foreign debt, which requires $17.5 billion in payments this year. Russia has only earmarked about half of the sum, hoping that an agreement with the IMF will convince creditors to reschedule or write off the rest.

The ploy appears to be working. After the IMF announced it is willing to reopen credit to Russia, the World Bank said it is ready to hold loan negotiations. World Bank chief James Wolfensohn is scheduled to come to Moscow in mid-April for talks.

Meanwhile, Maslyukov said Russia could attain a 2.5 percent budget surplus by 2000 if the country's relations with the IMF continue to improve.

The budget could have a 2.5 percent surplus - 1 percent short of the goal lenders had been demanding for months - "if our relations with the International Monetary Fund still develop favorably,'' Maslyukov said after an economic meeting of top government officials Saturday, according to Itar-Tass.

Maslyukov reiterated that thought Monday, saying that he hopes Russia's contacts with the IMF will "become of the non-stop nature. ... We have to begin thinking about our relations in the year 2000 and the following years."

While Primakov's Cabinet has been unable to achieve a major breakthrough in dealing with the economic crisis, inflation has slowed down in comparison with last fall.

Maslyukov said prices rose by 2.8 percent in March after running at 4.1 percent in February, 8.5 percent in January and 11.6 percent in December.