Soviet, Russian Leaders Renew Plans for Union

BORIS YELTSIN and Mikhail Gorbachev were on the road last week, each seeking what the other has. Russian President Yeltsin was in Germany for three days looking for international acceptance. At the same time Mr. Gorbachev traveled to the Siberian city of Irkutsk and the Central Asian republic of Kirghizia in a bid for popular support for his vision of continued union."We are determined to occupy a worthy place among democracies which rightfully belongs to Russia," Mr. Yeltsin told an audience of German industrialists. "Nothing but a union state can take us from this marsh and restore order within the whole of the economic space," Gorbachev told the daily Rabochaya Tribuna. "If there is no union state, I shall not take part in the discussion." The Soviet leader sounded this theme in factory speeches and on the streets, where he met with what the official Tass agency called "a good deal of bitter words" from residents standing in long lines before stores with empty shelves. Such sentiments are hardly new, but it is a long time since the much maligned Soviet leader heard them first-hand. Gorbachev has increased his tempo in recent weeks in beating the drum for union. He is pushing hard for the former Soviet republics to sign a treaty forming a Union of Sovereign States to replace the old Union of Soviet Socialist Republics. Last week he spent two and half hours trying to convince republican leaders of this, a task he will resume today when they meet again in Moscow. At the same time, Gorbachev argues that political union and economic reform are inseparable. Without a united state "in the international arena ... it will be impossible to implement reforms," he said in the interview published on Nov. 22. His chief economist, Grigory Yavlinsky, has drafted a package of eight agreements designed to implement the treaty to form an economic community that was signed in October. These agreements cover foreign debt, taxes, budget, social security, prices, and inter-republican agreements to deliver food and other goods. The experts have done their work, Mr. Yavlinsky told journalists, now it is time for the politicians to act. A joint communique signed by eight republics with the Group of Seven leading industrial nations gave the unionists a significant boost from the West. The G-7 offered limited deferral of payments on the Soviet Union's medium- and long-term debt, as well as some short-term credits to meet immediate needs. But they demanded in turn the republican acceptance of collective responsibility for repayment through the existing central Vneshekonombank and implementation of economic policies under the supervision of the International Monetary Fund. Those policies include reducing the huge budget deficit, curbing growth of the money supply, liberalizing prices and foreign exchange, and maintaining "free inter-republican trade." "We're not trying to recreate the center," United States Undersecretary of the Treasury David Mulford insisted after the talks. "We've tried to help all the relevant parties set up a system to solve their problems." But the Ukrainian government, which refused to sign the pact, remains skeptical. Ukrainian Prime Minister Vitold Fokin called US involvement "gross interference" in the Ukraine's domestic affairs. The effect is to block the Ukraine's plans to issue its own currency and its restrictions on the flow of goods from the republic, the second largest and richest in the former Soviet Union. "From what we have been told, the Ukraine will become an adjunct to the USSR, if not to Russia, which we cannot agree to do," Mr. Fokin said, according to Interfax. Ukrainian parliament leader Leonid Kravchuk, who is expected to win election as president Dec. 1, rejected Gorbachev's political union as well. "I believe in a treaty with Russia more than with the union," he told the daily Komsomolskaya Pravda Nov. 21. Common policies on military or space problems are fine, he said, but "it is not necessary to create a union with the cabinet of ministers and the president's team." In practice, though not always in words, Yeltsin agrees with this view. In Germany, Yeltsin advanced the idea that Russia is the successor to the disintegrated Soviet Union. He sought approval from jittery German industrialists for Russia's plan to implement radical economic reforms, as well as reassuring them about commitments to repay the Soviet Union's $84-billion foreign debt. "Not a single creditor will lose his money," Yeltsin said. "In case the republics fail to come to an agreement, Russia will be ready to take upon itself the payment of a considerable part of the Soviet foreign debt." The Germans appeared impressed with Yeltsin's performance, according to reports in Moscow, with Foreign Minister Hans-Dietrich Genscher calling his visit "extraordinarily successful" and Chancellor Helmut Kohl pledging full support for Russian reforms. Yeltsin said full diplomatic relations would soon be established between the two states. While Yeltsin was in Germany, the Russian parliament voted to take control of the Soviet State Bank and Bank for Foreign Economic Affairs - two of the strongest remaining central institutions - and place them under control of the Russian central bank. Yeltsin defended the move, saying it was designed to facilitate the establishment of a centralized banking union. In addition, he said it was necessary to control the rampant printing of rubles by the State Bank if Russia's reforms were to succeed. But the state bank takeover also prompted renewed infighting between the legislative and executive branches in Russia, something that has held up reforms in the past. Yeltsin wanted the banking system subordinate to the government, which he heads, but parliament voted for legislative control. Yeltsin aides said reform would be impossible under such an arrangement. "I do hope the government and the parliament will find ways to establish effective cooperation, in which we are all interested," said Deputy Russian Prime Minister Yegor Gaidar.