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Western Press Review: Confidence In Clinton And Russia Is Waning

By Elizabeth Weinstein and Ron Synovitz

Prague, 29 July 1998 (RFE/RL) -- Western press today focuses on the announcement yesterday that former White House intern Monica Lewinsky will testify in a grand jury investigation of President Bill Clinton in exchange for immunity. The press makes comparisons to other former White House scandals like Watergate, and speculates on how they will affect Clinton's presidential legacy. Meanwhile, the continuing decline of Russia's financial markets also fuels western press analyses and commentaries.

DIE WELT: Starr now has a problem

An opinion piece by Manfred Rowold in the German newspaper Die Welt says Monica Lewinsky's agreement to testify about her alleged sexual relationship with U.S. President Bill Clinton doesn't get to the heart of the investigation. Rowold says yesterday's developments do not further Special Prosecutor Kenneth Starr's investigation into whether Clinton committed a crime by lying under oath. Rowold writes: "Under oath Clinton denied a sexual relationship with Lewinsky, as he did in the Paula Jones case. Starr now has a problem. Apparently he is far less interested in the intimate details of the sexual relationship and much more concerned with whether Clinton knowingly hindered his investigations."

"However, the goings-on in the White House do not seem enough for Congress to impeach a politically very successful president. Feelings could well change if Clinton is proved to have broken the law. Lewinsky seems to have done Starr only half a favor. Especially when one considers that he has been trying to nail Clinton for the last four years and has a witness who is not very credible."

WALL STREET JOURNAL: The arguments now are strictly about accountability

An editorial in today's Wall Street Journal Europe says President Clinton's credibility is waning. The editorial says Starr's investigation is coming to a point where the White House can no longer "spin" the events away from the president. It says: "The truth is, Bill Clinton has finally spun himself into a place where spin does not exist. It is beginning to dawn on the political community that Mr. Starr's subpoena to the president --indeed the whole of his clash with the presidency-- has risen to a realm of unavoidably austere issues of constitutionality and the rule of the law."

The editorial continues to say that ultimately Clinton's own party members may lose faith in him. It concludes: "Our reading of these events is that the Democratic Party elders have begun to see what the White House may never see -- that what worked till now has become, all of a sudden, indefensible. The president may choose again to order his lawyers to further fight, litigate and delay the Independent Counsel's subpoena. It is not so clear what he might order his spinners to do about resulting court rebuffs stretching from here to November. The arguments now are strictly about accountability in the courts and at the polls."

GLOBE AND MAIL: There's a destructive abuse of power going on here

An editorial from Canada's The Globe And Mail says Starr has gone "off the rails" with his investigation of the president. The editorial says the real culprit is Starr himself, who's wasting taxpayer's dollars investigating a "legal sexual dalliance."

It says: "The office of independent prosecutor was created in the wake of Watergate, to diminish an imperial presidency that acted above the law. A generation later, thanks to the special prosecutor, the United States has a presidency monitored daily by a microscope with a sharp stiletto eye. The independent prosecutor was supposed to be check on presidential abuses, called on only when specific and major wrongdoing was discovered. It has turned into a well staffed, deep-pocketed institution whose only job is that of nailing the President to the wall for something, anything."

The editorial continues by pointing out Starr's investigations of Clinton's 1980s Arkansas real estate deals, his alleged affair with Paula Jones and the latest scandal involving Lewinsky have all failed to produce any solid charges against Clinton.

It concludes with a biting criticism of Starr: "Not even the President's enemies argue that this is a new Watergate. But in one way it is: There's a destructive abuse of power going on here, and unwillingness to respect the institutions and rules that form the basis of the United States' order and prosperity. Only this time the culprit doesn't live in the White House." The Times of London also mentions Watergate in an editorial about the Lewinsky scandal. It says that despite Starr's foundering investigation, small victories like yesterday's move against the president will have a profound impact on Clinton's reputation when he leaves the White House.

It says: "At the outset of this scandal the obvious comparisons were with Watergate and the Iran-Contra fiasco. The Lewinsky affair will probably fall between the two. Ronald Reagan's managerial methods were severely criticized as a result of Iran-Contra, but his reputation for personal integrity remained intact. The affair only partly damaged his political legacy. President Nixon was brought down by what he described as a "third-rate burglary." His reputation, despite intense efforts, never fully recovered. Mr. Clinton will almost certainly remain in the White House until January 2001. Mr. Starr and his grand jury will largely determine whether he then departs Washington with dignity or in disgrace."

Meanwhile, a steady decline of Russia's financial markets during the past week has led to pessimistic forecasts from western newspapers and financial analysts. The decline comes despite the announcement two weeks ago of a $22.6 billion bailout package led by the International Monetary Fund (IMF).

FINANCIAL TIMES: Yeltsin needs to make renewed efforts to get the Duma back on his side

The Financial Times of London warns in an editorial today that "investors will be all too quick to flee" the Russian market if the Duma continues to delay passage of reforms promised by the Kremlin and demanded by the IMF as a precondition for further loan disbursements. The editorial says: "Only if Russia is seen to be capable of taking the action needed to restructure its fiscal position will investor confidence return and the markets finally stabilize."

The Financial Times says that this week's market plunge in Moscow "is hardly surprising," despite the bailout loans. The editorial says: "Russia can withstand some market jitters" because of the bolstering of the central bank's foreign exchange reserves by IMF money. "The crucial question is how long the turbulence will last. And this will be determined by the government's success in delivering on its fiscal promises."

The Financial Times goes on to explain that "the fear of a ruble devaluation in the weeks leading up to the IMF deal led many investors to abandon the market. But the supply of foreign-currency debt has soared, thanks to the large-scale conversion of domestic treasury bills into foreign-currency bonds, and to new debt issues." The editorial concludes that "meeting the IMF's stringent fiscal targets (for future loan disbursements) will require tough action, and Mr Yeltsin needs all the support he can get. He needs to make renewed efforts to get the Duma back on his side."

BLOOMBERG BUSINESS NEWS: Investors lack confidence in Russia's economy

Bloomberg Business News has issued a series of pieces today analyzing the fall of Russian stocks in the last week, the cancellation of government bond auctions today, and moves by the Central Bank to widening the ruble's daily trading band.

Bloomberg's Moscow correspondent Natalia Olynec predicts further declines of Russian stocks -- which already have fallen to the levels seen shortly before the IMF-led bailout package was announced.

Olynec quotes traders as saying that investors are unlikely to buy up Russian shares or bonds until they see "the fruits of the government's austerity plan." She says that if Russia fails to secure the next IMF disbursement later this year, then the markets will pass into what a Baring Asset Management investment director in London describes as "a period of intense uncertainty."

In another Bloomberg analysis piece today, Olynec and Sabrina Tavernise say the cancellation of today's debt auction after Moscow's borrowing costs climbed above 80 percent shows that investors are increasingly reluctant to buy ruble-denominated bonds.

The writers note that "Russia has failed in the past two months to raise enough at its weekly bond auctions to cover more than $1 billion in maturing debt." The Kremlin had planned to sell two new securities today to help meet those payments. Instead, the Bloomberg correspondents explain, "the government now says it will use budget funds, borrow internationally and sell longer-term ruble-denominated bonds to pay off the maturing debt." Olynec and Tavernise conclude that sales of ruble denominated bonds are "unlikely to rise until tangible results of the Kremlin's austerity program are seen." They quote Sergei Babayan, of the Troika Dialog brokerage in Moscow, as saying: "Investors are absolutely not confident Russia can have a normal economy, economic growth or an increase in tax collection. People understand the IMF loan won't immediately solve Russia's problems. We don't see any real results yet."

Tavernise and Bloomberg correspondent Laura Zelenko write today that the widening of the ruble's trading band could conserve Russia's foreign exchange reserves by allowing the ruble "to depreciate more swiftly without the bank being forced to buy dollars to brake its fall." They say that "letting the ruble depreciate faster could give a boost to exports." But they say this is not so important in the broad scheme because "many of Russia's biggest foreign-exchange earners are commodities such as oil that are priced in dollars and whose competitiveness isn't greatly affected by the ruble's value."

Tavernise and Zelenko quote financial experts who say that "a slight widening of the trading band doesn't alter the government's commitment to avoid a ruble devaluation."