EU offers Russia advice but rules out extra cash

Date: 03/09/1998

By Simon Taylor

SENIOR European Commissioners this week ruled out offering Moscow additional financial aid, saying the response from the Russian authorities to the “substantial sums” made available had been “disappointing”.

While the European Commission was expected to agree to boost technical assistance to help Russia's ailing financial and legal system at its meeting today (3 September), it will argue that further economic assistance in the form of new loans is “not appropriate”.

In a paper jointly prepared by Foreign Affairs Commissioner Hans van den Broek and economics chief Yves-Thibault de Silguy, the Commission insists that “efforts to help Russia are useless in the absence of strong commitment to reform”.

Instead of providing extra cash, the two Commissioners say the focus should be on using means within the existing technical assistance Tacis programme to accelerate and deepen the reform process.

Among measures being considered are the offer of more advice on how to achieve budgetary consolidation, debt restructuring and reform of the commercial banking system.

Another option highlighted by the study is to concentrate Tacis resources on projects which have an immediate impact on restructuring of state enterprises and boosting investment.

The Commission discussion coincides with the postponement of a planned EU-Russia summit, due to be held on 18 September, because of uncertainty over the future of acting Russian Prime Minister Viktor Chernomyrdin.