Medvedev sacks Putin’s Finance Minister, Alexi Kudrin

Russia’s longtime finance minister is out, sacked for insubordination on Monday after he and President Medvedev disagreed over budget items while on a live television program. The two men have often disagreed but never in public. Earlier in the weekend Mr. Kudrin criticized both Medvedev and Putin at a meeting of the International Monetary Fund and World Bank in Washington, saying that Medvedev’s military spending was irresponsible and blaming Putin for failing to account for deficits in Russia’s pension funds.

Mr. Kudrin is seated 2nd from the left of President Medvedev at a budget committee meeting on 21 September 2011.

Alexi Kudrin was not only Russia’s Finance Minister, but he also served as Deputy Prime Minister to Vladimir Putin and insiders have speculated that the exchange may have been a set-up for Kudrin to muscle out Medvedev as the next Prime Minister after the 2012 elections in which Mr. Putin’s return to the presidency is an almost certainty.

During the Sunday broadcast Mr. Kudrin openly questioned the president’s competence in economic affairs and then surprised the audience with the announcement that he’d rather quit than work for Mr. Medvedev, who is slated to become prime minister next year in a leadership swap with Vladimir V. Putin.

During the televised meeting from Dimitrovgrad, Mr. Medvedev said that,“No one has abolished discipline and subordination. If you think that you have different views on the economic agenda from the president, and that is me, then you can write a corresponding letter of resignation. You must answer, of course, here and now. Will you write the letter?”

Obviously surprised, Mr. Kudrin answered that he would seek the advice of Prime Minister Putin.

Not to be sidetracked, President Medvedev retorted that, “You can seek advice from whomever you want, including from the prime minister, but while I am president, I will make such decisions. You need to decide, and quickly.”

Just hours later Mr. Medvedev signed an executive order releasing Mr. Kudrin from his duties and the presidential press secretary confirmed that the firing was done with Mr. Putin’s knowledge. Under the Constitution of the Russian Federation, the prime minister must approve such actions.

Scene from the Finance Committee meeting of 3 August 2011 chaired by President Medvedev with Mr. Kudrin to his immediate right.

Are there breaks within the ruling elite that could divide the tandem of Medvedev and Putin? Some analysts believe that firing was motivated by a desire to solidify Mr. Medvedev’s credibility after his ceding power back to Mr. Putin next year as announced in last week’s United Russia party congress. However, Mr. Putin and Mr. Kudrin have also shared a long and close friendship and some believe the move is a way to release Kudrin to seek the Prime Minister position in 2012.

Mr. Kudrin was an essential member of the governing team that Mr. Putin initially put together while president, and some investors feel that his departure from the government could worsen Russia’s economic woes.

Medvedev (L) and Kudrin (R) in a meeting at the President's office, 23 May 2011.

Mr. Kudrin was among the St. Petersburg elite who brought Mr. Putin to Moscow in the 1990s to serve then-president Yeltsin.