RUSSIA CRITICIZES NAVAL EXERCISES IN BLACK SEA. Russian Defense Minister Igor Sergeev on 25 August criticized the "Sea Breeze 97" naval exercises off the Crimean coast. ITAR-TASS quoted him as saying the exercises are "unjustified and will not help build international trust." Sergeev is leaving for Kyiv on 26 August for talks with Ukrainian officials on Ukrainian-Russian cooperation. Also on 25 August, the anti-NATO group in the Russian State Duma issued a statement describing the exercises as an "action openly hostile to Russia," Interfax reported. It threatened to call for Russia's withdrawal from the Partnership for Peace program. The statement was signed by commission chairman and Duma Deputy Chairman Sergei Baburin. The anti-NATO group consists of 254 deputies in the 450-member Duma.

PROTESTS IN CRIMEA AGAINST EXERCISES. Some 2,000 Crimea residents on 25 August protested against the "Sea Breeze 97" exercises, ITAR-TASS reported. Protesters also denounced Ukraine's warming ties with NATO. Russia opposes the exercises as a threat to its security and has repeatedly declined Ukraine's invitation to take part or send observers. Protesters included Russian nationalists and war veterans who carried red Soviet flags and banners bearing anti-NATO and anti-U.S. slogans. U.S., Turkish, Ukrainian, Georgian, Romanian, and Bulgarian ships are participating in the exercises, which started on 24 August at the Black Sea port in Donuzlav, on Crimea's western coast.

IMF APPROVES STAND-BY LOAN FOR UKRAINE. The IMF on 25 August approved a $542 million stand-by loan to Ukraine. The fund said it would provide some $49 million immediately and release the remainder in installments over the next year, provided Kyiv carries out promised economic reforms. A larger $2.5-3 billion loan was put on hold earlier this year because the IMF considered that Kyiv's economic reforms were not moving fast enough. The one-year stand-by loan will support the government's 1997-1998 economic program, which aims to consolidate the progress already made and to reduce inflation from 40 percent in 1996 to 15 percent in 1997 and 12 percent in 1998. To achieve those objectives, the budget deficit will be limited to 4.6 percent of GDP in 1997 and 4.5 percent in 1998, the IMF said.