Yeltsin's Time of Troubles

July 29, 1993

Summers have been a politically hazardous time in Moscow ever since the Soviet system began collapsing.

Whenever Mikhail S. Gorbachev went on vacation, a perceptible power vacuum soon developed. There were rumors of dissension in the leadership, speculation about opposition plots. When a coup attempt finally was staged against him, it came during his summer vacation.

Much has changed in Moscow in the past two years. But it looked like old times again last weekend when Russia's Central Bank suddenly declared all pre-1993 ruble notes invalid, plunging the country into panic.

President Boris N. Yeltsin had to rush back from vacation to countermand parts of the ukase and stop the panic. His finance minister, Boris G. Fyodorov, scrambled back from a visit to the United States.

For the past year, the Russian government has been split by a serious disagreement about economic policy. President Yeltsin's reformist cabinet has pursued one line; the parliament, dominated by old-style communists, has advocated another. As if this were not enough, the Central Bank has often emphasized its independence by going against the wishes of both. The weekend's ruble invalidation underlined the Russian government's failure to forge consensus about monetary policy.

It is not clear what Mr. Yeltsin's involvement was in the currency exchange plan. But even if he did not have advance knowledge, as his partisans insist, the president's authority has been seriously undercut in terms of popular esteem.

Mr. Yeltsin understands this. He quickly attacked his new credibility problem the best way he could -- by firing his internal security minister for corruption and incompetence. The minister had nothing to do with the currency crisis but he became its first victim. Others are certain to fall as Mr. Yeltsin exercises a strong hand.

This crisis has reignited the protracted struggle over political power and economic reforms between President Yeltsin and his conservative opponents. It ended inconclusively a few months ago, when the parliament failed to muster enough votes to oust the president.

In retaliation, Mr. Yeltsin has been working on a new constitution that would effectively circumvent the current, obstructionist parliament and require new elections. Many politicians, understandably, are not happy. Jeffrey D. Sachs, the Harvard professor who advises the Russian government on the transition to capitalism, thinks there is even "a real possibility" that the Central Bank acted in coordination with the parliament "in an overt attempt to destroy the economic reform by stopping privatization and stabilization."

The currency crisis came just as Russia was beginning to show signs of emerging from its worst uncertainties. It is a serious setback that will have consequences difficult to repair.

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