Chernomyrdin flags economic about-face as rouble falls again

President Clinton, who is on holiday on Martha's Vineyard, spoke to President Yeltsin yesterday by telephone, the first conversation…

President Clinton, who is on holiday on Martha's Vineyard, spoke to President Yeltsin yesterday by telephone, the first conversation between the two leaders since Mr Yeltsin dismissed his government on Sunday, a White House official said.

The White House said earlier that a Moscow summit between Mr Yeltsin and Mr Clinton next week would go ahead as planned.

Mr Yeltsin dismissed his entire government on Sunday, including the Prime Minister, Mr Sergei Kiriyenko, replacing him with Mr Viktor Chernomyrdin, who was sacked from the post in March.

The US Vice-President, Mr Al Gore, spoke to Mr Kiriyenko and Mr Chernomyrdin on Sunday, stressing that Russia urgently needed economic reform.

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As acting Prime Minister, Mr Chernomyrdin signalled a sharp economic about-face for Russia yesterday, saying he would offer cabinet seats to the opposition and pronouncing himself a champion of industrial revival.

The former Soviet-era energy minister said only a broad-based government could rescue the country from utter collapse.

"It is necessary to form a government of accord," Mr Chernomyrdin said. The term is a Russian formula long used by Communists. In particular, the opposition wants a quick reversal of the economic policies that resulted in last week's de-facto rouble devaluation. The Russian currency crashed more than 9 per cent yesterday to suffer its worst day since "Black Tuesday" of October 1994. The rouble has lost almost 20 per cent of its value in only eight days.

Mr Chernomyrdin yesterday had meetings with Duma faction leaders to win them over before his confirmation hearings next week.

While Mr Chernomyrdin came out in favour of a coalition government, he has yet to name cabinet nominees. But he has offered a glimpse of his economic plans.

"The priority will be, first of all, the defence of social interests of the population, the payment of salaries and pensions," Mr Chernomyrdin told the mass-circulation Komsomolskaya Pravda daily in an interview published yesterday.

"And second, a government industrial policy, since purely monetary measures will not pull the country from its crisis," he added.

Mr Chernomyrdin promised not to "break over his knee" the entire economic reform programme championed by his liberal predecessor, Mr Kiriyenko.

"The task for Chernomyrdin today is to choose people from different political parties who will not push their own economic agenda," said a key aide, Mr Alexander Shokhin.