The battle has reached such intensity that whatever the outcome, the collateral damage for the integrity of the political system controlled by the duumvirate of President, Dmitry Medvedev, and Prime Minister, Vladimir Putin, is certain to be far greater than expectedAll the key parties to this conflict have now discovered themselves to be trapped in a “lose-lose” situation.
Unleashing a propaganda campaign against a particularly stubborn bureaucrat/oligarch, the Kremlin is thus hitting hard at the very foundation of the ruling regime based on the merger of corrupt power and crazy money. Luzhkov’s case may be special but Moscow has become the center of hyper-concentration of all the luxury and poverty of Putin’s Russia. The inflow of colossal petro-revenues has pumped a super-bubble in real estate and enriched thousands of city officials beyond the income level of Arab sheikhs. The sudden arrival of the economic crisis has shocked this ruling class and the current trajectory of protracted recession, while as yet not fully internalized, leads to the collapse of the model of ever-growing prosperity and stability. The signs of governance crisis are clear and manifold, including for instance the abrupt dismissal of Sergei Bogdanchikov from the Rosneft oil company, so the discord between Putin and Medvedev is set to deepen. Luzhkov has been given a week to think about his future, but the duumvirs might also give a thought to how much this quarrel has shortened the life span of their reign.