Yeltsin Takes Time In Forming Government

From Yahoo News

Thursday September 17 7:40 AM EDT
By Alastair Macdonald

MOSCOW (Reuters) - Prime Minister Yevgeny Primakov, a compromise choice between Boris Yeltsin and Russia's Communists, hit a delay in forming a government Thursday when the president said the process would take another week.

Meanwhile, with a troika of anxious European Union ministers arriving to hear how Primakov and his Communist first deputy plan to haul Russia out of its deepest crisis inyears, Russians lined up again to dump the slumping rouble for dollars.

Many savers -- and some of Russia's Western creditors -- fear the new government may be tempted simply to print new roubles to pay off huge debts to state employees and pensioners.

German Foreign Minister Klaus Kinkel, arriving in Moscow for talks with British and Austrian colleagues, said Primakov had the EU's full confidence in dealing with the recession.

``We will help him and we wish the new Russian government luck,'' Russia's RIA news agency quoted Kinkel as saying.

But Austrian Foreign Minister Wolfgang Schuessel, whose country holds the EU presidency, took a rather different tone in remarks to German radio before flying to Russia.

He suggested western Europe, while unwilling to send more cash, should provide the Russians with economic experts. That is not an offer Primakov is likely to accept -- he has criticised the Western-inspired monetarism of previous failed governments and has looked to Soviet perestroika-era experts instead.

Confirmed in office last Friday after a dramatic climbdown by Yeltsin over his attempts to re-install former premier Viktor Chernomyrdin, Primakov had said he expected to name a full cabinet by the end of this week. Under the constitution,he has until Friday to present the president with his proposals.

The former foreign minister has already appointed moderate Communist Yuri Maslyukov as first deputy and three Chernomyrdin supporters as other deputy prime ministers. He has confirmed continuity in the defence, interior and foreign ministries.

But Russian news agencies quoted Yeltsin as saying the choice of a finance minister was a tough one and he would need up to a week to consider it, leaving Russia still without a full government nearly a month after Yeltsin sacked the old one.

According to Interfax, the president said: ``The question of the finance minister is a difficult one.''

In televised remarks at a Kremlin meeting with Defence Minister Igor Sergeyev, Yeltsin said: ``I think yet another week is needed to finalize the formation of the government.''

Thursday's Izvestia newspaper commented: ``The cabinet taking shape under Primakov is so mixed that it is impossible to say what color it is -- red, pink or white.''

Communist leader Gennady Zyuganov has said his party will take no part in government with the exception of Maslyukov -- a move some analysts say reflects a reluctance to take the blame for new hardships before elections due within two years.

The refusal of center-left leader Grigory Yavlinsky, the man who originally proposed Primakov as a compromise, to commit his Yabloko party to the cabinet also means the prime minister is likely to have to stick with many old faces in his new team.

Speculation focuses on whether Primakov, who says market reforms must be tempered by state help for domestic industry and welfare, will keep on liberals like former deputy premier Boris Fyodorov and Acting Finance Minister Mikhail Zadornov.

Even seasoned observers are getting few clues to Primakov's thinking. A former head of foreign intelligence, he has choked off the usual leaks from the White House government building.

The rouble, which lost some 30 percent of its value on the streets of Moscow Wednesday, was weaker again, with many exchange points simply refusing to accept the Russian currency.

On the SELT electronic trading system of the Moscow Interbank Currency Exchange (MICEX), the central bank delayed trade for half an hour. By lunchtime it was around 16.40 per dollar compared with the official 12.4509 set the previous day.

Thursday's rate was nearly a third of what it was worth exactly a month ago, before the previous government of Sergei Kiriyenko announced a freeze on debt payments and let the rouble float on August 17. A week ago it was worth just 20 per dollar.

Primakov must now persuade Russians and the West that he can steer Russia out of its post-Soviet slump without re-igniting inflation and can also impose Moscow's will on an economy increasingly fragmented into regional fiefdoms and plagued by the corruption that marred all earlier attempts at reform.

He and Maslyukov, once head of Soviet planning, were to meet Kinkel, Schuessel and British Minister for Europe Joyce Quin.

Yeltsin has tried to play down the gravity of Russia's crisis, telling his old ally, German Chancellor Helmut Kohl, by telephone Wednesday that things were returning to normal.

He was likely to deliver the same message to another old friend, former Japanese Prime Minister Ryutaro Hashimoto, in talks scheduled in the Kremlin Thursday. Hashimoto, now a foreign policy adviser to his successor Keizo Obuchi, is in Moscow to help promote traditionally troubled bilateral ties.

But Yeltsin, once a combative leader who relished a challenge, is looking increasingly weak and isolated these days.


 

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