Yeltsin Woos Lawmakers’ Support for His Fiscal Reforms

A conciliatory President Boris N. Yeltsin invited his political enemies to tea and sweet talk in the Kremlin on Tuesday, urging their support for vital spending cuts and tax reform to qualify Russia for a total $22.6-billion foreign bailout of its engulfing financial crisis.

Yeltsin needs cooperation from the opposition-dominated Duma, the lower house of parliament, to secure loans and credits from the International Monetary Fund, the World Bank and the government of Japan, and his usually combative style has given way to a veritable charm offensive.

“We are one team. We are one state. And we are the leaders of this state,” Yeltsin declared, gesturing toward the Communist, nationalist and other rival leaders of political factions in the Duma.

He hinted that presidential decrees could impose many of the changes demanded by the IMF in return for the bailout--$17.1 billion in loans announced Monday atop $5.5 billion already pledged.

But Yeltsin conceded to lawmakers that “the fate of the program mainly depends on you.”

The 450-member Duma reconvenes today after a short recess and will be presented with a packet of proposed legislation to severely tighten government spending and improve tax collection.

Without those internal reforms, the international lenders may withhold the funds urgently needed to prop up Russia’s beleaguered currency, the ruble, and restructure staggering debts.

To entice the Duma faction leaders to cooperate, Yeltsin, 67, promised them that both parliamentary and presidential elections will take place on schedule, in December 1999 and June 2000, respectively.

He denounced as “irresponsible speculations” the frequent assertions of political observers that he plans to dissolve the uncooperative Duma and call early elections in hopes that a more agreeable parliament will take shape.

Yeltsin also gave the strongest assurances to date that he has no plans to run for a third term--a possibility his aides have been bandying about as a means of keeping potential contenders off guard. The Russian Constitution prohibits the election of an individual as president more than twice, but Yeltsin ran for his first term before the document was drafted in 1993.

“I would like Russia in the year 2000 to begin working calmly with a new president,” Yeltsin, who has undergone heart bypass surgery and endured numerous ailments during his second term, told the lawmakers in televised opening remarks at the Kremlin meeting.

Another sign that Yeltsin was seeking to mend fences with the deputies he has fought with ferociously in the past was his firm rejection of a proposal from Russia’s powerful industrialists that they form a “state council” within the Kremlin to advise the leadership on economic matters.

The president and the Duma leaders were in full agreement in opposing the creation of “unconstitutional bodies of power . . . as proposed by the oligarchs,” Gennady N. Seleznyov, the Duma’s Communist chairman, told reporters after the meeting.

Another opposition lawmaker, Nikolai Kharitonov of the Agrarian Party, said Yeltsin was in an uncharacteristically “peaceful mood.”

The Kremlin meeting was apparently so constructive that Yeltsin’s spokesman, Sergei V. Yastrzhembsky, told journalists that he expected the stabilization program to win swift approval.

IMF directors are scheduled to meet Monday to weigh Russia’s moves toward fiscal restraint and tax reform, in effect giving the Duma and the upper house only three days to debate the measures and vote approval.

By Tuesday, news of the provisional loan agreement had boosted share prices on Russia’s savaged stock market by more than 25% over last week’s close. And interest rates on short-term treasury bills, which have reached 120% in recent weeks, fell to as low as 40%.