Yeltsin fires entire government

AFTER being written off yet again by the outside world as too ill to govern, Boris Yeltsin roared back into the limelight yesterday by sacking his entire government, including two of its pivotal figures - Viktor Chernomyrdin, the Prime Minister, and his most aggressive free marketeer, Anatoly Chubais, the First Deputy Prime Minister.

Although his decision was a thunderbolt from the blue, the President was quick to issue a reassurance that Russia would press ahead with its programme of economic reforms, which are widely blamed by Russians for causing years of economic misery. The dismissal of the government "does not mean a change of course in our policy," he said in a nationwide television address from the Kremlin. It was an effort to give the reforms a "new impulse".

The sudden bout of political bloodletting drew a cautious reaction from the White House, which appeared to have no inkling that a major upheaval was planned. Bill Clinton, on a trip to Ghana, was left to say, somewhat lamely, that he "hoped that the general direction of policy will be unaffected".

The US will be reassured by Mr Yeltsin's appointment as acting prime minister of Sergei Kiriyenko, 35, the fuel and energy minister, who has a reputation as a committed reformist. It was unclear last night whether he would eventually be confirmed in his post. At one point yesterday, to the surprise of observers, Mr Yeltsin even talked of temporarily doing the job himself.

Although most other senior ministers are expected to survive, including the Foreign Minister, Yevgeny Primakov, the sackings are convincing evidence of Boris Yeltsin's tsar-like penchant for centralising power on himself.

In recent years, Mr Chubais, who is seen by Western investors as the linchpin of the reform process and who was the architect of Mr Yeltsin's re-election, has lost three government posts only to bounce back. The 42-year-old economist, who is already chairman of the national electricity monopoly, said yesterday that he expected to be flooded with job offers. But he is expected to remain in the President's team. So, too, is the interior minister, Anatoly Kulikov, who was also sacked by decree.

The departure of Mr Chernomyrdin, an unfailingly loyal Yeltsin ally, came as more of a surprise. For months he has been tipped as the next occupant of the Kremlin, apparently with Mr Yeltsin's blessing. Although the President said he now wanted him to prepare for the presidential elections in 2000, opinion was divided over the strength of his endorsement and his chances.

The markets reacted surprisingly calmly to the news, although Russia postponed a eurobond issue, which was to have been its first borrowing on the international markets this year.