Yeltsin claimed on several occasions that the emergency had passed, even as he spoke more frankly with his subordinates. On August 13 the Financial Times of London printed a letter from U.S. financier George Soros about Russia being at “the terminal phase” of a “meltdown” of its financial markets. He recommended a prompt devaluation of 15 to 25 percent and turning over management of the ruble to an expert currency board. At the request of Kiriyenko, his economic team, and Valentin Yumashev, Yeltsin made one last demurral. On August 14, in Novgorod, he stated “firmly and concisely” that there would be no devaluation. Kiriyenko, Yumashev, Chubais, and Dubinin (accompanied by Yegor Gaidar) went to Zavidovo two days later to tell him the game was up. Yeltsin concurred and, as was typical of his style, asked them to spare him the fine print. “The head of government started describing the details, but I stopped him. Even without them, it was clear that the government, and all of us along with it, had become hostages to fate. . . . ‘Go ahead,’ I said. ‘Do take emergency measures.’”28
On August 17 Russia let the exchange rate float, defaulted on its treasury bills and bonds, and imposed a ninety-day moratorium on payments to foreign creditors. In two frantic weeks, the ruble lost half of its exchange value, going from 6.3 to the U.S. dollar to 9.3; it was to plummet to 21 to the dollar by September 21. GKOs were reduced to all but worthless scraps of paper. The three-month moratorium favored Russians over foreigners without keeping hundreds of the banks from going under in a triage process that stretched into 1999. Citizens queued at tellers’ windows to withdraw their deposits. Prognoses of economic and social breakdown swamped the domestic and world media.29
Political change came inexorably in the wake of the financial bulletins. The alternatives facing Yeltsin, as one writer put it in September, were “the bad, the atrocious, and the bloodcurdling.”30 The leftist and nationalist majority in the Duma, and especially the far-left communists, were out for nothing less than the president’s head. On August 21 the house met and passed a nonbinding resolution calling on him to step down, with 248 votes for and just thirty-two against. Opinion makers had been scoping out an abdication in earnest since early summer, some pitching ideas for institutional innovations that might grease the skids. In an essay in Nezavisimaya gazeta on July 10, the sagacious Vitalii Tret’yakov pointed the finger at Yeltsin and his loyalists for following an “ostrich policy.” Without a change of course, Russia was in for popular insurrection, a coup d’état, or civil war; if the last were to break out, the country would come under foreign military occupation, since the world could not abide the breakup of a former superpower with a nuclear arsenal and ten atomic power stations. To stave off a cataclysm, Russia, he said, needed to hold special legislative and presidential elections within three months. The Federal Assembly should establish a Provisional State Council consisting of main ministers, parliamentary leaders, party heads, and representatives of Russia’s macroregions and trade unions. Yeltsin was to be barred from chairing the council and to be a member only if he consented in writing not to stand for another term in the extraordinary election for president. To head the council, Tret’yakov suggested Foreign Minister Yevgenii Primakov; he also recommended that Viktor Chernomyrdin be returned as the caretaker prime minister for the interregnum.31
Tret’yakov was right in the presentiment that there would be a shakeup and that Chernomyrdin and Primakov would be players in it. The Provisional State Council, though, was too contorted an idea to fly.32 And Tret’yakov miscalculated about the president. Yeltsin did not consider renouncing power in 1998, to a Supreme Council or anybody else, despite repeated testimony in the press that he was on the verge of doing so.33
