Prime Minister Kiriyenko prepares rescue plan

In this story:

• Unpaid workers protest
• 'No time left'
• The plan: Cut spending, increase tax collection
• IMF, Russian tangle on loan terms
• Related stories and sites

MOSCOW (CNN) -- President Boris Yeltsin said Tuesday that the financial situation in Russia "remains alarming" and that "radical measures" and a national consensus are needed to restore order. Prime Minister Sergei Kiriyenko said that on Wednesday he would present parliament's lower house, the Duma, with a plan to rescue Russia's economy from a deepening crisis and defend it from adverse world markets.

Both men addressed a rare joint meeting of parliament members and government Cabinet ministers in Moscow.

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"The economic crisis has become so acute that there are social and political dangers," Yeltsin said as he opened the session prompted in part by this week's urgent negotiations with the International Monetary Fund. "The price of foot-dragging and delays, squabbling and discord, is too high," the president said.

Unpaid workers protest

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The meeting came three months to the day since Yeltsin fired the government of Premier Viktor Chernomyrdin, saying it had failed to improve Russia's economy and living conditions.

Since then, the Russian economy has been battered even further by a slide in world oil prices, the financial crisis in Asia, and scattered workers' protests, including the blockage of major rail lines last month.

In a reminder of the problems the government faces, unpaid miners, energy workers and others briefly blocked a railway and road in the Pacific port city of Vladivostok on Tuesday.

Unpaid miners in Vladivostok protest by blocking a railway line

Workers from a nuclear submarine-building plant set up a tent city near the local administration's offices to press wage demands.

They carried red banners declaring "Government -- stop living off our money" and "Yeltsin -- quit!"

'No time left'

Yeltsin said that the laws needed to set Kiriyenko's emergency economic program in motion should be passed before the parliament breaks for the summer.

"We don't have more time left, there is no other way," he said, hinting that if parliament fails to act, he will push through the reforms by decree. "Other measures will be taken," he said.

Yeltsin called on Russia's parties, national and regional leaders, trade unions and entrepreneurs to unite in the name of the national interest.

Kiriyenko set out -- for at least the fourth time -- the state of Russia's economy and his plan for battling the country's financial crunch.

Speaking after Yeltsin, he presented his economic rescue plan. Russia faces "a clear threat of a new, dangerous debt crisis," the prime minister said, noting that the share of Russia's gross domestic product going to pay the national debt has grown to 44 percent.

Already this year, 34 percent of the nation's budget has gone to pay debt interest, he said.

And, as of June 1, the government owed 66.9 billion rubles ($10.8 billion U.S.) in back wages, Kiriyenko said.

The plan: Cut spending, increase tax collection

Broadly speaking, Kiriyenko's plan comprises deep spending cuts and sharply increased tax collection. It calls for:

• Budget revenues to exceed spending by 2 percent of the nation's gross domestic product.

• Reducing spending by up to 42 billion rubles ($ 6.8 billion U.S.) a year.

The plan also includes:

• Government support for Russian exports.

• Debt rescheduling for industry.

• Shifting the tax burden to consumers instead of producers.

• Lowering interest rates from 25 percent to 20 percent, so that companies can afford them.

Other measures include centralizing tax collection, reducing the number of customs posts and creating a state company to oversee the production of -- and revenues from -- liquor.

IMF, Russia tangle on loan terms

An IMF team arrived in Moscow on Monday night to negotiate terms for the release of the latest, $670 million installment of an existing loan to Russia, and conditions for the $10 billion to $15 billion bailout Russia is seeking.

Both the fund and Russian officials have adopted hard stances. The IMF last week said it was delaying the loan installment to Russia because the government needs to take further steps to comply with conditions for receiving the money.

The fund's demand that the government undertake land reform, allowing for private ownership and unfettered sales of arable land, has met vocal opposition from the hard-line lower chamber of parliament. It's doubtful the government could overcome that resistance.

A bigger question mark hovers over the fund's demand that Russia split up its huge energy monopolies. Russia has so far resisted.

As Russian leaders negotiate with the IMF, there was a "high" chance that the ruble would be devalued, said Gennady Seleznyov, the Duma's Communist chairman, who predicted the government could fall.

Both Yeltsin and Kiriyenko have denied plans to devalue the currency.

Moscow Bureau Chief Jill Dougherty, The Associated Press and Reuters contributed to this report.