Russia’s finance chief balks at role in Putin’s new team

Russia’s long-serving finance minister balked yesterday at the idea of serving in a new government formed under a plan that would return Vladimir Putin to the Kremlin in March.

Alexei Kudrin was the second top economic official to break ranks with Mr Putin’s decision to seek a historic third presidential mandate – an idea revealed to the nation on Saturday after months of intrigue and speculation.

Finance Minister Alexei Kudrin is the last surviving remnant in the Russian government from the days of post-Soviet liberal reform.

The longest-serving finance minister of any major world power, Mr Kudrin has occupied his post since the first months of Vladimir Putin’s presidency in 2000 and guided the economy through cycles of growth and recession. Mr Kudrin has won international plaudits for keeping a stable ruble and cannily building up sovereign wealth funds that protected Russia from a repeat of its 1998 financial meltdown when global economic crisis struck in 2008.

But now his decade-long grip on Russia’s top public finance post appears to be nearing an end after he refused to serve in a government headed by current President Medvedev.

“I do not see myself in the new government. It’s not just that nobody offered me anything. I think that the differences that I have will not allow me to be in this government,” Russian news agencies quoted Mr Kudrin as saying.

The plan would see Mr Putin swap his Prime Minister’s post with President Dmitry Medvedev – who took over the Kremlin in 2008 – and run for up to two more terms in office that could extend his brand of strongman rule until 2024.

Mr Medvedev would in turn get the reward of leading the ruling United Russia party in December parliamentary elections and then forming a new government as Premier next year.

The presidential incumbent has promoted a modernising agenda throughout his three years in power and promised on Saturday to create a new Cabinet full of energetic people thirsting for positive change.

But Mr Medvedev’s words had little effect on Mr Kudrin – a hawk revered by Western investors for his decision to save much of Russia’s vast oil revenues in an rainy-day fund that came in especially useful during the 2008 economic crisis.

The idea of former KGB agent Mr Putin returning to power also drew about 300 people from the marginalised liberal opposition to a Moscow rally just a few blocks from the Kremlin.

“Putin Must Go!” and “Your Elections are a Farce!” read some of the banners.

Mr Kudrin had sounded alarm about earlier Kremlin plans to achieve growth through broader spending and said flatly while on a visit to Washington that he “unconditionally refused” to work under Mr Medvedev’s new government.

Mr Medvedev’s top economic adviser Arkady Dvorkovich also expressed alarm at the job swap idea.

“There is no cause for joy,” said Dvorkovich, after having urged the president to stand for a second term. “It’s a good time to switch over to a sports channel,” he wrote on Twitter.

Mr Kudrin has served as finance minister since 2000 and was mooted by some investors as a possible candidate for the premiership post under Mr Putin himself.

The threat of his departure is sure to add pressure to a Russian market already reeling from the after effects of the European debt crisis and fears of global financial contagion.