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RUSSIA: Finance minister threatens to quit over Medvedev

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Respected Russian Finance Minister Alexei Kudrin said he will resign if current President Dmitry Medvedev is named prime minister next year under a new Vladimir Putin presidency.

On Saturday, Prime Minister Putin said he will run for president in the spring and would select Medvedev as his prime minister if elected. Kudrin, who is one of the most trusted Russian politicians among foreign investors, said Sunday that he has fundamental economic disagreements with Medvedev.

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‘I do not see myself in the new government. The point is not only that no one has offered me the job. I think that the disagreements I have will not allow me to join the government,’ Kudrin said in Washington at a World Bank meeting, hours after Putin’s announcement that he would seek a return to the presidency he previously held for two terms.

Kudrin, who has served as finance minister for the last 11 years, is believed to have a major role in Russia’s economic growth and stability. Earlier this year Kudrin was seen as a likely choice for Putin’s prime minister.

Kudrin disagrees with Medvedev over a recent increase in military spending, saying that it will add risks for the budget and macroeconomics, and keep Russia dependent on high oil prices. Other points of conflict include pension fund reforms, which Kudrin believes have not been successful.

Though the finance minister does not agree with Medvedev’s fiscal policies, he supports Putin and thinks he will bring financial reforms if he becomes president.

‘Putin feels problems very seriously and responds to them. In this sense, I hope that he will also feel what is necessary to be done to raise the potential of economic growth, including the implementation of structural reforms,’ Kudrin said, according to the Russian news service RIA Novosti.

Deutsche Bank Russia chief economist Yaroslav Lissovolik said the government will probably negotiate to keep Kudrin from leaving.

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‘There is still time to resolve the issues,’ Lissovolik said.

Putin’s press secretary, Dmitry Peskov, said Sunday that Kudrin will ‘remain on Putin’s team,’ the Russian news agency Interfax reported.

‘Any empty rhetoric about who is going to be in the government and who will not is hopeless,’ Peskov said.

The weekend announcement of the probable Putin-Medvedev job switch is likely to slow foreign capital flight from Russia brought on by uncertainty over what would happen next year, Lissovolik said.

Several hundred people attended a ‘For Russia Without Putin’ rally in central Moscow on Sunday. Such rallies are regularly held by opposition groups, and this one was sanctioned by authorities. The Solidarnost opposition movement leader Ilya Yashin said he expected about 50 people, but after Putin’s announcement, nearly 500 showed up.

Yashin urged protesters to take action instead of emigrating. He said he expects mass emigration of the educated upper class because ‘nobody wants to live under Putin for another 12 years.’

‘I asked people to stay and not to leave the country to scoundrels,’ Yashin said.

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