KREMLIN REPORTEDLY SET TO PUT FINANCIAL SQUEEZE ON MOSCOW.

There is growing speculation that President Boris Yeltsin’s inner circle, having secured the ouster of Yevgeny Primakov as prime minister and gained control of key government posts and financial flows, is turning its attention toward removing a key obstacle to consolidating its power–Moscow Mayor Yuri Luzhkov.

According to an account published this week, the Kremlin has set itself the task of “destroying” both Luzhkov, as mayor and politician, and his political movement Fatherland (Otechestvo). The report notes that Moscow is currently quite vulnerable economically, given its dire financial straits and reported proximity to default. Thus the Kremlin can, first of all, use a host of financial levers against Luzhkov, such as cutting off federal subsidies to the capital, toughening federal demands for tax remittances, ceasing to give the Moscow city government federal shares in state-run enterprises and reregistering large federal entities outside the capital to rob it of tax revenues. The goal of such actions would be to undermine Luzhkov’s image as a “khozyaistvennik”–a leader who knows how to get things done and make things work.

In addition, President Boris Yeltsin reportedly warned Tatarstan President Mintimer Shamiev, who recently formed the electoral bloc All Russia (Vsya Rossiya), not to join forces with Luzhkov’s Fatherland in December’s parliamentary contest. Meanwhile, the Moscow mayor is increasingly isolated from the federal authorities: His main ally in the cabinet, Georgy Boos, was recently replaced as tax chief by Aleksandr Pochinok, a Chubais ally, and the one Kremlin administration official who reportedly advocated cooperation with Luzhkov, Oleg Sysuev, has also been forced out (Vlast, June 1).

Another apparent prong in the Kremlin’s anti-Luzhkov strategy involves former Prime Minister Sergei Kirienko. Earlier this month, Kirienko, who has formed his own political movement, New Force (Novaya Sila), strongly criticized the Moscow city authorities for their plans to move the mayoral contest from June 2000- -when they are to take place simultaneously with the presidential elections–to December of this year, to coincide with the federal parliamentary vote. The Moscow City Duma has introduced a bill to move up the mayoral contest, with the presumed goal of making it easier for Luzhkov to concentrate on the presidential race and to ensure that he will continue as mayor if his presidential bid fails.

Kirienko recently said that New Force would put up a candidate to run against Luzhkov, but would neither confirm nor deny that he might be that candidate. The goal of a Kirienko race against Luzhkov, who was re- elected mayor in 1996 in a massive landslide, would not be victory. That would be highly unlikely. It would instead be to shrink Luzhkov’s margin of victory, thereby damaging his image in the walk-up to next year’s presidential vote. Several publications have reported that Kirienko’s moves against Luzhkov are being orchestrated by the Kremlin (Vlast, June 1; Moskovsky komsomolets, June 2).

Earlier this week, Valery Shantsev, Moscow’s vice mayor, struck back at Kirienko, charging that he did not know the capital well (Kirienko has been registered as a Moscow resident for about one year), and defending moving up the mayoral elections as being fully legal and “in the interests of Muscovites” (Russian agencies, May 31).

FRESH TALKS WITH MILOSEVIC DELAYED.