Putin Starts New Term With Same Premier Amid Tensions Abroad

(Bloomberg) -- Vladimir Putin was sworn in for the fourth time as president, promising Russians an “economic and technological breakthrough” and reappointing his long-serving prime minister amid the deepest standoff with the West in decades.

Despite Putin’s rhetoric, there’s little appetite in the Kremlin for real changes, according to senior officials, as the growing tension with the U.S. and European Union has strengthened the hand of those arguing for self-reliance and an even greater role for state companies and financing. Those who argued for reducing the conflict in order to focus on economic development are on the defensive after four years of steadily increasing Western sanctions have isolated Russia’s biggest banks and companies from vital financing and technology.

Putin formally asked parliament to confirm Dmitry Medvedev to continue as prime minister, the job he’s held since giving up the presidency to Putin in a job swap executed in 2012. Medvedev is expected to win confirmation easily Tuesday.

Despite the doubling of oil prices over the last two years, Russia has struggled to get its economy back into high gear. Slow growth threatens to reverse Russia’s rise in the ranks of global economies under Putin and undermines the Kremlin’s ability to pay for its military buildup.

Siluanov Promoted

Medvedev said he plans to promote Finance Minister Anton Siluanov, known for his adherence to strict budget discipline, to the role of first deputy prime minister responsible for financial and economic policy. Medvedev laid out his plans for top cabinet appointments, many of them familiar faces, in a meeting with legislators from the ruling party.

Putin is considering appointing Alexei Kudrin, a former finance minister respected by investors for the pro-market overhauls he led in the Russian leader’s first two terms, to a new Kremlin post to lead efforts to revive economic growth, according to officials familiar with the plans. Kudrin, who has called for easing tensions with the West, would be charged with helping rebuild economic links with the U.S. and Europe.

“We must now use all available resources to resolve our most urgent domestic tasks,” Putin, 65, told supporters and officials gathered for the inauguration ceremony in the Kremlin.

“Over its more than thousand-year history, Russia has repeatedly faced times of troubles and trials and has always been reborn like a phoenix,” he said. Putin’s new term is likely to be his last because of constitutional term limits; he’s already the longest-serving Russian ruler since Josef Stalin.

Putin rode from his Kremlin office to the nearby hall for the inauguration in a black Russian-made stretch limousine for the first time rather than a Mercedes as in the past. After the swearing-in ceremony, an artillery salute fired and Putin descended to the courtyard below to mingle with hand-picked supporters.

Public support for Putin remains strong, according to polls, but opposition simmers below the surface. More than 1,600 were detained by police in 27 cities across Russia Saturday at “He’s Not Our Tsar” protests against his nearly two-decade rule, according to activists.

Read more about tensions between Russia and the West: QuickTake

Putin laid out his goals for the new term in a decree signed Monday, calling for faster economic growth that would make Russia the fifth-largest economy in the world, up from twelfth now, as well as improvements to health care, education and infrastructure. The document set ambitious goals for everything from increasing birth rates, life expectancy and labor productivity to building more roads.

“The task now is to overcome the technological lag behind the West while surrounded by unfriendly forces abroad,” said Evgeny Minchenko, a Moscow political consultant who works with the Kremlin. Modernization will be “authoritarian,” he said.

At present, while the Kremlin is eager to avoid further increase in geopolitical tensions, there’s no readiness to take a softer line, say Kremlin and government officials.

“Moscow doesn’t have any interest in further escalation with the West, which will have negative political and economic consequences for it,” said Andrei Kortunov, head of the Russian International Affairs Council, a research group set up by the Kremlin. “But it’s not prepared to do anything that looks like a one-sided concession.”

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