Putin Fires Prime Minister

Less than three weeks before the presidential election, President Vladimir Putin fired his prime minister in a surprise stroke that rids the Russian leadership of a top holdover from the Boris Yeltsin era.

The dismissal of Prime Minister Mikhail Kasyanov and his Cabinet on Tuesday appeared to bolster the authority of Putin's inner circle of former KGB agents and set the stage for a makeover of the top leadership.

Kasyanov was a strong advocate of the business tycoons many Russians regarded with disdain. His ouster is likely to widen Putin's already overwhelming lead before the March 14 presidential election by attracting voters who accused Putin of continuing Yeltsin-era policies that the tycoons used to amass great wealth.

Under the Russian government system, the prime minister is primarily responsible for steering economic policy. The dismissal of the prime minister also means the dismissal of the rest of the government, though any of them could be reappointed.

In a statement broadcast on state television, Putin said he was reshuffling the Cabinet ahead of the vote to "avoid uncertainty in the federal executive structures." He said the Cabinet's performance was "satisfactory" but he wants a new government to push reforms further.

"Putin," comments CBS News Analyst Stephen Cohen, "seems to be saying: 'After I'm re-elected, I'm going to chart a new economic course. I am my own man - I will take Russia in a new direction."

Igor Bunin, who heads up the Center for Political Technologies - an independent think tank, says Putin apparently "wanted to show that he was rupturing ties with the old regime."

Lilia Shevtsova of the Carnegie Endowment for International Peace said that firing Kasyanov could allow Putin to "lay blame on the government for everything he hasn't achieved during his term."

It also "introduces a certain intrigue in a political campaign that has been void of any," she said.

Putin named Deputy Prime Minister Viktor Khristenko, widely perceived as essentially a yes-man for the president, as interim premier. Putin now has two weeks to submit his nomination for a new prime minister to the legislature.

Until a new Cabinet is formed, the ministers dismissed will be considered "acting" ministers, and Khristenko is expected to meet with them on Thursday, Russian news agencies reported.

The United States, aware of the importance of the U.S.-Russian relationship but increasingly concerned about political developments under Putin, weighed carefully how to respond. Several hours after Putin's announcement, presidential press secretary Scott McClellan was still telling reporters he needed more time to look into the matter.

The U.S. administration is worried about independent media in Russia and believes parliament - dominated by Putin supporters - isn't the strong legislative arm it could be.

Kasyanov, who was named finance minister in 1999 and became prime minister after Putin was elected president in March 2000, often had been rumored on his way out as he clashed with Putin's proteges who were crowding the Cabinet and the presidential administration.

Speculation about his imminent ouster intensified in recent months after he criticized the official probe against Russia's Yukos oil giant even though Putin bluntly warned the Cabinet against meddling into the issue. The attack on Yukos is broadly perceived as a Kremlin-instigated effort to curb the political ambitions of the company's billionaire ex-chief, Mikhail Khodorkovsky.

Kasyanov had said that the Yukos probe badly affected Russia's investment climate and set back its economic development.

"With Kasyanov's dismissal, big business lost their last major lobbying channel in government," Roland Nash, the chief strategist for Renaissance Capital investment bank, told The Associated Press.

Last fall, Putin sacked his longtime chief of staff Alexander Voloshin who championed the tycoons' interests.

Kasyanov, who was haunted by media allegations of corruption early in early stages of his career which won him a rumored nickname "Misha 2 percent," later shook off the negative image and won respect for championing liberal reforms and presiding over the economic boom of recent years.

"Kasyanov represented a sense of stability with a good track record on reform," Nash said. "More reforms were implemented in the past four years than entire past decade."

The ouster of the Cabinet sent shares tumbling briefly on the Russian stock market, but the benchmark RTSI index ended the day down only about 1.5 percent.

"There is no sense that policy will change" said James Fenkner of the Troika Dialog investment company. "The market is waiting for a new reform push."

The dismissal of the prime minister also means the dismissal of the rest of the government ministers, although any of them potentially could be reappointed.

Few pundits believed that Khristenko could hold onto the job, and most said that Alexei Kudrin, who served as first deputy to Kasyanov and shares Putin's St. Petersburg roots, appears to be the top candidate.

Some mentioned Defense Minister Sergei Ivanov, Putin's fellow KGB veteran.

Kasyanov served in the Soviet-era state planning agency Gosplan during the 1980s and steadily rose through economic and financial posts after the Soviet collapse.

As deputy finance minister in 1996, he worked out a deal for repaying debts Russia inherited from the Soviet Union. Two years later, he played a key role in efforts to restore Russia's credibility after the government defaulted on foreign debt and the ruble plunged.