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Russians Face More Uncertainty

Russians started the weekend with absolutely no idea what kind of government they're going to live under, what their currency is worth, or what the future might bring.

About the only thing clear after a week of political and economic limbo in the world's second-largest nuclear power was that President Boris Yeltsin was alive and working Friday - no small detail. Rumors of his death or resignation had rocked world financial markets a day earlier.

The president, who'd spent the past five weeks at his country retreat outside Moscow, returned to the Kremlin, seemingly eager to prove to his constituents and the world that he's in control.

"I'm not going anywhere,"Yeltsin said in a nationally televised interview Friday evening."I'm staying at work ... to the end of my term. In 2000, there will be a new election."

Yeltsin had had a very busy day. He met with the visiting Bulgarian president, as well as with U.S. Deputy Secretary of State Strobe Talbott to talk about President Clinton's upcoming visit to Moscow, scheduled to start Tuesday.

Meanwhile, acting Prime Minister Viktor Chernomyrdin spent the day horse trading with hard-line opponents over their demands for Yeltsin's resignation and a reversal of free-market reforms.

Chernomyrdin accepted a package of Soviet-era economic measures, which parliamentary leaders had demanded as a condition for confirming his appointment, Russian news agencies reported. These demands from the Communist-led State Duma included an economic strategy that would reassert state control over the banking and defense sectors.

In another apparent concession to hard-liners, Yeltsin fired prominent reformer Anatoly Chubais, putting him out of a government job for the third time. Chubais was the government's chief negotiator with international lenders, obtaining a $22.6 billion emergency bailout package this summer that failed to stem the financial crisis.

Russia's economic crisis snowballed last week when the government announced it was devaluing the ruble and effectively defaulting on $32 billion in debt. Soon after, Yeltsin fired the 5-month-old government of Prime Minister Sergei Kiriyenko. Since then, the ruble has fallen more than 40 percent against the U.S. currency.

In the midst of the shaky political situation, the official currency bourse remained closed for the third straight day. The last transactions on Tuesday left the official exchange rate at 7.86 rubles to the dollar. The street rate was about 10 rubles to the dollar. The Russian stock market rose 5.6 percent on very thin trading of 5.5 million shares. The benchmark Russian Trading System index is at historic lows.

Parliamentary leaders called for a special Monday session of the State Duma, parliament's lower house, to consider Chernomyrdin's confirmation as prime minister. Duma deputies said earlier this week that quick approval for the 60-year-old veteran politician was depenent on Chernomyrdin's promising to appoint a coalition government and erase some of the sweeping powers Yeltsin gave the presidency when he oversaw the framing of the country's constitution.

Yeltsin's envoy to the Duma, Alexander Kotenkov, said Chernomyrdin had agreed to the hard-liners' economic proposals and would present them to parliament as his own program, the news agency ITAR-Tass reported.

The package calls for such Soviet-style economic measures as currency controls, fixed prices, state ownership and the printing of new money.

"Privatization didn't lead to a restructuring of the economy and has failed to create an effective class of property owners,'' the draft proposals said, according to an Associated Press report. "The situation demands increasing the role of the state in regulating the economy."

The agreement would give lawmakers more say over Cabinet appointments and government policies. It apparently also would offer certain guarantees - such as immunity from prosecution - if a president stepped down. This provision fueled speculation that Yeltsin's resignation was imminent.

Discussions with the Duma were expected to continue through the weekend. Legally, however, Chernomyrdin has no obligation to follow through with any political deal struck with the Duma.

Written By Margaret Coker, Moscow Correspondent, CBS MarketWatch