Office of International Affairs

europe and eurasia

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With 46 countries from Iceland to Vladivostok , the Office of Europe and Eurasia covers a variety of advanced economy, emerging market, and transition economy issues. The office consists of five country economists and is led by a Director and Deputy Director.  The Office's primary responsibilities involve daily monitoring and analysis of economic developments in the region with the purpose of promoting U.S. policies, ensuring that these policies are reflected in the activities of the international financial institutions (particularly the IMF, World Bank and the European Bank for Reconstruction and Development), and keeping senior economic policymakers including the Treasury Secretary, Deputy Secretary, and the Under Secretary for International Affairs informed of our efforts.

Policy goals for the office include:

• Identifying ways to increase economic integration with Europe , the U.S. 's largest trade and investment partner;
• Promoting higher growth and increased productivity in an expanding European Union;
• Facilitating a successful transition to market-based democracies for the former communist block countries in Eurasia ;
• Ensuring IMF and World Bank activities achieve sound monetary, fiscal and financial policies;
• Leveraging greater private sector development through IFC and EBRD project finance;
• Promoting growth in the less advanced transition economies through small business development;
• Encouraging banking sector development and growth in financial services;
• Promoting greater regional cooperation in the less developed economies of Central Asia .

The means for achieving these goals include:

• Internal coordination with other Treasury Department offices largely responsible for institutional issues such as debt, development policy, banking policy and the international financial institutions;
• Active coordination with other USG agencies responsible for implementing economic policy such as the State Department, the Commerce Department, the Agency for International Development, and the Millennium Challenge Corporation;
• Participation in multilateral for a such as the G-7, G-10, G-20, the OECD, APEC;
• Engagement with staff at the international financial institutions such as the IMF, the World Bank, the European Bank for Reconstruction and Development, and the Asian Development Bank;
• Dialogue with our foreign counterparts in the Finance Ministries, Economy Ministries and Central Banks;
• Regular consultation with representatives of the private sector.

Recent accomplishments include:

• Expanding small business access to credit through the creation and management of Russia Small Business Fund and the U.S.-EBRD SME Trust Fund, which combined have provided over 800,000 loans worth $5 billion to almost 500,000 businesses in Eurasia;
• Achieved common understanding through dialogue with counterparts in the EU on factors driving recent gains in U.S. productivity gains and reforms needed to replicate such gains in Europe for the purposes of increasing growth;
• Establishment of the U.S.-Russia Banking Dialogue, which led to the incorporation of private sector recommendations in the Russian Central Bank's sector reform strategy;
• Creation of a trade and investment framework in Central Asia ;
• Coordinating the international community's economic response to the Rose Revolution in Georgia .

Priorities going forward include:

• Russia -- seek ways to strengthen economic component of the bilateral relationship; explore avenues for increased integration in addition to WTO (i.e. OECD); continue engagement on banking, fiscal (tax and expenditure), WTO financial services and natural monopoly reforms; assist Central Bank in its efforts to implement international standards of transparency and governance to prevent money laundering.
• Ukraine -- assist new government in efforts to stem possible diversion of public assets by old regime, encourage new government through visit of Under Secretary to seize opportunity for substantial economic reform (i.e. anti-corruption, WTO accession, privatization, deregulation), promote closer economic ties to West.
• Caucasus -- help maintain economic reform momentum in Georgia following Rose Revolution by encouraging greater focus on business environment, FDI; work with MCC to ensure effective implementation of proposals in Georgia , Armenia ; encourage banking and fiscal reforms in Azerbaijan to ensure oil wealth translates into broad-based economic development during economic task force meeting in May.
• Balkans -- encourage governments to accelerate pace of structural reforms, improve investment climate and facilitate private sector development; also promote dialogue on a variety of fiscal issues including appropriate size of government, quality of public expenditures, and impact of tax policies on labor and business costs.
• Central Europe -- build on Secretary Snow's Nov. 2004 visit to promote dynamism, high-growth focus of new members more broadly within EU; maintain close engagement with governments on fiscal and monetary challenges they face on road to euro adoption; encourage reform, anti-corruption efforts of new Romania government
• OECD -- implement G-10 Finance Minister WP3 tasking calling for analytical assessment of the impact of structural reform on global balance of payments; facilitate delivery of Secretariat Transatlantic Trade and Investment study.
• EU -- step up engagement with new Economic Commission; continue to emphasize importance of increasing growth, productivity.
• Tax Reform -- establish dialogue with IMF staff on lessons of tax reform in transition economies, in particular the impact of flat income taxes on compliance.
• Small Business Lending -- ensure ongoing success of the Russia Small Business Fund and the U.S.-EBRD SME Trust fund (covering the rest of Eurasia ) as the Group for Small Business, which operate these facilities on behalf of the U.S. and other donors, come under new management