Russia’s influential finance minister was forced from office tonight following a televised confrontation with president Dmitry Medvedev.
Mr Medvedv had angrily demanded that Alexei Kudrin immediately explain his criticism of his 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 Mr Medvedev would then take his old job as prime minister.
Russia will have a presidential vote in March, but Mr Putin is sure to win.
The departure of Mr Kudrin is likely to unsettle investors and further shake Russia’s markets.
A close Putin ally, 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, Mr Kudrin said he would refuse to serve in the government if Mr Medvedev was made prime minister because of policy disagreements he had with him, including plans to substantially boost military spending.
Addressing Mr Kudrin today, Mr 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,” Mr Medvedev said.
Mr Kudrin said he would decide only after talking to Mr Putin.
“You can seek the advice of whomever you want, but as long as I’m president, such decisions are made by me,” Mr Medvedev retorted.
The Kremlin said Mr Medvedev signed a decree on Mr Kudrin’s resignation. State news agencies reported that Mr Kudrin confirmed that he had quit.
Mr Kudrin has been widely credited with helping Russia weather the 2008-2009 global financial crisis. During Mr Putin’s presidency from 2000 to 2008, Mr Kudrin stashed some of the revenue from Russia’s soaring oil exports into a stabilisation fund despite strong opposition from other ministers who wanted to spend the money.
But when the financial crisis hit and oil prices sank sharply, those savings proved crucial in reducing the blow to Russia’s economy.
AP