Newly appointed Finance Minister Vladimir Panskov signaled that Russia would continue moving toward a market economy and that he favored reforms amid conflicting signs of his reformist credentials.
"I follow the government's course of reforms. I agree with the government's policy aimed at achieving financial stabilization," Panskov told Russian television in a weekend interview.
"We need to make our budget fairly tough," he added, referring to the draft 1995 budget which aims to cut monthly inflation to 1 percent in the second half -- compared to 15 percent in October -- with the help of some $12 billion in foreign credits and over 40 trillion rubles ($12.8 billion) in state security issues.
Experts have called the budget financing plan overly optimistic, saying that a recent string of unsuccessful government treasury-bill auctions bodes ill for its plans to borrow even more money domestically next year.
Nonetheless, new Economics Minister Yevgeny Yasin echoed Panskov's statements, vowing to stop Central Bank financing of the budget, a move he said was crucial for the fight against inflation.
Yasin told Russian Television that the government would stop unjustified state spending in 1995 and that several large-scale projects might be put on freeze.
"We cannot afford unjustified state spending, and we will not print money," he said.
He said projects that would have to wait included the construction of the Cathedral of Christ the Savior, which Moscow city authorities and the Russian Orthodox Church have been planning to build on the site of an open-air swimming pool. That project has an estimated cost of $200 million.
Yasin said the government would also not be able to finance a planned high-speed railway project between Moscow and St. Petersburg, which had been headed by newly appointed Deputy Prime Minister Alexei Bolshakov. Industry sources have said the project could cost as much as $2 billion.
Yasin said that the government was prepared to make concessions to parliament when the house debates the draft austerity budget for 1995 in the coming weeks, but that there would be no compromise on Central Bank financing.
"We may make concessions on some issues," he said. "We'll try to reach a compromise with the deputies."
Yasin added: "But we will be extremely stubborn on one particular issue -- the question of ceasing the use of Central Bank credits to cover budget deficits. This is a major issue which is important for fighting inflation."
President Boris Yeltsin named Yasin as new economics minister last Tuesday after the resignation of Alexander Shokhin.
Yasin has taken part in the preparatory work for most of Russia's economic reform programs. He is a professional economist and is not affiliated with any Russian political party. ()
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