Widespread Monetary Plot to Oust Gorbachev Alleged : Soviets: Prime minister says coup was foiled. Skeptics see story as justification for unpopular currency seizure.
The Soviet Union’s new prime minister alleged Tuesday that his government had foiled a devilish multinational scheme to oust President Mikhail S. Gorbachev with an economic coup.
“Someone simply decided that President Gorbachev became a nuisance and had to be removed,” Prime Minister Valentin S. Pavlov told the trade union newspaper Trud in an interview that seemed to come straight from the pages of a spy novel. “Soviet banks and several private banks in Austria, Switzerland and Canada have all been involved in this.”
Pavlov, 53, who was finance minister before being appointed prime minister by Gorbachev last month, said that huge amounts of Soviet money in large bills were being held in foreign banks, ready to be injected into the Soviet economy to cause massive inflation and economic ruin.
“There is nothing original about that plan,” Pavlov said. “Such operations were conducted in many regions of the world when someone wanted to change the political system or overthrow unwanted political leaders.”
But the coup attempt was prevented just in time by Gorbachev’s highly unpopular decree three weeks ago withdrawing from circulation all 50- and 100-ruble notes, Pavlov said.
“I can assure you that not only days but even hours were important in that matter,” Pavlov said with a melodramatic flare that he maintained throughout the interview, which covered almost a page of Trud. “We had to keep everything secret and act as best we could. History will judge us.”
However, Vitaly N. Ignatenko, Gorbachev’s press secretary, laughed off Pavlov’s assertions. “Our money is not capable of changing a political system,” he told correspondents, joking both about the worthlessness of the Soviet ruble and Pavlov’s interview.
Viktor Grushko, the new first deputy chairman of the KGB, the Soviet intelligence and security agency, said that he knew “absolutely nothing” about Pavlov’s plot. “I’ll have to read Trud,” Grushko said at a press conference on “economic sabotage.”
“There are indeed great amounts of Soviet money and monetary documents abroad, and they could be used to sabotage our economy,” Grushko said. “But we have heard nothing about this.”
Pavlov, who has a doctorate in economics, came to the premiership last month with a reputation as a competent government planner, sober and often boring, whose original instincts for radical economic reform were tempered as he rose in the Kremlin hierarchy.
Gorbachev nominated him for the post, succeeding Nikolai I. Ryzhkov, who retired after suffering a heart attack in December, and praised him as the prime minister who would put together the restructured Soviet government and press ahead with the reforms of perestroika .
None of Pavlov’s calls for fiscal discipline, price reform and reduced subsidies over the last month prepared people for his bombshell Tuesday.
The claims, published on the front page of Trud, which has a circulation of more than 18 million, quickly became the talk of the country--especially after liberal radio announcers mischievously included extended excerpts in their reviews of the daily press.
“What can you make of it, what can anyone make of it?” a prominent economic commentator remarked. “It seems to come from the pages of a thriller, not from the minutes of a Cabinet meeting . . . .
“The most one can say is that he is desperate to defend his decision to withdraw the large-denomination notes from circulation, and he has elevated speculation to reality.”
Pavlov, whose spokesman could not be reached for comment Tuesday afternoon, had told Trud that he could disclose only a few elements of the conspiracy.
When asked why foreign banks would have so many rubles, which have declining value inside the Soviet Union and virtually none abroad, Pavlov replied: “I cannot speak about this or many other things yet because the financial war declared on us is continuing. And war is war.
“You can’t tell your enemy everything you know about him,” the prime minister continued. “The only thing I can tell you is that we know about an attempt at buying and reselling billions of Soviet rubles through Germany to Switzerland and through Hungary to Luxembourg and the Netherlands.
“Incidentally, this is the difference between me and some of my opponents. They may raise a hue and cry, slander me, mislead the public and use the tone that is not accepted in polite society. But I must keep mum. Noblesse oblige.”
Pavlov, a tax collector who rose to become finance minister, went so far as to hint that the failed plot was somehow “related to the events in Iraq.”
He suggested also that “ultraradicals” in the various sovereignty-seeking republics would be interested in the coup because it would make it easier for them to introduce their own currencies.
Pavlov, who is an opponent of private property and land reform in the Soviet Union, said, “In the event of a financial catastrophe, power might have been taken by advocates of instant privatization. Taking into consideration the spiraling inflation, they would have privatized property so that this country would have been sold out for next to nothing. Moreover, we might have lost our economic independence and fallen victim to creeping, bloodless annexation.”
In an attempt to pacify public fears that more sweeping monetary reforms are planned, Pavlov said that his government would seek to foil future plots against its economy by making the ruble “partially convertible” to foreign currencies.
“In doing this, we shall not impose any social restrictions, and everybody will have access to these convertible rubles,” he said. Pavlov specified that only limited sums would be exchanged, but he said that he could not specify when the leap to a convertible ruble would be made.
“If only we could tone down political confrontation just for a few months, ensure civil peace and tranquillity, people would have the ruble they could use to buy goods and go on trips abroad,” Pavlov said. “I mean all people, not the few owners of the few greenbacks.”
Pavlov cautioned that the Soviet Union is doomed if the disintegration of industry and agriculture is not halted.
“If we fail to curb this disorganization, the slump will be so great by March that society will be on the brink of complete destruction,” Pavlov said. “We really want to introduce a sweeping economic reform--if only political squabbles threatening to degenerate into all-out feuds do not prevent us from it.”
Pavlov only vaguely indicated what types of reforms would be made. He stressed that production would be de-monopolized and “healthy entrepreneurship” would be encouraged.
He hinted also that there would be greater regulation of foreigners doing business in the Soviet Union.
“The country is flooded by all sorts of middlemen, buyers and hackers who are using the incompetence, blissful innocence or sometimes the complicity of old and new bureaucrats in the governmental structures in all echelons to derive huge profits,” Pavlov said.
“Our entrepreneurs should not deal with these outcasts who are dashing to the Soviet Union after losing all credence in their countries to make a fortune in this ‘brave new world.’ ”
However, some well-known foreign businesses will still be welcome here. “We are prepared to admit Western capital here,” he said, “but on the condition that this country will benefit from it as well.”
In a return to Marxist-Leninist rhetoric, Pavlov said that the time has come for every Soviet citizen to make sacrifices.
“Our country is on the critical mark behind which there is nothing but an abyss,” he said. “The people must abandon their petty interests and vanity and pool their efforts in attaining the prime aim--to save the country, to start energetically extricating ourselves from the crisis.”
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