Primakov has little time on hand as race begins to halt economic slide

The new Russian Prime Minister, Mr Yevgeny Primakov, starts his job today amid an economic slide which leaves him little time…

The new Russian Prime Minister, Mr Yevgeny Primakov, starts his job today amid an economic slide which leaves him little time to form a government.

He takes over a country where the political landscape is in flux, the banking system is teetering on the brink of collapse, the currency has plummeted and soaring prices could fuel discontent as winter draws near.

Mr Primakov was appointed last Friday after President Yeltsin yielded in a stand-off with the communist-led parliament. The former foreign minister, who says Russia needs international funds, was quick to assure the west that he would pay off its debts.

"Russia is not the kind of country that will declare itself bankrupt and it will never become this," he told Russian media executives on Saturday. "The new government will see to this and it is already working in this direction."

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Foreign and finance ministry officials from the Group of Seven countries will meet in London today to discuss the Russian crisis. They have said that credits will not be on their agenda until they see actions to back up Mr Primakov's words.

Mr Yeltsin, who has been badly weakened by the political crisis, shored himself up by reappointing Mr Igor Sergeyev, Mr Sergei Stepashin and Mr Sergei Shoigu as ministers of defence, the interior and emergency situations respectively on Friday.

The future of the acting deputy prime minister, Mr Boris Fyodorov, the only leading reformer left from the short-lived cabinet of the young technocrat, Mr Sergei Kiriyenko, is unclear. Mr Yeltsin was forced on Friday to concede to a demand from parliament that a communist, Mr Yuri Maslyukov, be put in charge of the economy, and that Mr Viktor Gerashchenko, a Sovietera central bank chief, be reappointed to the job.

The liberal newspaper Russky Telegraf said Mr Primakov would have to act fast, cautioning that the talent for compromise which made him the ideal candidate for resolving the political crisis might be his downfall when it came to the economy.

"The situation calls for an unambiguous choice of economic course. The payments crisis and collapse of the banking system, instability of the rouble, possible shortages of goods and regional separatism mean the government must take quick decisions," the paper said on Saturday. "However, the appointment of Viktor Gerashchenko and Yuri Maslyukov leaves no doubt that the economy in Russia has once again been sacrificed for a tactical political truce."

The business newspaper Kommersant Daily said the jury was still out on Mr Primakov, noting that the communists, who dominate the Duma, planned to keep up pressure for a change of economic policy and for Mr Yeltsin's resignation.

President Clinton, told Mr Yeltsin on Saturday that the US would support international aid to Russia as long as Moscow continued with free market reforms.