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Russia Says It Needs IMF Funds

June 23, 1998

MOSCOW (AP) _ The Russian government said Monday that it needs money from the International Monetary Fund to avoid a devaluation of the ruble but called some of the conditions the lending agency is seeking for a loan unacceptable.

As IMF negotiators headed to Moscow for talks on what could be a $10 billion to $15 billion bailout, Premier Sergei Kiriyenko met with President Boris Yeltsin to finalize the government’s strategy to combat the country’s economic crisis.

Yeltsin spokesman Sergei Yastrzhembsky told reporters that the government wasn’t happy with all the IMF demands for additional funds. The fund has been pressing Russia to sharply curtail spending, boost tax collections and reform its energy sector.

``We will look at and consider the conditions, but it goes without saying that far from all of the conditions are acceptable to us,″ Yastrzhembsky said.

The IMF last week said it was delaying the release of a $670 million installment of an existing loan to Russia because the government needed to take further steps to comply with conditions for receiving the money.

The Russian cabinet on Tuesday is expected to discuss steps for dealing with the crisis. Kiriyenko said the government program included many unpopular steps, including tightly reining in government spending, but that the poorest Russians would be protected.

Analysts have questioned whether Russia’s top officials, including Yeltsin, have sufficient political will to push through an austerity program. Yeltsin was giving ``maximum support″ to the program, Kiriyenko said.

Kiriyenko said that Russia could collect at least $16.6 billion more in income taxes if it cracked down on delinquents. Last year, only about 5 million of the country’s 147 million citizens paid income taxes.

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