Putin springs surprise choice for PM's job

[Ellinas]

By Michael Stott

MOSCOW (Reuters) - President Vladimir Putin on Wednesday named the little-known head of a financial market watchdog as his prime minister in a surprise move that kept Russians guessing over who would succeed him in the Kremlin.

Earlier, Putin accepted Prime Minister Mikhail Fradkov's resignation and then left Moscow for a planned trip to the Volga region without publicly disclosing a replacement.

It was left to the speaker of the State Duma (parliament), Boris Gryzlov, to announce that Putin had nominated Viktor Zubkov, the 65-year-old head of the Federal Financial Monitoring Service as new prime minister.

The agency's main duty is to fight money laundering and Zubkov worked with Putin in the St Petersburg mayor's office during the 1990s.

The move confounded analysts' predictions that Putin would elevate one of the most widely fancied candidates to succeed him to the prime minister's post as a stepping stone to the top Kremlin job.

That was the sequence of events under former president Boris Yeltsin, who made Putin prime minister in 1999 before naming him acting president months later.

Vyacheslav Nikonov, who heads the Politika Foundation think-tank, said Putin's decisions on appointments had seldom been guessed correctly and predicted that the Yeltsin scenario was unlikely to repeat itself this time.

"I do not exclude that another politician can become the successor, including all those named (as possibles) in the last few months," he said. "I do not believe Zubkov's nomination means it is he who will succeed Putin."

Conventional wisdom in Moscow had been that Sergei Ivanov, a close Putin ally and one of two first deputy prime ministers, would be named premier as a step towards becoming the Kremlin's favored presidential candidate next year.

Putin, however, has sprung surprises before and Zubkov has never been mentioned as a possible presidential candidate.

"TRANSITIONAL FIGURE

Some analysts said Putin simply named him to keep voters guessing about his successor and avoid the risk of becoming a lame duck before he leaves power in May 2008.

"Most likely he is a transitional figure, who will stay until the new president's inauguration and the appointment of the new government," said Natalya Orlova, chief economist at Alfa Bank in Moscow.

Despite the uncertainty generated by Zubkov's nomination, financial markets were not overly concerned. The rouble was steady against the dollar and Russian stocks were down about half a percent, in line with weakness elsewhere in Europe.

"Markets have taken today's announcements in their stride," said Tim Ash, head of emerging market research at Bear Stearns.

"The assumption is still that Putin will manage the succession to ensure continuity on the policy front after the next presidential poll."

Zubkov graduated as an economist, worked as a communist party official and ran collective farms in the Leningrad region before working in the administration of Putin's home city of St Petersburg in the 1990s, when Putin was deputy mayor.

Finance Minister Alexei Kudrin praised Zubkov as "a legendary man who did a lot to develop the economy of the Leningrad region, to build up its tax service".

"It was he who created from scratch the whole system of fighting against money laundering", website newsru.com quoted Kudrin as saying.

"We all have to think together how to build a structure of power so that it better corresponds to the pre-election period and prepares the country for the period after the presidential election in March," Putin told Fradkov in their Kremlin meeting.

The president thanked him for "substantial positive results" during his three and a half years as premier.

Putin, limited by the constitution to two consecutive terms, says he will step down next year. Whoever the popular Putin endorses to replace him is almost assured victory in the March 2008 presidential election.

Reuters