Izvestia, December 10, 1999, p.2

Kiev’s triumphant announcement that the Ukrainian president had settled the issue of the $500 million gas debt has been refuted in a letter sent by Vladimir Putin to Leonid Kuchma. In the letter the Russian prime minister reminded Kuchma that the debt of Ukraine to Gazprom, taking penalties into account, is over $1.4 billion.

If so, Ukraine faces a complete collapse of its energy supply system.

Putin’s letter reached the Presidential Administration on the eve of Kuchma’s departure for the US, where he intended to receive another loan from the IMF. The appearance of the letter coincided with the aggravation of the financial crisis in Ukraine. The real exchange rate of the national currency fell in one day from 5.2 to 5.8 hryvnas to the dollar. A hard currency fever began in the country – the currency exchange offices stopped selling hard currency, while the National Bank said: the hryvna went outside the framework of the exchange rate planned for it.

In his message Putin asked Kuchma to resolve the issue of transferring $147 million to Gazprom. Ukraine promised to repay this sum in cash. Moreover, the Russian prime minister insists that Ukraine fulfill other financial commitments, in particular resuming supply of Ukrainian goods to state organizations of the Russian Federation and the Defense Ministry. The latter has not received $353 million worth of Ukrainian goods it was supposed to receive.

UNIAN Ukrainian news agency reports that having read the letter, Kuchma made a resolution: acting Prime Minister V. Pustovoitova should clear this matter up, while Y. Marchuk, Secretary of the National Security and Defense Council, should take the situation under his control. As for the rest, the Ukrainian authorities have given no response to the more-than-serious warnings of the Russian prime minister.


Rossiiskaya Gazeta, December 10, 1999, p.2

On December 9 the Central Election Commission withdrew from registration the federal lists of the Russian Conservative Party of Entrepreneurs (RKPP) and LDPR.

This was based on Wednesday’s Supreme Court presidium decision to reverse an earlier declaration that the Central Election Commission’s denial of registration to the RKPP and LDPR had been illegal.

Vladimir Zhirinovsky has already appealed to the Supreme Court; the appeal will be considered on December 10.

The meeting of the Central Election Commission on December 9 was interrupted after its head Alexander Veshnyakov left the conference hall as a sign of protest against Zhirinovsky’s strong criticism aimed at the directorship of the Central Election Committee.


Moskovsky Komsomolets, December 10, 1999, p.2

There is every sign that this year the Moscow authorities will pass the 2000 budget without delay, since the elections are coming up soon. On Wednesday deputies of the Moscow municipal Duma passed this basic document in the second reading. Here’s the main sensation – for the first time in eight years, the authorities are morally and physically ready to implement a budget with a deficit.

According to calculations, the deficit of the Moscow budget will be about 13.6 billion rubles (approximately 10% of the expenditures of the 2000 budget). However, within a year the deficit will be eliminated through loans and some small amount of revenues from privatization.

A tenth of the budget is too high, even compared with the federal budget. As for loans, they are in doubt. After the default, the credit ratings of Russian cities (including Moscow) have sharply fallen. Who will allocate considerable long-term loans at acceptable interest rates before the presidential election?

However, this year the Moscow budget has received a good level of extra revenues. This is due to improved industrial output: “in the three months following the crisis, we restored production volumes to 100%, while during the first 10 months of 1999 growth has been 6.2%”. This is clearly because the devaluation of the ruble by 2.5-3 times made domestic goods price-competitive. However, what will happen in the future?

Recently the Moscow mayor proposed to introduce an innovation from 2000: a 5% turnover tax on imported commodities, and a 1% turnover tax on domestic goods. The mayor thinks this measure will help domestic producers. So far the Duma does not have any definite opinion regarding this proposal; it is waiting for the opinions of trade analysts. We will wait as well.


Trud, December 10, 1999, p.1

On December 9 law enforcement agents sent a group of Sri Lankans from Rostov to Moscow, the first step in deporting them to Sri Lanka.

When the 34 young people from Sri Lanka arrived in Rostov, their papers showed they intended to study at the university. However, they took their time with arranging their legal status with the university, and the study contracts were never signed.

The university study was a mere pretext, reports the press service of the Rostov regional FSS department. Groups of people constantly penetrate Russia from CIS states. They have various intentions – from taking part in the Chechen events on the side of the guerrillas, to the use of Russia as a “temporary base”.

The FSS reports that during the inspection it received information that some of this group are probably involved in the Tamil Tigers, the Sri Lankan separatist movement.


RTR, Vesti, December 9, 1999, 19:00

Today the Russian president is in Beijing on an official visit. Boris Yeltsin and President Jiang Zemin met as old friends: China is one of the few countries which have expressed support for Russia’s actions in Chechnya. Igor Ivanov, Foreign Minister, is satisfied: it is much easier for his ministry to solve even the most difficult problems if they concern China. Today agreements on the final demarcation of the Russian-Chinese border were signed. In order to avoid possible conflicts, part of the border land will be used by the both parties. Today’s schedule also includes Yeltsin’s meetings with Li Peng, chairman of the Chinese National People’s Congress, and Premier Zhu Rongji. The latter is often described as the future head of state.


RTR, Vesti, December 9, 1999, 19:00

The clamor in the West caused by the activity of the Russian forces in and around Grozny must die down after today’s statement by Vyacheslav Ovchinnikov, Commander-In-Chief of the Internal Troops. In his opinion, there is a strong possibility of Grozny remaining under siege throughout the winter.

Vyacheslav Ovchinnikov: There is nothing to capture in the blockaded Grozny. We may maintain the blockade. If the guerrillas do not leave the city, they will be besieged, and we will take certain special measures. These measures will be carried out by special subdivisions, well-trained and experienced.

The press-center of the United Group of Forces in the North Caucasus explained the situation in the settlement of Shali. Recently local residents appealed to the Russian command. They intend to banish the guerrillas, so that the federal forces could enter the settlement unhindered. But at present the troops are not entering it, since there is a possibility of ambushes laid by the guerrillas. Civilians of many towns and villages of Ichkeria do not support illegal armed formations. For example, a home guard was organized in Shali. It intends to help the army to destroy the guerrillas. Today Sergei Shoigu said that by December 25, 125,000 refugees are to return to liberated areas of Chechnya. The Emergency Minister made this statement in Dagestan. He visited four regions of the republic which suffered from incursions by the Chechen guerrillas.


RTR, Vesti, December 9, 1999, 19:00

Moscow Mayor Yuri Luzhkov is going to take legal action against Alexei Mitrofanov, one of contenders for his post. The reason for legal proceedings was Mitrofanov’s statement that the Moscow mayor intends to accept 18,000 Chechen refugees in Moscow. Luzhkov holds that this is a malicious lie, aimed at distressing Muscovites in order to make them cease trusting the policy of the Moscow administration, which has always been aimed at social support and protection of the rights of residents. However, it is obvious that by thus securing the support of Muscovites, Luzhkov may lose the support of the regions.