1. The Finance Ministers and Central Bank Governors of the G-7 countries met today with Deputy Prime Minister Yegor Gaydar and other representatives of the Russian Federation, to discuss the historic events unfolding in Russia.

2. The Russian representatives described the economic situation in their country, Russia's financing requirements in 1992, the reforms that have already been implemented, and their intentions regarding the timing and adoption of additional policy measures which would permit Russia to implement an economic program meriting IMF support.

3. The Ministers and Governors welcomed the reforms already undertaken in Russia. They underscored that there is no productive alternative to establishing a market economy in Russia through the adoption of strong and comprehensive macroeconomic and structural reforms. They urged Russia and the IMF to complete negotiations at an early date on a comprehensive stabilization and reform program that provides for:

• Reduction of the budget deficit to stabilize the economy and reduce the role of government.

• Curbing monetary growth to bring inflation under control and stop the extension of credit to unviable enterprises.

• Establishment of the legal framework and contractual rights necessary to permits the development of a market economy, including privatization and private ownership.

• Reform of the agricultural and energy sectors to promote increased production and help earn foreign exchange.

• A foreign exchange mobilization system that enables the independent states of the former Soviet Union to meet their international payments.

• A unified and market-determined exchange rate set at the realistic level.

4. In this context, the Ministers and Governors expressed their commitment to support Russia's reform efforts during the difficult period of transition by providing the recently announced $24 billion multilateral financial assistance package within the context of an agreed IMF program.

5. To this end, they are prepared to provide up to $18 billion through substantial bilateral assistance together with other countries, through considering further deferral of Russia's outstanding indebtedness, and through supporting significant financial resources from the international financial institutions.

6. The Ministers and Governors are prepared to support G-10 activation of the GAB to finance a $6 billion currency stabilization fund for Russia. This fund, which would be established in conjunction with a comprehensive IMF program, is intended to help stabilize the ruble, facilitate convertibility of the currency and promote confidence in the Russian reform effort.

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Source: Canada Department of Finance.