- MOSCOW (AP) -- The Russia government said Tuesday it will take over
the country's largest private savings bank and proposed other Soviet-style
measures while huddled in a closed session with the Communist-dominated
- Meanwhile, hoping to stave off hunger
for ordinary Russians amid the country's worst economic crisis since the
Soviet collapse, the government announced a tentative agreement on food
aid with the European Union on Tuesday -- just days after a similar deal
was reached with the United States.
- Russia's government has indicated it
may nationalize the country's largest commercial banks, many of which are
suffering acutely from Russia's financial collapse, insisting that it would
save them from failure.
- Critics have warned the move will only
bring more debts for the government -- which already has defaulted on some
of its obligations and is seeking to reschedule the rest.
- But Deputy Prime Minister Gennady Kulik
said Tuesday the government will acquire a controlling interest in the
bank SBS-Agro before the end of the year. The move would mean a nationalization
of the bank, which has the second-largest retail network after state-controlled
- "Returning control of the bank to
the state is in line with our principles of building a financial system
in the agricultural sector," Kulik was quoted as saying by the Interfax
- SBS-Agro handled many of the loans and
money transfers from the government to Russia's impoverished farms before
it was shaken by the economic crisis.
- Meanwhile, Prime Minister Yevgeny Primakov
rounded up several of his top cabinet ministers and headed to parliament
Tuesday in a bid to win support for his economic recovery program.
- The session at parliament was closed
and few details were available. But centrist parliamentary leader Alexander
Shokhin said the discussion revolved around centralized-economy plans proposed
by first deputy prime minister Yuri Maslyukov for next year.
- Russia's economic crisis, combined with
drought and falling food imports, has raised concerns about the country's
food supplies heading into the winter. No serious shortages have been reported,
but the government wants to ensure that plenty of food is on hand.
- Under the deal with the European Union,
Russia would purchase $480 million worth of food and receive EU humanitarian
aid worth $12 million to $14 million, Kulik said, according to Russian
- Russia also has signed a $625 million
agreement with the United States for 3.1 million tonnes of U.S. food aid,
including wheat, corn, pork and beef.