Summary: The EU's evolving "comprehensive policy towards Russia" is benefiting from the intensive and extensive work by the Council of Ministers and the European Commission over recent weeks, and now has a new tone of muscular assurance. Political stability - "at least for the time being" - has been largely restored by the appointment of Yevgeni Primakov as Prime Minister, says the latest version, presented to the European Council in Vienna. But, it goes on, the new "broadly-based" Government "has been slow to develop a coherent economic programme to meet the crisis and has increasingly laid the blame for the crisis on others". The policy document is starting to develop some clearer thinking on EU instruments for assistance, and on who should do what.

The EU aim is to develop a policy that goes beyond the response to the Russian crisis. But the EU work is nonetheless much more than empty rhetoric and abstract vision, and remains anchored firmly in current reality. Thus it conducts a precise assessment of Russia's immediate situation and foreseeable future, and pulls no punches. And it lists areas where there is scope for useful intervention by the EU and by other actors. The diagnosis. "There is no certainty that the 1999 Budget... will be adopted before the middle of next year", says the report. Russia's economic crisis has deepened, particularly affecting the most vulnerable and "the nascent middle class" - although the "mass social and political unrest which many predicted in August has not materialised". The objectives of the measures published by the Russian Government on November 17 seem "mutually contradictory", and "lack any real figures or estimates" - amounting to a general descriptive framework rather than a Government action plan. The analysis dispassionately notes the causes of the crisis: "the lack of a rule of law or effective institutions, and deadlock between Government and Duma which paralysed reform efforts", a budget deficit "deriving from excessive expenditure and the failure to collect sufficient taxes, the lack of real structural reform (...) and the absence of effective supervision (...) in the banking sector". And it observes, among the effects, "a weakening of central state...

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