Publication: Monitor Volume: 5 Issue: 189

International Monetary Fund Managing Director Michel Camdessus has been sending mixed signals concerning the fate of the next tranche of aid to Russia. The tranche–the second US$640 million installment from a US$4.5 billion loan agreed in July–was due in September but postponed in light of the Bank of New York money laundering scandal. On October 11, during a visit to Germany, Camdessus told reporters the release of the tranche was “a matter of days or weeks, not a matter of principle.” He declined to say, however, whether the installment would be released before Christmas. He did say that the Fund was “satisfied” with how Russia was “implementing the macro-economic part of the program,” which, he added, required that Moscow establish the “unquestionable integrity of its financial system” through audits and other control measures (Reuters, October 11).

By yesterday, however, Camdessus had somewhat changed his tone and emphasis concerning the tranche’s fate. Speaking to reporters in Paris following a meeting with French President Jacques Chirac, Camdessus said that the IMF would release the US$640 million “immediately after the Russians fulfill all the conditions they are supposed to fulfill.” He emphasized that there was no set timetable for the release of the tranche, and that the timing was “in the Russians’ hands.” Camdessus repeated that Moscow had very nearly fulfilled all monetary and macro-economic conditions, but made a point of mentioning “other conditions aimed at guaranteeing the integrity of the turnover of finances in Russia” (Russian agencies, October 12).

In the midst of all this, the Interfax news agency quoted Pavel Borodin, the Kremlin’s property manager, as categorically denying Russian media reports that US$200,000 had been transferred “from the Kremlin’s secret bank account to IMF Managing Director Michel Camdessus.” According to Russian agencies, “the media alleged that since Soviet times the Kremlin has kept several such accounts to pay the services of and gifts for highly placed foreign officials” (Russian agencies, October 12). Borodin was apparently referring to a small article recently published in the weekly newspaper Literaturnaya gazeta, which claimed that, the Kremlin has since Soviet times maintained several secret bank accounts for paying for “the services of” and/or giving gifts to high-placed foreign officials. Camdessus was said to have received US$200,000 from one of these accounts (Literaturnaya gazeta, October 6). The allegation concerning Camdessus was subsequently reported by the Italian newspaper La Stampa.

Camdessus, meanwhile, was quoted today as telling a French radio station that he may step down as IMF managing director before his term is up: “The second half of my third term has come. Possibly it is too much…. In time, I will have to think about when will be the best moment to leave” (Russian agencies, October 13). Russian media in recent weeks have been awash with rumors that he might step down before the end of the year. Just last week, Camdessus said he loved his job and had no intention of resigning. In May 1996, Camdessus was elected to a third five-year term as IMF managing director. He has held the post since 1987.