Yeltsin Sacks Government

Russian President Boris Yeltsin dismissed Russia's entire government Monday in an announcement that shocked the world. He insisted reforms would stay on track.

"The dismissal of the government does not mean a change of course in our policy. It is an effort to make economic reforms more energetic and effective, to give them a political push, a new impulse," Yeltsin, 67, said in a television address.

The Kremlin also said foreign policy would not be altered.

White House spokesman Mike McCurry, traveling with President Clinton on his tour of Africa, said the U.S. welcomed Yeltsin's promises to continue reform and his decision to restructure of his government.

"We took a special note of President Yeltsin's reaffirmation of his government's commitment to reform, which was rather unequivocal, and we take that as an important statement," he said.

McCurry told reporters President Clinton hasn't made immediate plans to speak to Yeltsin but that the president may send a message to the Russian president soon.

"We will be, of course, watching and monitoring the developments closely," he added.

Yeltsin said initially he would take over temporarily as prime minister from pro-reform Viktor Chernomyrdin. He later signed a decree appointing young Fuel and Energy Minister Sergei Kiriyenko as his acting premier.

The moves seemed to open up Russia's presidential race. Chernomyrdin has been widely seen as Yeltsin's chosen successor but has now had his main power base removed two years before the election. He was given the job of organizing next year's parliamentary election and the presidential vote the year after.

Yeltsin said the government had failed to carry out some key tasks and many ordinary Russians had not felt the benefits of more than five years of market reforms.

"The current cabinet team ... unfortunately could not cope with a number of key questions," Yeltsin said. "Many people do not feel the changes for the better."

Millions of workers in the state sector have not been paid for months and have endured hardships under the reforms. Yeltsin has increasingly expressed disappointment in the last few months.

Russian shares opened on average more than three percent lower than Friday's close but traders said the market had later been cheered by the nomination of Kiriyenko, a reform-minded technocrat who has been in the government since November.

In an immediate response to Yeltsin's move, Russia postponed the issue of a eurobond denominated in German marks, which was to have been its first international borrowing on capital market this year.

Yeltsin's announcement heralded his return to the Kremlin after a week's absence with a respiratory infection. Presidential spokesman Sergei Yastrzhembsky said Yeltsin's health was "superb."

The president, who had heart surgery in 1996 and often has long spells away from his desk ecause of ill health, had returned to the Kremlin for three hours on Friday. The government's removal was clearly intended to reassert his authority.

The dismissal of the whole government is a formality when a prime minister is removed and some ministers are likely to keep their posts when the new line-up is announced. Technically, Chernomyrdin resigned but there was little doubt he was pushed.

©1998 CBS Worldwide Corp. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Reuters contributed to this report