Russian MPs' antics risk hyper-inflation: Yeltsin ally under criminal investigation after parliament's end-of-term spree

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The Independent Online
IN A final, angry spasm before the summer recess, Russia's parliament yesterday authorised a criminal investigation against a top ally of President Boris Yeltsin, demanded the dismissal of the Interior Minister and the Mayor of Moscow, and took a swipe at the United Nations Security Council.

The flurry of denunciations follows a week of last-minute decisions that could, if implemented, seriously damage the government's economic policy, particularly efforts to cool inflation and lure Western investors.

Parliament's opposition to President Yeltsin had previously been muted by divisions over the stewardship of Ruslan Khasbulatov, the speaker, and distracted by arguments about the new constitution. The legislature was also badly demoralised by a referendum in April that gave Mr Yeltsin a mandate for reform.

This week's burst of activity coincides with Mr Yeltsin's holiday absence from the capital and suggests more end-of-term antics than a serious elaboration of an alternative policy. The Supreme Soviet now goes into recess for a month.

Among its decisions this week is a resolution restricting the activities of foreign banks, and another that would scrap the State Property Commission, the body responsible for selling off state assets. At the same time, though, legislators in the Supreme Soviet granted themselves the right to 'privatise' - which in most cases means buy for a nominal fee - both apartments in their home constituencies as well as the official housing granted for their term of office in Moscow.

More dangerous was a motion passed on Thursday approving additional government spending. This would increase the 1993 budget deficit to around 25 per cent of GNP instead of the 10 per cent promised by Finance Minister Boris Fedorov. Such a move risks pushing Russia back towards hyper-inflation.

The legislature also challenged the government's probity as well as its policies. The Supreme Soviet yesterday voted overwhelmingly in favour of investigating allegations of embezzlement by Vice Prime Minister Valery Shumeiko. He immediately derided the move as 'a show and a spectacle'.

A day earlier, investigators armed with a search warrant seized documents from the offices of Mikhail Poltoranin, a fiercely loyal Yeltsin ally who runs the Federal Information Centre and has been linked to shady property deals in Berlin.

Another Yeltsin loyalist under attack is Mayor Yuri Luzhkov of Moscow, who is also regularly accused of corruption. Parliament yesterday demanded his sacking, along with that of the Interior Minister, Viktor Erin, for their handling of May Day riots near Moscow's Yuri Gagarin Square.

Corruption is rampant in virtually all levels of government and has become a favourite target of opposition attack since April, when Vice President Aleksandr Rutskoi claimed to have 11 suitcases full of evidence against officials close to President Yeltsin.

Mr Rutskoi, now travelling the provinces to drum up support for his own brand of Russian nationalism, has himself been accused of using state funds to build a country dacha with a four-car garage, swimming pool, sauna and concrete perimeter fence.

Mr Khasbulatov ended yesterday's session with a speech castigating the government for kowtowing to the West and ruining Russia's economy. He also attacked the UN for backing Ukraine's claim to the Crimean port of Sevastopol.

Mr Yeltsin's camp also sounded an alarmist note. Lev Ponomaryov, a co- chairman of the once powerful but now fractured Democratic Russia movement, warned of a possible coup.

A calmer, more optimistic assessment was given by Viktor Chernomyrdin, the Prime Minister. 'We seem to have passed through the most difficult moment in the life of the country. . .We have left behind the most dangerous stage,' he said. But he added: 'There are still many difficulties ahead.' On the latter point, at least, few would disagree.