Russian President Boris Yeltsin abruptly sacked his entire government on Sunday and unexpectedly reinstated former Prime Minister Viktor Chernomyrdin, just five months after he dismissed his veteran ally.
He gave no explanation for the move that ended 36-year-old Sergei Kiriyenko's tenure after only four difficult months and installed Chernomyrdin as acting prime minister.But there was no doubt it was prompted by a financial crisis that has veered out of control under Kiriyenko, dented public confidence in Russia's leaders and provoked angry calls in parliament for the prime minister and president to resign.
Vladimir Ryzhkov, a senior member of parliament, said he expected Yeltsin to formally nominate Chernomyrdin, 60, as full prime minister on Monday. Interfax news agency said he was already holding consultation on forming a government on Sunday.
Market analysts said they doubted Yeltsin's move would restore stability to Russia's panicky financial markets, shaken by last Monday's de facto devaluation of the rouble and what many analysts said amounted to a debt default.
"It smacks of panic," said Adrian Owens, portfolio manager at Julius Baer Investments in London.
The United States said it would continue to work with Russia to advance economic reforms and that it was crucial that the new government implement the reforms.
"It's most important for acting Prime Minister Chernomyrdin to take effective steps to deal with the economic issues confronting the Russian government," White House spokesman P.J. Crowley said, calling for good cooperation with Chernomyrdin.
He said President Clinton would go ahead with a planned visit to Moscow for a summit with Yeltsin Sept. 1-3.
It was the second time this year that Yeltsin, who has a penchant for the unexpected, has sacked his whole government.
The 67-year-old Kremlin leader fired Cher-no-myr-din and his cabinet on March 23, saying his long-time ally was incapable of accelerating reforms. But Russian shares have plummeted since then, and the ruble was in effect devalued last week as investors' confidence evaporated in the aftershocks of economic crisis in Asia and a fall in world prices of oil, Russia's main export.
A $22-billion bailout approved by the International Monetary Fund in July did not help to improve the situation.
Kiriyenko took the news calmly, an aide said, and then left the government's White House headquarters to talk to coal miners who have been protesting outside the building for more than two months to demand months of unpaid wages.
He was expected to leave his office formally this morning. Apparently as surprised to be fired as he was to be nominated by Yeltsin in March, Kiriyenko had been working all weekend on new measures to end the crisis.
Chernomyrdin gave no indication about whether he would alter economic policy. But a government aide said a long-awaited announcement of the terms of a key restructuring of Russia's debt market was likely to go ahead on Monday as planned.
Under the plan, an estimated $40 billion worth of short-term debt is to be converted into longer-term paper.
Some economic analysts said Chernomyrdin's appointment could end instability in the short-term because the veteran politician had wider political support than Kiriyenko.
But they noted the crisis was partly caused by mistakes made during Chernomyrdin's previous spell as prime minister, and some said nothing was likely to change fundamentally unless Yeltsin quit.
"In my opinion, Yeltsin is the problem. He is not the solution, and he has not been the solution for a long time," said James Millar, a professor at George Washington University.
Yeltsin was thought to be at a country residence outside Moscow and made no public comment on his decision.
The announcement preceded Yeltsin's return to the Kremlin on Monday, which will end several weeks of vacation. It was his first public reaction to the crisis since the government and central bank allowed the rouble to fall against the dollar.
He now has two weeks to nominate a permanent prime minister.
Chernomyrdin served as prime minister for more than five years until March and proved an acceptable compromise figure for many reformists, Western governments, Russia's powerful business leaders and even nationalists and communists.
The former head of Russia's natural gas monopoly Gazprom, he has a reputation as a solid but unspectacular reformer and has announced plans to run in the next presidential election.
Deputies in the State Duma, the lower house of parliament, welcomed Kiriyenko's dismissal but were cautious about Cherno-myr-din's return.
"It is hardly likely that anything will come of that. The government of Kiriyenko, in power for just a little more than 100 days, was just continuing what the previous cabinet did," said Duma speaker Gennady Seleznyov.