Director of the IMF under fire for Russia

Director of the IMF under fire for Russia

Several members of the European Union have criticized International Monetary Fund (IMF) chief Kristalina Georgieva over creditors’ plans to launch reviews of Russia’s economy, the first since the country’s aggression against Ukraine.

France, Belgium and Poland, as well as several Baltic and Nordic countries, expressed surprise at a meeting of EU envoys this week at the Fund’s decision earlier this month to restart annual reviews of the Russian economy, people familiar with the matter said.

The Lithuanian representative said his country plans to raise the issue directly with Georgiou at a meeting of European finance ministers in Budapest on September 14, the sources said, speaking on condition of anonymity, the Luxembourg Times reported, citing Bloomberg.

Legitimacy for Putin?

Diplomats say they see it as a move to offer Russian President Vladimir Putin economic aid and legitimacy as the EU and US seek to isolate Moscow.

At the September 11 meeting, the Lithuanian representative said that the first mission of the leading international organization to Russia since February 2022 could be used by Moscow for propaganda purposes, to show that Russia’s international isolation is easing, the insiders said.

A letter to Georgieva is also planned, which, according to expectations, would be signed by several EU members, and in which concerns would be expressed regarding the process that seems to be leading to the normalization of relations with Moscow, sources said.

Institutional obligation of the Fund

The IMF announced earlier this week that it is restarting its annual reviews of the Russian economy because the economic situation in the region is “more settled” than before. The IMF audit, known as the evaluation referred to in Article 4, “is a mutual obligation” of the Fund and its members, according to the announcement.

“Article 4 is not an option, but an institutional obligation of the Fund and is implemented for the benefit of the entire membership,” the IMF said in its response, according to Bloomberg.

“Now we believe that we are in a situation where we can provide an economic analysis,” the Fund’s director for Europe, Alfred Kamer, said in an interview.

Both the IMF and Russia refused to clarify who initiated the restart of the analyses.

Quarterly growth of Russia 4 percent

US Finance Minister Janet Yellen said recently in an interview that she is not against annual reviews, but that it will be a problem if Moscow receives financial support from the Fund.

Russia has not applied for IMF assistance since 2000.

The IMF said its officials will begin online talks with Russian authorities on September 16 and then travel to Moscow for talks. The visit should begin on October 1. One of them said that the IMF tried to convince Russia that the meetings should be held in a third country.

Recently, Moscow appointed Ksenia Yudaeva, a former deputy governor of the Russian central bank, as a representative on the IMF’s executive board. She replaced Alexey Mozhin, who had been in that position since the nineties.

In the second quarter of 2024, the Russian economy recorded an annual growth of 4%, the Federal Statistical Service estimated in July. Growth is likely to slow for the rest of the year, according to economists polled by Bloomberg.

Source: Beta

Photo: EbS, Beta/AP