Russian finance minister forced out

MOSCOW – Russia’s influential finance minister was forced out Monday following a televised confrontation with President Dmitry Medvedev, who had angrily demanded that Alexei Kudrin immediately explain his criticism of Medvedev’s policies or resign.

The open conflict within Russia’s leadership follows the announcement over the weekend that Prime Minister Vladimir Putin plans to return to the presidency next year and Medvedev would then take his old job as prime minister. Russia will have a presidential vote in March, but Putin is sure to win.

The departure of Kudrin is likely to unsettle investors and further shake Russia’s markets. A longtime member of Putin’s team, he has been finance minister since 2000, and his tight hold over the budget has been seen as key to Russia’s economic stability.

“It is difficult to see how Mr. Kudrin’s resignation can be anything but market-negative,” said Neil Shearing, chief emerging markets economist at Capital Economics Ltd in London. “With oil prices starting to slide and financial markets still jittery, now is not a good time for the government to lose its arch fiscal hawk.”

On Saturday in the U.S., Kudrin said he would refuse to serve in the government if Medvedev was made prime minister because of policy disagreements he had with him, including plans to substantially boost military spending.

Addressing Kudrin on Monday, Medvedev called the minister’s remarks “irresponsible chatter” and “improper,” especially since they were made while the minister was in Washington for meetings of the International Monetary Fund and the World Bank.

“If you disagree with the course set by the president and being implemented by the government, you have only one choice: Resign,” Medvedev said during a meeting of a presidential commission on modernization held in the town of Dimitrovgrad.

Kudrin, who stayed in his seat, shot back that he would decide only after talking to Putin.

“You can seek the advice of whomever you want, but as long as I’m president, such decisions are made by me,” Medvedev retorted.

The Kremlin said Medvedev signed a decree on Kudrin’s resignation.