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Page last updated at 00:19 GMT, Tuesday, 16 September 2008 01:19 UK

IMF approves loan to help Georgia

Georgian refugees in Gori
Tens of thousands have been displaced by the August conflict

The International Monetary Fund (IMF) has approved a loan for Georgia, amounting to $750m (418m).

It is aimed at rebuilding the country's currency reserves and boosting confidence in its economy following last month's conflict with Russia.

Analysts say the money could offset any difficulty Georgia might have in selling products abroad or in attracting foreign investment.

The approval came as Nato chief Jaap de Hoop Scheffer was visiting Tbilisi.

He called for Georgia's "accelerated" integration with Nato and condemned Russia's conduct in the conflict.

But Mr de Hoop Scheffer - speaking at the first meeting of the Nato-Georgia Commission - did not say when Georgia might join the alliance.

EU aid

A third of the IMF loan will be released immediately, with the rest to come in stages over the next 18 months.

David Owen, a senior IMF adviser, told reporters that the funding was above normal limits for the fund, because of the "exceptional pressures" facing Georgia.

He added that Georgia's growth prospects had been hit by the Russian incursion, but that the economy was well placed to recover quickly.

Also on Monday, the EU announced 500m euros (397m, $712m) to help Georgia's recovery.

European Commissioner Benita Ferrero-Waldner said the aid would go to assisting internally displaced people, post-conflict rehabilitation, and towards new infrastructure.

In Brussels, EU foreign ministers were set to clear the way for at least 200 ceasefire monitors to deploy to buffer zones around South Ossetia and Abkhazia, ahead of an expected Russian troop withdrawal by 10 October.

It is unclear whether the monitors will actually be allowed to enter the breakaway regions, which are full of Russian troops.

In August Russia launched a counter-attack and the Georgian troops were ejected from both South Ossetia and Abkhazia.




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