FOCUS-Yeltsin urged to quit, Russia woes continue [Bolded sections are interesting]
Friday August 21, 3:38 pm Eastern Time
(Adds comments by Chubais, MENATEP decision on
Tokobank)
By Timothy Heritage
MOSCOW, Aug 21 (Reuters) - Russia's parliament called overwhelmingly on Friday for
President Boris Yeltsin to resign and blasted his government's handling of a financial crisis that
Prime Minister Sergei Kiriyenko said had only just begun.
The State Duma, or lower house, called for changes in the central bank leadership and
government, new policies, nationalisation of some banks and limits to foreign participation in
domestic markets.
It said new cash should be be printed and the privatisation of strategically important companies
suspended.
''The country is in a deep crisis and the president is not taking measures to protect the
constitutional rights of the citizens...which has created a realistic threat to Russia's territorial
integrity, independence and security,'' the Duma said in a hard-hitting, non-binding resolution.
As the Duma hit out at Yeltsin and his four-month old cabinet, Russian shares slid by more than
six percent in thin trading.
But chief debt negotiator Anatoly Chubais sought to reassure foreign investors, saying he was
sure Russia could meet all the targets set by the International Monetary Fund under a recent
bailout deal and promised the debt restructuring plan would be fair on foreign companies.
He said problem banks should be allowed to go bankrupt.
Even after the government effectively devalued the rouble this week, the opposition-led Duma
has almost no chance of dislodging Yeltsin or forcing Kiriyenko to change policy.
In a speech to deputies, Kiriyenko underlined the gravity of Russia's problems and called on the
Duma to start working with the government.
He defended his latest actions, which include announcing a compulsory restructuring of
short-term commercial foreign debt worth an estimated $40 billion and sticking to market
reforms.
''We have just entered a serious financial crisis...We cannot allow ourselves the luxury of being a
popular government,'' he said.
In a further sign of Russia's crisis, MENATEP bank said it was withdrawing a rescue proposal
for Tokobank, a Russian bank which has run into problems. MENATEP said it ''cannot rescue
this financial institution'' without having a controlling stake in Tokobank.
Yeltsin, visiting the Arctic Kola peninsula, did not comment directly on the financial crisis but
made clear he paid little heed to the criticism of his foes in parliament.
''These are ordinary procedures,'' he said in the city of Murmansk before watching a naval
exercise. ''They must not forget there is still a president. Some people forget that.''
Yeltsin sought to deflect attention from the crisis at home by denouncing U.S. missile strikes on
Afghanistan and Sudan carried out on Thursday following the bombing of the U.S. embassies in
Kenya and Tanzania.
His chief spokesman said the president had now ended his summer vacation and would be back
at his office in Moscow on Monday for the first time in weeks.
Yeltsin's absence was one of the motives for the fierce Duma attack. Public confidence in him
has also waned because he ruled out devaluing the rouble only three days before it happened.
The Duma later adopted a declaration describing Kiriyenko's government's work as
unsatisfactory but did not ask it to quit after just four crisis-ridden months in office.
Finance Minister Mikhail Zadornov urged deputies to help the government by passing all the
measures the cabinet had suggested to put the economy in order, including tax proposals.[This is the key...]
Central bank chairman Sergei Dubinin said the government's moves this week should make the
rouble's movements more predictable and help preserve gold and currency reserves, which have
been depleted by efforts to protect the rouble.
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