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. Last Updated: 07/27/2016

Russian Economic Plans Given Thumbs Up

FUKUOKA, Japan -- Leading industrial nations gave a thumbs-up Saturday to Russia's economic reform plans but told Moscow it had to stamp out money laundering in return for help in restructuring $43 billion of its foreign debt.

Russian Finance Minister Alexei Kudrin said a reform program he outlined to finance ministers of the Group of Seven leading industrial countries in the southern Japanese city of Fukuoka had gone down well.

"We see it as vital for bringing the Russian economy to the point where it could participate in the global economy," Kudrin said.

But Germany, Russia's largest creditor, reaffirmed its opposition to a write-off, saying it was not in Moscow's interest to be treated like a poor developing country begging for debt relief.

"So we are prepared to extend their debts inherited from the Soviet era but not to forgive them," said German Finance Minister Hans Eichel.

Germany's hard line could lead to tension when the issue comes up at the annual summit of the G-7 plus Russia on Okinawa, Japan's southernmost island, July 21-23.

German sources said the United States was hoping to persuade its G-7 partners f Japan, France, Britain, Canada and Italy in addition to Germany and the United States f to help Russia reduce its debts, not simply stretch out their repayment.

The G-7 made it clear to Kudrin that its threat of sanctions f which could include blocking loans from the International Monetary Fund f was not an idle one.

With the price of oil exports surging, Russia is not in desperate need of fresh cash. Its economy grew by 3.2 percent last year, the fastest rate since the collapse of the Soviet Union in 1991.

But it requires the IMF's stamp of approval to win a restructuring of Soviet-era government-to-government debt.

The IMF has held up new loans for Russia since last year pending implementation of structural reforms and assurances about the new government's plans.