08/03/1998 15:28:47 FOCUS-Yeltsin signs crisis laws, to resume holiday
By Brian Killen
MOSCOW, Aug 3 (Reuters) - President Boris Yeltsin, who last week interrupted
his summer holiday citing Russia's economic crisis, will resume his vacation on
Tuesday or Wednesday, the Kremlin press service said on Monday.
Yeltsin, who is currently staying at his Gorky-9 residence just outside
Moscow, will fly to the Valdai lakeland northwest of the capital, it said. It
gave no further details.
The Kremlin said Yeltsin had signed into law several key pieces of
legislation under the government's programme for dealing with Russia's financial
The president's decision to resume his holiday follows a cautious vote of
confidence in the measures from the deputy head of the International Monetary
IMF First Deputy Managing Director Stanley Fischer, who held talks at the
weekend with senior government and central bank officials, welcomed progress in
implementing the austerity plan but warned that complacency would jeopardise
The IMF's praise for the measures taken so far failed to stem declines in
Russian stock and bond markets on Monday as sentiment was undermined by weak
The benchmark RTS1-Interfax index of leading shares closed down 2.68 percent
at 145.64, while most treasury bill yields rose by between five and 10 percent
in thin trading.
Yeltsin's decision to leave town again suggested confidence that the crisis
was under control. But social unrest in isolated areas warmed up on Monday as
protests by unpaid miners pushed a major power station towards total shutdown
and other miners refused to end a blockade of the Trans-Siberian railway.
Yeltsin arrived back in Moscow last Wednesday, several days earlier than
planned, saying he had to prepare politically for the autumn. "I need to get
prepared and go into this period decisively without any hesitations," he said.
Russian media also partly attributed Yeltsin's early return from the Karelia
region, where he had been spending the first leg of his vacation, to poor
weather which ruined his plans to go fishing.
Yeltsin is not expected to resume work in the Kremlin until the second half
of August. The coming months are expected to be very tough as the government's
austerity measures aimed at fighting Russia's economic crisis start to bite.
Yeltsin signed some of the measures last Friday, including the core of a new
tax code aimed at simplifying the complex system and the withdrawal of subsidies
to closed cities.
The Kremlin press service said he had also signed a law changing the basis
of Russia's tax system, which includes the introduction of a sales tax of five
percent on luxury goods.
The measures are part of a funding agreement reached with international
lenders worth a total $22.6 billion that is meant to help stabilise Russia's
The new credits have given the government some breathing space to implement
measures aimed at boosting tax collection and to carry out some big
The Finance Ministry said on Monday it did not plan further international
borrowing before the end of October, and the amount sought by year-end would be
no more than $2 billion.
A senior government source said a five percent stake in Russian gas monopoly
Gazprom would probably be sold in a single lot to a western investor in
"The sale is planned for September because, by all accounts, in September it
will be necessary to balance the budget," the source said.
The source added that Gazprom had paid its tax dues in full for July, with
total tax revenues from all sources reaching around 12 billion roubles ($1.9
billion) that month. "In August we must collect 13 billion roubles," he said.
The government meanwhile kept up pressure on oil companies who have failed
to make tax payments on time.
A Fuel and Energy Ministry spokesman said oil companies SIDANKO and Onako
had until August 5 to cover their debts to the budget or their access to export
pipelines will be cut.
The energy sector is worst hit by a non-payments crisis that has led to
widespread but sporadic protests over wage arrears.
Miners on the Pacific island of Sakhalin have been blocking coal deliveries
at the main power plant for 10 days, causing power cuts of up to 14 hours a day
for much of the island's 650,000 people. Officials said on Monday they were now
close to shutting the plant down altogether.
($= 6.2440 roubles)