By Charles Clover and Catherine Belton in MoscowRussia’s prime minister Vladimir Putin will return to his post as president next year after he and president Dmitry Medvedev announced they were switching jobs.
The announcement was made on Saturday at the annual conference of United Russia, the hegemonic party that controls two-thirds of Russia’s parliament. It put to rest intrigue over Mr Putin’s next move.
The announcement confirms the long-held impression that Mr Medvedev was only ever a place holder for Mr Putin, who was constitutionally prohibited from a third term after serving as president from 2000-2008.
Mr Putin is now likely to win two consecutive 6 year terms, giving him a total of a quarter century in power from the time he took over the Kremlin in 2000. He remains Russia’s strongest political figure despite stepping aside for four years.
Mr Putin started proceedings, telling delegates that Mr Medvedev would succeed him in heading the United Russia party’s election list in December 4 parliamentary elections. Later, he suggested Mr Medvedev’s candidacy for prime minister, which Mr Medvedev accepted.
Appearing to battle to suppress emotion, Mr Medvedev proposed Mr Putin’s candidacy for president to the party membership: “Taking into account my agreement to lead the party’s election list, I consider it correct to support the candidacy of Mr Putin for the post of president of the country.”
He suggested the arrangement had been made as early as 2007, when Mr Putin had all but appointed Mr Medvedev as his temporary successor.
“What we have suggested to the congress, is a deeply thought out decision. Even more – we actually discussed this variant of events while we were first forming our comradely alliance” he said.
Mr Putin said that the agreement “on who should do what” had been reached long ago.
Mr Putin aimed the rest of his speech at state workers, promising to raise their wages and give them federal land. United Russia is nicknamed “the party of bureaucrats” for its reliance on federal workers.
At one point the former KGB colonel raised his voice to be heard through a failing microphone. “I have not lost my commander’s voice!” he said.
The job switch surprises few in Moscow, where Mr Putin was the favourite to return to the presidency. However, the two men had remained coy on the subject, spinning out the intrigue for the previous three and a half years.
Mr Putin’s return is likely to complicate Russia’s thawing relations with the West, particularly the US-Russia “reset” begun in 2009.
The reset was driven largely by a good personal relationship between Mr Medvedev and US President Barack Obama, and produced a new arms control treaty and US-Russia diplomatic co-operation in troubled areas of the Middle East.
“If Putin returns then I guess we will need another reset” joked a former high ranking Kremlin official earlier this month.
The White House said on Saturday that it would keep making progress in the reset regardless of who the next Russian president was.
The prospect of Mr Putin returning as Russian president next year is unlikely to be received with great enthusiasm in Berlin. A government spokesman in Berlin said that Angela Merkel, the chancellor, had worked very well and closely with President Medvedev and intended to do the same with his successor.
However, the German government has invested considerable time and energy in cultivating Mr Medvedev, and pledging support for his “modernisation programme”.
Ms Merkel, German chancellor, has gone out of her way to get to know the current president. In contrast, her relations with Mr Putin have been noticeably chillier. Although the former president speaks fluent German, he has not been a regular visitor since he became prime minister.
A Putin presidency could also have repercussions for neighbouring Ukraine. The former Soviet republic is close to signing an EU deal that would finally put it on a European track, but Mr Putin has been trying to pull it instead into a customs union with Russia.
The news could turn Mr Medvedev into a lame duck who will struggle to be heard during his remaining 6 months in power.
Throughout Medvedev’s four year term, Mr Putin was seen as the country’s power broker and had veto over most of Mr Medvedev’s decisions. The two publicly disagreed only a handful of times – last spring, for example, Mr Medvedev slapped Mr Putin down over his opposition to Nato’s operation in Libya.
However, they agree on most issues. Mr Putin is believed to want to continue the liberal economic reforms begun under Mr Medvedev, including privatisation, though people close to Mr Medvedev suggest he could adopt a much slower pace than the one the current president had been pressing for.
“I expect Putin will establish a very pro-business and pro-reform cabinet” said Chris Weafer, chief strategist at Troika Dialog, the Moscow investment bank.
But opposition politicians have long criticised the prospect of Mr Putin’s return to presidency, saying it amounts to the old Soviet practice of staying in power for decades. Mr Putin’s return makes it clear that Russia revolves around a cult of personality, and is moving farther than ever from a society based on institutions.
“Modernisation in the contemporary world is first and foremost about the renewal of power. The latest permutation of the ‘tandem’ has nothing to do with modernisation” said Sergei Mitrokhin, leader of the Yabloko party.
Boris Nemtsov, a former deputy prime minister in Boris Yeltsin’s government and now an opposition leader, said the two leaders had chosen “the worst case scenario” for the country.
“This scenario is the worst of all for Russia. This means a new wave of emigration, a new outflow of money abroad, the destruction of the state and the further enrichment of Putin’s friends,” Mr Nemtsov told the FT. “This will lead to a new confrontation with the rest of the world. The world is not going to support such an authoritarian course.”
One senior western banker said that investors and businessmen encouraged by the attempts by Mr Medvedev during his presidency to open up a chink of political openness in the system – such as via the botched project to create representation in the state Duma for a liberal party Just Cause – could now vote with their feet – and their cash.
“The oligarchs are going to try and get their money out and foreign investment is going to disappear,” the banker said, speaking on condition of anonymity. “It doesn’t surprise anyone but it’s going to be ugly.”
Those who had attempted to propel Mr Medvedev into remaining in the presidency and encouraged initiatives to open some degree of political reform could not hide their disappointment. “The fact that they have chosen the risky path that Putin returns as president, this is their choice,” said Igor Yurgens, the head of the Intitute for Contemporary Development, a liberal think-tank that had been advising Mr Medvedev. “But everything [the think-tank] wrote will happen. Without political liberalisation there will be a collapse.”
Additional reporting by Quentin Peel in Berlin