Putin sacks entire Government to clear way for second term

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Vladimir Putin, the Russian President, amazed friends and foes yesterday by summarily sacking his government, less than three weeks before the presidential election.

In a televised announcement at lunchtime, he said that he wanted to show the direction he intended to take in his second term and named Viktor Khristenko, one of the outgoing deputy prime ministers, as caretaker head of government, to replace Mikhail Kasyanov.

The rouble and the Russian stock market fell sharply at the news, which dismayed the home and foreign business sector. The executive was left in disarray. Mr Kasyanov cancelled a provincial trip planned for today, but an official visit to Kazakhstan later this week was still in his diary. Outgoing ministers did not know whether they were supposed to continue with pre-election visits.

The government's official website crashed, as Russians rushed to the internet to find out what was going on. But when connections were re-established, the old government was still in place and there was no announcement about its dissolution. The Russian media - both state-controlled television and independent radio and websites - were flummoxed. State radio led its half-hourly bulletins with the fact of the government's dismissal, but refrained from comment and passed at once on to safer subjects, such as the Lenten menu in the parliamentary canteen.

Mr Kasyanov was one of the last senior members of Mr Putin's administration to be regarded as an ally of his predecessor, Boris Yeltsin, and the so-called "oligarchs" who made their billions from the collapse of the Soviet Union's centrally planned economy.

Mr Kasyanov's position was believed to be safe, at least until after the election, as he had kept his job through the autumn when official pressure on the oligarchs culminated in the arrest of Mikhail Khodorkovsky, the head of Russia's biggest oil company, Yukos.

Some observers had even forecast that he would be re-appointed prime minister and might be a contender for the presidency in four years' time. But Mr Putin, clearly, had other ideas. Mr Putin, citing his authority under article 117 of the Russian constitution, said that his decision did not reflect on the performance of the government, which had generally been "satisfactory".

Rather, he said: "This is linked to my wish to set out my position on what the country's course will be after 14 March 2004." The elections are scheduled for that date.

Mr Putin and Mr Kasyanov were not close and were known to have disagreed on such issues as taxation, mortgage provision and other key elements of economic policy. But Mr Kasyanov was considered a highly competent administrator and those who have dealings with the government had been apprehensive that some of the favoured replacements would prove less efficient. In choosing Mr Khristenko, 46 - a former economics professor from the Urals, who is the same age as Mr Kasyanov - Mr Putin has passed over the obvious replacements.

As the initial surprise wore off, reactions in Moscow were mixed. Some forecast that Mr Putin's popularity would soar, because he would be perceived to have shown strong leadership in severing one of the last ties with the Yeltsin years.

But others were apprehensive: for them, Mr Putin's chief merit is the stability they say he has brought to Russia during the four years he has been in power. They did not like what seemed to be his growing appetite for springing surprises, not least because it reminded them of the capriciousness of Mr Yeltsin.

The wording of Mr Putin's televised statement suggested that he intended to name a new prime minister before the election and use the complexion of his new government to galvanise interest in his campaign. Although five candidates are standing against him, his re-election is a foregone conclusion and the main risk to Mr Putin is voter apathy. A turnout of less than 50 per cent would invalidate the election.