 On December 25, 1991 the Supreme Soviet ratified the official name of the Russian state - the Russian Federation. Having received full authority, the Russian government from the first days of 1992 began to realize economic reforms. On January 2 the liberalization of prices was declared, which under conditions of monopolistic character of economy and goods shortage resulted in rapid prices increase and depreciation of money on enterprises' bank accounts and bank deposits of the population with the State Savings Bank.
Accelerated privatization of state ownership began practically at the same time, in many cases it was not supported by necessary legislation. The privatization did not reanimate industrial production, but, on the contrary, caused curtailing of entire industries, gave birth to such phenomena as corruption, outflow of capitals abroad and other abuses. Financial dependence of the country on international financial organizations and most developed countries of the West became more acute. Resentment at economic and social policy of the government resulted in change of government leadership. In December E.T. Gaidar's place (who was acting as the head of the government) was taken by V.S. Chernomyrdin, whose candidacy was ratified to be the chairman of Council of Ministers.
Deepening economic crisis, different understanding of purposes and tasks of reforms, disagreement in question of future form of Russian state system resulted in sharp opposition of legislative (Congress of People's Deputies and the Supreme Soviet) and executive (the President and the government) branches of authority, which reached its peak during September-October crisis of 1993, which began after proclamation (on September 21) of the decree by president Yeltsin on dissolution of Congress of People's Deputies and the Supreme Soviet and realization of constitutional reform. The crisis, having developed into the armed confrontation between the supporters of the Supreme Soviet and army, loyal to the president, ended in shelling of the building of the Supreme Soviet (on October 4) and subsequent arrest of leaders of anti-presidential opposition. The liquidation in Russia of Soviets's system has been the result of that crisis.
Starting from the end of 1991 the Chechen crisis, caused by the unilateral decision of government of the Chechen Republic to proclaim independence of the republic, acquired a sharp character. In December 1994, on order of the president of the Russian Federation Yeltsin, federal armed forces entered the territory of the Chechen republic (the official purpose - "restoration of constitutional order"). Planned as a short-term operation on suppression of separatists, placement of armed forces in the Chechen republic has turned into a long war between the federal power and supporters of the Chechen independence. Military actions in the Chechen Republic took away thousands of human lives and did a huge material damage to the republic. The war was stopped only in August 1996 by signing of the peace agreement between the Russian Federation and the Chechen Republic; the question of the status of the Chechen republic was deferred till December 31, 2001.
The foreign policy of the Russian Federation was characterized by aspiration to develop partner relations with countries of "near" (former republics of the USSR) and "distant" foreign countries. A number of multilateral and bilateral agreements (with USA, Germany, France and other countries), answering current and long-term interests of Russia (the agreement on cooperation with the NATO, a number of agreements in the field of disarmament etc.) were signed. Russia was accepted into the Council of Europe, participation of the Russian president in the meetings of "the Big Seven" became traditional. The Russian Federation inherited USSR's place in the Security Council of the United Nations. However, the change of geopolitical situation connected with disintegration of the USSR objectively led to narrowing of the role of Russia on international arena; this tendency was aggravated by reduction of economic and military potential of Russia, mistakes and miscalculations of Russian diplomacy, which was especially characteristic of its activity in the first half of the 90s.
Inability of the government to offer a way out of economic stalemate caused strengthening of social instability in the country, which was manifested in various forms of protest (strikes, meetings, demonstrations, hunger-strikes etc.), and growth of opposition moods, that, in particular, was expressed in results of parliamentary elections of 1995 which brought convincing victory to opposition parties. The first place at the elections took the Communist Party of the Russian Federation; the second place won LDPR; pro-government movement "Our home - Russia" (leader - Chernomyrdin) appeared on the third place. At presidential elections of 1996 Yeltsin became the winner, he defeated Zyuganov, the leader of left opposition, in the second round. Results of elections of 1995 and 1996 revealed two opposite tendencies - aspiration of significant number of voters to continuation of reforms and disagreement with those methods (so-called 'shock therapy' etc.), by which these reforms were carried out.
1998 was marked by a sharp political and financial crisis. In March Chernomyrdin's government resigned. The result of activity of S.V. Kiriyenko's cabinet, which came in stead, was the actual devaluation of rouble (August 1998), which caused a new spiral of inflation and rise in prices.
In August 1999 by decree of the President of the Russian Federation B.N. Yeltsin, V.V. Putin, who had occupied a number of crucial posts in previous cabinets, was appointed the head of the government. In the same month the Ch echen insurgents crossed the border of neighboring Ingushetia and seized Ingush villages Sabanmakhi and Karamakhi. On decision of the government of the Russian Federation, military units of the Ministry of Defense and the Ministry of Internal Affairs were sent there, they were to drive the insurgents out of the seized territory. Those military actions were the beginning of the Second Chechen War.
On December 31, 1999. B.N. Yeltsin declared his resignation not waiting for the termination of allocated to him by the Constitution presidential term and transferred the supreme authority in the country to V.V. Putin, who became acting president of the Russian Federation till new presidential elections. Presidential elections, which were held on March 26, 2000 made V.V. Putin, who got more than 52 % of voices, the President of the country. In May 2000 V.V. Putin was officially inaugurated as the President of the Russian Federation. M.M. Kasyanov was entrusted with formation of a new cabinet.
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