MOSCOW AND ST. PETERSBURG JOIN FORCES.

Moscow mayor Yuri Luzhkov visited St. Petersburg June 27 to meet his counterpart, newly elected governor Vladimir Yakovlev. Both men are seen as pragmatic, hands-on managers. Luzhkov strongly supported Yakovlev’s election challenge to incumbent Anatoly Sobchak in May. During last week’s visit, Luzhkov and Yakovlev signed an agreement on cooperation between the two cities. They agreed to establish close economic links and jointly to lobby the central government in defense of their cities’ interests. (Segodnya, June 28) Analysts interpret this alliance of Russia’s "two strongest economic systems" as a bid to reduce the share of their tax revenues that goes to the federal budget, both leaders having expressed dissatisfaction with the present set-up. The strength of the two cities stems from their economic success (relatively high personal real incomes by Russian standards, strong development of new business, high foreign investment), from the legitimacy the two leaders have recently won at the ballot box, and from the fact that the majorities that Boris Yeltsin won in the second round in the two cities combined made up about half of his overall majority. Sobchak had warned that Luzhkov’s support for Yakovlev presaged an attempt by Moscow to assert control over Petersburg. Luzhkov did indeed travel in the company of a group of Moscow bankers and said he was determined "to stimulate the development of the banking sphere in Petersburg." His statement appears provocative in view of the existence of several strong Petersburg-based banks. Locally-based banks in Petersburg, as elsewhere, are leery of the influence of Moscow and want to protect their business from incursions by big Moscow-based banks.

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