Vladimir Putin held a meeting with the heads of the United Russia party and State Duma faction to discuss the formation of a new government. There were no official reports about the candidates discussed at the meeting. However, after the meeting, Kommersant sources in the party reported that the meeting had discussed the possible appointment of State Duma Speaker Boris Gryzlov as premier, with State Duma First Vice-Speaker Alexander Zhukov taking his place in the lower chamber of parliament. However, since the meeting was held behind closed doors and its participants flatly refused to disclose any details, it was unclear whether the President had discussed his decision with those invited or United Russia had made the relevant proposal.
According to Kommersant, those present discussed the idea that the President would put the candidature of Boris Gryzlov before the State Duma on Monday. If this happens, on Wednesday the Lower House will approve him as the Prime Minister of Russia, the newspaper says.
Dmitry Simes, the president of the Nixon Center (Washington D.C.) and leading US analyst specialising in Russia, gave his reaction to Vladimir Putin's dismissal of the government in an interview with Gazeta:
"This move is absolutely within the framework of democracy because the President acted within his Constitutional possibilities. Moreover, when everyone knew that the government would be replaced after the elections (few people doubted this, but no one knew how and when), it seems that this step, made before the elections, will only benefit democracy. This move is intended to let electors know what the President wants to do, which government he wants, to say something about the policy of this government and submit his ideas, if you will, to a vote, i.e. to the presidential poll in this case. This step imparts a new nature to the presidential elections and makes them more rather than less democratic, in my opinion. I believe that this is a constructive, decisive and in its own way elegant step, allowing Putin to find his own form of governance, and break free from the fetters of the Yeltsin past, which he had increasingly thrown off but which remained in the Kremlin, especially in the Cabinet of Ministers."
The financial markets, Vremya Novostei says, reacted calmly to the government's dismissal: the Russian Trading System (RTS) index dropped by 1.45% and already resumed its growth on Wednesday while the decline of the ruble's exchange rate to the US dollar was quite insignificant. "Government reshuffles have no effect on us, while monetary authorities sometimes face greater problems caused by the decisions of the European Central Bank and the US Federal Reserve System," First Deputy Chairman of the Central Bank of Russia Oleg Vyugin said.
Question (Vremya Novostei): Since the start of the year Russia's gold and foreign currency reserves have increased by almost $11 billion to $88 billion. Is the orientation to a particular level of international reserves no longer topical?
Answer (Oleg Vyugin): "We have never set the goal in terms of the volume of the gold and foreign currency reserves. There are theoretical criteria defining the level of adequate reserves for a particular country taking into account its debt burden, its foreign trade balance, etc. However, this is not dogma. The Russian level of reserves is sufficient but this does not mean that it cannot increase further. The growth rates largely depend on the demand for money and external factors, which cannot be predicted. We believe that this is most of all productive for economic growth in the current conditions. At the same time, we understand that a situation may emerge where money supply will rise by 50% while inflation will be at the level of 10%. This is quite possible."
"The European Union is reviewing its relations with Russia;" "Europe and Russia have too great differences in base values to speak about any effective strategic partnership;" "the European Union must be persistent in carrying out a coordinated policy in relation to Moscow, without giving it a possibility to play on the differences in the positions of some member states." These topics have lately dominated discussions about a whole range of relations between Russia and the European Union. The prospect of the admission of ten new countries to the EU at once has only aggravated many of the pressing problems. Acting foreign minister of Russia Igor Ivanov shared his views on the situation:
"There is no crisis in relations between Russia and the European Union. Moreover, there are no grounds for such an assessment. You only have to read the final statement of the Council for Russia to understand this. The first paragraph of this statement says the following: 'the Council supports the willingness of the European Union to build a truly strategic partnership with Russia based on equal rights and obligations, mutual trust, an open and sincere dialogue.' Russia is ready to put its name to each of these words.
"We are witnessing a process of the European Union's profound transformation: the admission of ten new states to the EU has come to coincide with the review of the institutional fundamentals of the European Union. This is a difficult stage in the EU's history. However, we are both interested and confident that temporary difficulties will be overcome and the European Union will emerge from them even stronger."