Russia's new team worries the West

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The Independent Online
THE HEAVY price Boris Yeltsin paid in his struggle to secure a government has become clear with the appointment of a Communist-backed official and avid money-printer to the chairmanship of the Central Bank.

It raised Western fears that Russia is lurching back to methods of the past and destroyed much of the relief that yesterday accompanied the Duma's 315-63 confirmation of the Foreign Minister, Yevgeny Primakov as Prime Minister. Yesterday he named Igor Ivanov as his Foreign Minister.

The appointment of Mr Primakov, 68, an ex-intelligence chief and perestroika liberal, closes the conflict between the President and legislature, which has seen a shift in the balance of power. Mr Yeltsin had to abandon his first choice, Viktor Chernomyrdin, after the Duma twice rejected him, and has also handed his opponents at least two senior government positions. The first, the Central Bank chairmanship, goes to Viktor Gerashchenko; the second is a senior economic position, almost certainly first deputy premier, for Yuri Maslyukov, a Communist ex-head of the Gosplan central- planning colossus.

A deal giving parliament the right to approve some Cabinet appointments has also been signed by Mr Yeltsin and is still before the Duma. Isolated and remote, he has weakened his grip on a once all-powerful office within days. Yesterday the oligarch Boris Berezovsky, a former sponsor of Mr Chernomyrdin, said Mr Yeltsin "has to resign, and soon".

He tried to salvage his image by appearing on television with an address to the people in which he conceded there had been no government for three weeks. Although Russia was "on the brink of crisis", the country now had a "government of concord", he said.

The scale of that crisis has been underlined by reports that some of Russia's 89 regions and republics are straining at the federal leash and introducing measures that cut across the constitution. Mr Primakov acknowledged that there was a "serious danger of the country fragmenting".

His appointment as a compromise prime minister should lower the political temperature, though he will need to act fast to stop the economy running out of control. In his pre-confirmation speech to the Duma he promised not to return to Soviet-style command systems but emphasised the need for state intervention, comparing his approach to that of Roosevelt's New Deal. "So what must we do? Repeat the wild capitalism that we had up till now? Or use the experience of other countries?"

The West will take little comfort from those words, which suggest a move away from the market and monetarism. Nor will it rejoice at the announcement by the liberal party, Yabloko, that it will not join the Primakov administration.

Mr Gerashchenko's appointment will cause hearts to sink furthest of all, especially among the IMF and other creditors. He was once described by the Harvard economist Jeffrey Sachs as the "worst central banker in the world".

t Ministers of the G7 industrialised nations and officials from the World Bank, the IMF and the European Commission are to meet in London on Monday for consulations overshadowed by the crisis in Russia and Asia.