(Bloomberg) — Several European Union nations intend to challenge International Monetary Fund chief Kristalina Georgieva about the Washington-based lender’s plan to engage with Russia on economic issues for the first time since the invasion of Ukraine.
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At a meeting of EU envoys Wednesday, France, Belgium and Poland, as well as several Baltic and Nordic nations, said they were surprised by the IMF’s decision earlier this month to restart annual economic reviews with Moscow, according to people familiar with the matter.
A Lithuanian representative said the country planned to raise the issue directly with Georgieva during a lunch meeting Friday in Budapest with European finance ministers, said the people, who asked not to be identified as the meeting was private.
The diplomat added that they see the move offering President Vladimir Putin economic assistance and a veneer of legitimacy as the EU and the US seek to isolate Russia.
Lithuania’s representative also said during the Wednesday meeting that the first mission by a major international organization to Russia since the February 2022 invasion could be used by Moscow as propaganda to show its international isolation is easing, the people said.
It also plans to send a letter to Georgieva, which it expects to be signed by several EU members, expressing concern over a process that appears to be leading toward normalizing relations with Moscow, they said.
The IMF said earlier this week that it’s restarting annual reviews of Russia’s economy because the region’s economic situation is “more settled” than before. The review, known as an Article IV evaluation, is a “mutual obligation” of the fund and its members, it had said.
“Article IVs are not an option, but an institutional obligation for the fund and are carried out for the benefit of the whole of the membership,” the IMF said in an emailed response to questions Thursday.
“We now believe that we are in a situation where we can provide economic analysis,” the head of the fund’s European Department, Alfred Kammer, said in an interview.
Both the IMF and Russia have declined to clarify who initiated the restart.
US Treasury Secretary Janet Yellen said in an interview last week that she didn’t object to the annual review, but would have an issue with Moscow receiving IMF financial support. Treasury declined to comment further. Russia hasn’t applied for IMF aid since 2000.
The IMF has said its staff would start discussions virtually with Russian authorities on Sept. 16 and then travel to the country for in-person discussions. That visit is scheduled to start Oct. 1, according to the people, with one adding that the IMF had tried to convince Russia to hold the meetings in a third country.
The move came shortly after Ksenia Yudaeva, a former first deputy governor at Russia’s central bank, was appointed by Moscow as its representative on the executive board. She’s replacing Alexey Mozhin, who had held the position since the 1990s.
Russia’s economy grew 4% annually in the second quarter, the country’s Federal Statistics Service estimated last month. Growth is likely to slow over the rest of the year, according to economists surveyed by Bloomberg.
–With assistance from Daryna Krasnolutska and Eric Martin.
(Corrects day of lunch meeting in third paragaph.)
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