Putin boosts finance minister Kudrin in reshuffle

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MOSCOW, Sep 24 (Reuters) Russian President Vladimir Putin boosted the authority of Finance Minister Alexei Kudrin, seen as a guarantor of economic stability, in a government reshuffle toay that limited other changes to a minimum.

Putin kept 46-year-old Kudrin on as finance minister and promoted him to the rank of deputy prime minister, a vote of confidence for a man credited with masterminding Russia's return to financial health after the turmoil of the 1990s.

''The finance minister's status has been raised,'' Putin was shown on television telling his new cabinet. ''He will simultaneously carry out the functions of deputy prime minister.'' The biggest casualty in the reshuffle was Economy Minister German Gref, who was replaced by 44-year-old Elvira Nabiulina, a think tank boss who was previously Gref's deputy.

Gref was an economic liberal who, alongside Kudrin, fought frequent turf wars with more interventionist colleagues in the cabinet. His departure had been widely predicted.

The cabinet was reshuffled after Putin earlier this month sacked Mikhail Fradkov and named Zubkov, a little-known financial regulator, as prime minister in his place.

Putin is due to step down in 2008 when his second term finishes. Analysts and investors had been awaiting the cabinet announcement for signs of who might be in the running to replace him, and of the government's policy direction.

POTENTIAL SUCCESSORS First Deputy Prime Minister Sergei Ivanov -- favourite in the opinion polls to succeed Putin in 2008 -- kept his job, as did fellow First Deputy Prime Minister Dmitry Medvedev.

Putin brought Dmitry Kozak, a close ally who had been his envoy to the turbulent North Caucasus, into the government as the new regional development minister.

The reshuffle confirmed the status of Ivanov and Medvedev as possible presidential contenders, but also added Kudrin and Kozak to the list, analysts said.

Putin sacked two of his least popular ministers. Health and Social Affairs Minister Sergei Zurabov ran a botched reform of social benefits, and Vladimir Yakovlev failed to make his mark on the regional development portfolio.

''It's very good to have Kudrin in. Since the reforms stopped in 2003, perhaps he is the main success of the government in maintaining quite remarkable financial stability in the face of very high oil prices,'' said Roland Nash, head of research at Renaissance Capital investment bank in Moscow.

''Gref out is a slight disappointment but has been rumoured for some time. He has been an anchor of economic policy for four or five years but was said to be looking to leave.'' Tatyana Golikova, previously deputy finance minister, was given the health and social affairs portfolio. Analysts interpreted that appointment as a further reinforcing Kudrin's position within the government.

Putin kept Defence Minister Anatoly Serdyukov in his post, turning down the resignation he had earlier submitted. Serdyukov had asked to leave the government, citing the fact he is Zubkov's son-in-law as a potential conflict of interest.

Putin told his ministers on Monday he expected results from the new government.

''I very much hope that under new Prime Minister Viktor Zubkov, the Russian government will strive in the most decisive way to achieve the objectives ... we have formulated as strategic aims for the country's development,'' he said.

Reuters KK VP0058

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