Russians begin to form government: Western jitters are calmed by reports that Fyodorov will stay on as finance minister, but coalminers threaten to strike

RUSSIA had the skeleton of a new government last night, with reports that a radical reformer was being kept on alongside an old-style Soviet industrialist. After another day of talks between President Boris Yeltsin and the Prime Minister, Viktor Chernomyrdin, Interfax news agency said that Boris Fyodorov would retain his post as Finance Minister despite threatening to quit.

The news will comfort Western governments who credit Mr Fyodorov with bringing inflation down to 12 per cent in December from near the hyper-inflation threshold of 50 per cent a month. The price has been scores of factories, including Russia's biggest car- maker, AvtoVaz, shut down for lack of cash and parts.

'What had seemed a tragedy is now looking far better. The clouds gathered but no storm,' said Anders Aslund, a government adviser. 'It was all set for a conservative formation. All that has fallen through.' He said the change of plans had been forced by panic over the rouble. 'If Fyodorov goes, the rouble goes through the floor. They know this. It is the first time that the market has mattered in Russian politics.'

A sign that the cabinet would listen to industry, however, was the confirmation of Oleg Soskovets, who is close to Mr Chernomyrdin, as first deputy prime minister. Mr Aslund described both as 'Brezhnevite'. Reformers were trounced in elections on 12 December but the resignation on Sunday of another first deputy premier, Yegor Gaidar, the original architect of Russia's market reforms, marked the beginning of the unravelling of the government.

Mr Fyodorov, Mr Gaidar's main ally, said on Tuesday he would stay on only if both the chairman of the central bank, Viktor Gerashchenko, and deputy prime minister Alexander Zaveryukha were sacked. Neither of these terms seem to have been met. But in what smacked of a calculated rebuff rather than a technical hitch, as claimed later by officials, Mr Fyodorov arrived at the Kremlin yesterday for a meeting of the Security Council only to find his name left off a security clearance list.

As officials argued in Moscow, the Independent Miners Union in Vorkuta, suppliers of energy for St Petersburg and Moscow, threated to strike next month. Many have not been paid since November and say a package promised by Mr Gaidar has not been fulfilled.

The rouble meanwhile continued its free-fall. It had held steady last year but crashed after Mr Gaidar stormed out of the cabinet saying he was besieged by conservatives. The rouble, which stood at 414 to the dollar in January last year and at 1,247 two weeks ago, plunged yesterday to 1,607.

The main reformist party in parliament, Russia's Choice, has displayed near suicidal tendencies. After securing only 15 per cent of the vote in December, it has begun to splinter. A leading member, Andrei Makarov, said he was joining a new reformist grouping called 'December 12 Union' which has of 27 MPs, just short of the 35 needed to be registered as a formal faction, a status that would ensure membership on committees and speaking time.

Yeltsin loses way, page 21

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Guru Careers: Bathroom Showroom Manager / Bathroom Sales Designer

£22 - £25k basic + Commission=OTE £35k + Benefits: Guru Careers: A Bathroom Sh...

Guru Careers: Marketing Executive / Digital Marketing Executive

COMPETITIVE: Guru Careers: A Marketing / Digital Marketing Executive (CRM, Eve...

Recruitment Genius: Locksmith / Security Engineer - London & Southern Counties

£20000 - £30000 per annum: Recruitment Genius: This provider of home security ...

Recruitment Genius: Web Designer / Developer

£20000 - £25000 per annum: Recruitment Genius: This creative agency requires a...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones