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Yeltsin says Russia `hanging on’ and repeats need for moral support

SHARE Yeltsin says Russia `hanging on’ and repeats need for moral support

President Boris Yeltsin said on Friday Russia's battered economy was "hanging on" and repeated his view Moscow needed moral support rather than hard cash.

"Now there is a world financial crisis even strong countries like Japan are suffering," Yeltsin told reporters after flying to Kostroma, a provincial Russian town 200 miles northeast of Moscow. "We are hanging on for now."On his first regional trip this year, Yeltsin said he chose Kostroma, an ancient town on the Volga River, at random by dangling a pencil over a map.

Yeltsin said he had already told leaders such as President Clinton and German Chancellor Helmut Kohl their backing was more important than handouts.

"I did not beg," he said. "We don't need money, we need support. They believe we will hang on and not weaken. Their announcements on that score are decisive for all the investors and banks in the world."

Yeltsin has said before that Russia does not need money from the West, a sweeping statement usually taken to mean a rejection of a humiliating rescue package rather than of International Monetary Fund or capital markets resources.

His latest comments came just a day after government ministers said Russia needed at least $10 billion from the IMF to help stabilise its turbulent markets.

"The rouble is steady but at the limit. We in fact don't have enough money for payments. This is where the delays come from," Yeltsin said, referring to wage arrears that have prompted big protests by scientists, miners and other workers across Russia. "But it is a temporary thing."

He said he would discuss a programme to tackle the crisis at a meeting with the government and parliament on June 23.

"I will make a speech. Then we will confirm the program," he said.

Yeltsin said an IMF mission arriving next week would be told by Russian officials what steps the country was taking to overcome the financial crisis.

The IMF on Thursday decided to put off a decision on whether to disburse a $670 million share of an existing loan.

Kostroma is one of many Russian towns suffering from the effects of the wrenching political and economic changes which have followed communism's fall.

Boris Korobov, mayor of the town of 300,000 people, cited a web of debts among enterprises and state organisations, delays in paying wages and the city's inability to meet energy bills that had meant cuts in electricity and hot water.