Combined Reports


New clashes between President Boris Yeltsin and parliament are coming when the lower house takes up the 1995 budget, a deputy prime minister said Thursday.


Sergei Shakhrai told the cabinet the confrontation could be in full bloom by December, despite Yeltsin's cabinet shake-up replacing almost the entire government economic policy team.


Lawmakers are expected to vote on the austere spending plan by the end of January.


Shakhrai told Itar-Tass that a confrontation might be avoided if Yeltsin clearly defines the job of the seven deputy prime ministers and names state secretaries for each ministry to handle relations with parliament.


Yeltsin, visiting the industrial city of Izhevsk on Thursday, said the cabinet reshuffle should make the government "more efficient for conducting reforms.''


Clearly in a confident mood, the president declared that he had hand-picked the new ministers for his government.


"I selected all the personnel myself and I know them all," he told reporters. "The government, like any organism, needs new blood in order to run faster."


Since last week, Yeltsin has named a new economics minister, promoted privatization chief Anatoly Chubais to first deputy prime minister and has named two new deputy prime ministers.


The government's austere 1995 draft budget ran into more trouble Thursday when a senior economic aide to Yeltsin criticized the document and said changes should be made.


The budget, likely to face a rough ride through the Duma, calls for state subsidies to be slashed and monthly inflation to be cut to 1 percent by the second half of the year, from 15 percent last month.


"The price of implementing such a budget will be too high. I don't think the purpose justifies the means," Alexander Livshits told a news conference. He was especially critical of plans to cut central bank funding of the budget deficit from 70 percent to zero in a few months and said it would have been better to cut central bank deficit funding gradually over three years. The government had over-estimated the amount it could raise by issuing bonds.


"The budget can be as harsh as possible but it has to be realistic," he said. "If there is a lot of (bonds) and yields are good, where will you get money from to pay them back?"


Asked about Russian inflation rates, Livshits said: "I do not see any reason why we should not have 15 to 20 percent annual inflation a year in the next few years. I think it would too expensive to get annual inflation down to the European norm of 7 to 8 percent a year in the next four or five years."