[NYTr] Putin Agrees to Become Prime Minister Under Medvedev

[All the News That Doesn't Fit]

Bloomberg - Dec 17, 2007
http://www.bloomberg.com/apps/news?pid=20601087&sid=a_meAel6sAlM&refer=home

Putin Agrees to Become Prime Minister Under Medvedev

By Henry Meyer and Alex Nicholson

Dec. 17 (Bloomberg) -- Vladimir Putin agreed to become Russia's prime
minister under his chosen successor, Dmitry Medvedev, allowing him to
stay at the center of decision-making after leaving the Kremlin.

Putin told a United Russia party congress in Moscow today, which
officially nominated Medvedev as its candidate for the March 2
presidential election, that he won't try to weaken Medvedev's
presidency, which pollsters say is almost assured.

``If our people, Russian citizens, place their trust in Dmitry
Anatolyevich Medvedev and elect him as the new president of the Russian
Federation, I'll be ready to continue work as head of the government
without changing the distribution of powers between the presidency and
government,'' Putin said.

Putin, 55, who has to step down in May after serving two consecutive
four-year terms, is widely expected by analysts to remain the most
influential politician in Russia. They say this may provoke a conflict
if Medvedev, 42, later uses his constitutional authority as president
to assert himself.

``You have a situation where all the power is in one person, but the
most popular person, the stronger of the two, is in a constitutionally
weaker role,'' Chris Weafer, chief strategist at Moscow-based UralSib
Financial Corp., said in a telephone interview. ``You have an explosive
recipe there.''

Presidential Powers

Under current Russian law, the president appoints the prime minister
and the rest of the Cabinet and can dismiss the premier at any time.
The defense, foreign and interior ministers and the head of the Federal
Security Service all report directly to the president.

Since Putin endorsed Medvedev as his successor, his political ally has
shot ahead in the presidential-election opinion polls. A survey by the
independent Levada Center published Dec. 12 gave Medvedev 35 percent
support, 14 points ahead of his nearest rival, Sergei Ivanov. Both men
are first deputy prime ministers.

Putin, whose approval ratings approach 90 percent after eight straight
years of economic growth, led United Russia's list of candidates to a
landslide victory in parliamentary elections on Dec. 2.

He said last month that a strong showing for United Russia would give
him the ``moral right'' to guide Russia after his term ends. The party
won 315 out of 450 seats in the State Duma, or lower house, enough to
initiate constitutional amendments or impeach the president.

Stocks Rise

Investors, who cheered Putin's decision to pick Medvedev, a lawyer who
has a pro-business reputation, also welcomed today's formal nomination.
The Micex Index in Moscow erased losses following the announcement in
Moscow, rising as much as 0.2 percent on the day before falling back
later.

``This signals Putin will be very much involved in the day- to-day
decision-making, which bodes well for continuity,'' said Yaroslav
Lissovolik, chief economist at Deutsche Bank AG in Moscow. ``The last
vestiges of political uncertainty were stripped away during today's
meeting,'' he said by telephone.

Medvedev said in his acceptance speech he was counting on Putin to
share his experience of running the country.

``I have no doubt that in the future Vladimir Putin will use his
enormous political capital and influence in our society and the world
for the good of Russia,'' Medvedev said. ``Only together with the
creator of our strategy, Vladimir Vladimirovich Putin, can we implement
it in full.''

Even so, the two men could easily fall out, cautioned Alexei Mukhin,
director of the Moscow-based Center for Political Information.

`Dual Power Structure'

``If Putin takes the prime minister's job after May, he will be
fighting for his political survival as national leader,'' he said in a
phone interview. ``You will have a dual power structure.''

Yury Korgunyuk, an analyst from INDEM, an organization in Moscow that
lobbies for government transparency, said Putin's position will be
precarious. In September, the current president unexpectedly sacked his
premier and appointed Viktor Zubkov, an unknown financial regulator.

``By leaving the presidency to occupy a lower rung, he becomes a
bureaucrat who can be dismissed at any time,'' Korgunyuk said by phone.

Putin threw his support behind Medvedev, a long-time associate from his
native city of St. Petersburg, on Dec. 10. The next day, Medvedev said
that if elected president he would ask Putin to head the government as
prime minister.

The United Russia congress backed Medvedev today by 478 votes to none,
with one abstention.