Russian Government To Nationalize (Sovietize) Largest Private Bank
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 parliament.
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 Sberbank.
"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 news agency.
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 news agencies.
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.