President tells Finance Minister Kudrin to resign

Finance Minister Alexey Kudrin
President Dmitry Medvedev has accepted the resignation of Finance Minister Alexey Kudrin after he stated he did not plan to work under Medvedev as Prime Minister.

“The President of the Russian Federation has signed a on the resignation of deputy prime minister and Finance Minister Alexey Kudrin,” presidential press secretary Natalya Timakova told the press on Monday evening. Speaking of the reasons behind the decision, Timakova noted that they all were given by the president at an earlier session of the modernization commission at which the president and finance minister traded barbed comments.

"The Finance Minister did not hand in the letter himself. The President  signed a decree in keeping with the existing procedure when a letter of resignation is presented by the prime minister," Timakova added.

Speaking at the Monday session of the Presidential Commission on Modernization in the town of Dimitrovgrad, Medvedev said he gave Kudrin until the end of the day to make a decision on his resignation.

“You must decide very quickly and give me your answer today,” Medvedev said.

Russian President told Finance Minister Aleksey Kudrin to decide on his resignation within one working day, after Kudrin told the press that he was not going to work under Medvedev as prime minister.

Kudrin answered that he would discuss the issue with the head of the government Vladimir Putin. “Dmitry Anatolyevich [Medvedev] we really have disagreements, but I will make my decision after taking an advice from the prime minister,” Kudrin said. “You may take advice from whoever you like, but until I remain president I make such decisions myself,” Medvedev said.

On Saturday Kudrin told a group of journalists in Washington that most likely he will not be in the new government formed by Dmitry Medvedev as prime minister. Medvedev said he will take the post if United Russia wins the parliamentary elections and Putin wins the presidential elections in 2012.

“I do not see myself in the new government. This is not only that no one has offered me this. I think that the disagreements that exist will not allow me to be there. I exclude such option for myself,” the Russian Finance Minister said. He later said that even if such offer is made he will definitely turn it down.

Kudrin has repeatedly criticized the political course on increasing state expenditures on the military and on social spheres. He said that such an increase would carry additional risks for the budget and for the national economy as a whole. The growing expenditures do not allow the Finance Ministry to bring down the budget deficit while the oil prices are still big and this in turn strengthens the national economy’s dependence on oil prices.

Kudrin told reporters that he had objected to the growing military budget and to rising payments to the pension fund, but these decisions were made nevertheless and fixed within the three-year budget plan. Kudrin said that the new government would have to resolve these questions anyway, but he would not be in it.

At the same time the Finance Minister welcomed the plan announced of United Russia’s elections convention on Saturday according to which Vladimir Putin will run for the presidency in 2012 and Dmitry Medvedev will replace Putin as prime minister. At the same time he noted that the Putin still must go through elections and receive the voters’ support.

“We have reforms in the near future. I think Putin will also be active in making changes. He feels the problems very seriously and he reacts to them. I hope he feels what is needed to increase the economic growth potential, including the structural reforms,” Kudrin said.

The finance minister also said he was sure that Putin as president and Medvedev as prime minister would properly react to the existing challenges.

Russian analysts said that Kudrin’s resignation would not mean his demise from politics, as the official would most likely be offered a new post. An unnamed source in financial circles told the Russian news agency Prime that Kudrin could be put in charge of the Central Bank and in this position smooth down the government’s initiatives. “His statement today can be considered a statement by the future head of the Central Bank,” the source said.

Other analysts said that Kudrin could become the head of the state-owned Vnesheconombank or Russia’s representative in some international financial organization. None, however, could suggest a likely replacement for Kudrin in the role of finance minister.

Russian political scientist Mark Urnov said that there were rumors that Kudrin had expected to become the prime minister himself and decided to quit after the post was offered to Medvedev. However, the analyst himself said that he did not know if these rumors had any real basis.

At the same time many analysts of the financial sector said that Kudrin’s dismissal could deal a blow to Russia’s position, as many investors saw the minister as a guarantor of Russia’s budget policy and praised him as the leading liberal member of Vladimir Putin’s team.