Leading Article: The American president can still make a difference

WHAT DOES one say about today's meeting of Presidents Bill Clinton and Boris Yeltsin - two discredited leaders propping each other up as they desperately seek to get to the finishing line of the Millennium?

The White House must be wishing that it had never pencilled in the summit for 1 September as a means of bringing Clinton back on the world stage after his holiday. Even Moscow is embarrassed by having some 400 US journalists and half the State Department descend on it for a meeting that can now only show just how far they have slipped from superstar status.

The last time an oversexed President met an over imbibing President was when JF Kennedy met with Nikita Kruschev for an ill-fated embrace which was to lead directly to Cuba and Moscow's miscalculation of the new American President's resolve. This time, no one really expects any results. Those days are gone because political leaders no longer have very much real power over global affairs. The markets, and underlying forces, have taken over and just at the moment they are making things very difficult indeed in Russia.

The country is not in the position to do what the Hong Kong authorities have been spending nearly $10bn trying to do: sustain the currency and squeeze the speculators. Nor would anyone advise them to do so.The IMF has no funds for further aid. Nor would the US Congress sanction the Federal Government to increase its assistance.

Powerlessness need not mean futility, however. The right words at this time can help. And no one should doubt President Clinton's ability to deliver them. He understands better than any leader since Churchill and Roosevelt how much politics is the art of tone. The world and the markets, never mind the Russians, do need an air of reassurance at this time; a feeling that while the problems are Russia's and theirs to solve, they will not spread or bring down the rest of the world with it.

For a start, Russia, while a pygmy in economic reality, remains a superpower in ballistic capability. For the Europeans, who no longer have to fear the threat of short- and medium-range ballistic missiles, this may not have much reality. But for the Americans it does. There is sense in propping up Yeltsin's personal position so long as he remains head of the armed services and he can now be kept above the domestic morass around him.

The economic ramifications of the present crisis are more difficult to control. But again fine words can butter some parsnips. Markets cannot be reversed, but given the right nudge they can be stilled and even occasionally turned. Finance without barriers allows problems in one part to move very rapidly to others through the medium of currency swaps, futures and the "exotic" financial instruments that have been developed at such a hectic pace in the last few years. But that very fact gives the total system a depth and breadth with which to cope.

The need at this moment is to still any further waves of concern. And here American leadership can make a difference. As the largest economy in the world, its continued growth is of vital importance to the rest of the world. As the headquarters of global finance, the decision of its institutions set the pace elsewhere.

Now is the time for Western central banks to start easing up on interest rates and the US Federal reserve could start the process in its meeting this month. In the same way, US banks could do an enormous amount of good, or bad, in their negotiations over the financing of Brazil and Argentina.

No one is saying that, with a wave of his hand, Clinton can make Russia's political problems or the world's financial crisis disappear. But he can help influence events if the timing is right On that score he still remains a master.