Luzhkov Affair: Assessing The Implications

Our view that Moscow Mayor Yuri Luzhkov was unlikely to remain in power has played out, after he was sacked by President Dmitry Medvedev on September 28. On balance we believe that the development has bolstered Medvedev's position in the near term, given that prolonged ructions could have seriously damaged the president's credibility. That said, we highlight that Prime Minister Vladimir Putin's likely important role in removing Luzhkov will only serve to reinforce perceptions that he remains the dominant power, raising further doubts about whether Medvedev will stand for re-election in 2012.

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