For the first time in Russian history a head of state not only stayed in the Government after completing his term, but also became a Prime Minister, the number two person in the Government hierarchy. Mr Putin's transition is hardly proving seamless. The financial crisis has dashed any possible hopes for a calm tenure. In addition, not all the measures taken by the Prime Minister seem to be working.
The former President's move to the Prime Minister's office prompted a restructuring in the Government. A new organisation has been created, the Government Presidium, which has essentially replaced the previous format of the Government. The Presidium is meeting weekly and taking up mostly key issues for consideration, whereas the Government now meets once a month and takes up issues far from the top of list. Putin is staying away from the menial work, having delegated it to his numerous deputies. This allows him to stay above the fray and spares him the need to report to President Dmitry Medvedev. It's obvious that any interaction with the President that could emphasise Mr Putin's position as second in command in Government hierarchy has been minimised.
The Government's work schedule has also changed. Whereas in the past Cabinet meetings would take place once a week at 10 am, with Putin in charge, the ministers and the Presidium rarely meet in the morning. Now, the meetings are mostly held in the afternoon and sometimes in the evening. Most of the issues, unlike in previous times, are discussed behind closed doors. The media are only allowed to cover as much of them as necessary to shape a positive perception of the Government by the public.
In the meantime, some of economic decisions and statements of the new Prime Minister have been met with the disapproval of experts and the business community. The Mechel case, which shook the Russian stock market at the end of July-early August, is one of them. The Prime Minister publicly criticised Mechel's sales strategy and promised to send a "doctor" to fix the company's founder Igor Zyuzin. Putin was angry because Mechel, the largest coal producer in Russia, was selling resources abroad at prices significantly lower than Russian domestic prices. Putin's criticism caused Mechel's stock prices and the Russian stock market to plunge. Overnight, the company lost a third of its capitalisation.
Mr Putin also failed to contain inflation within the Government forecasted levels. Initially the plan was to keep it under 7%, however, the Government was forced to adjust its prognosis several times and raised the cap to 13.5-13.8%.
It appears that the financial crisis arrived in Russia and caught Putin off-guard. In May and June, the Prime Minister was saying that Russia would remain a quiet harbour for investors in the stormy waters of the world financial crisis. In September, when the stock market crash caused the Government to adopt its first packet of anti-crisis measures, Putin said that the market plunge had stopped. However, the very next day the stock market plummeted again, proving that the Russian economy was far from safe. Experts and the business community reacted by voicing their concern for the effectiveness of Government ant-crisis measures.