The Kremlin line is that the teamwork between Mr Putin as prime minister and Mr Medvedev as president will guarantee stability, creating a good base for more liberal reforms. Mr Putin has hinted that more state companies will, sooner or later, be privatised. So far, this has sounded more like a redistribution of property, rather than liberal reform.
As for Mr Putin, he seems still to be keeping his options open. If he becomes prime minister it is hard to imagine him answering to Mr Medvedev. Whatever the form, Mr Putin will be more popular and more powerful than his protégé. Under the constitution, the president has control over the army and the security services, but this could easily be changed by a parliamentary vote. In any event Mr Putin is unlikely to part with power. More surprises could be in store, even the revival of a once-touted plan for a union with Belarus that might let Mr Putin stay president.
The Kremlin's machinations have revealed a simple truth: that the authoritarian system created by Mr Putin in the past eight years does not allow an orderly transition of power from one elite to another. Kirill Rogov, a political analyst, points out that elections, which in a democratic society act as a mechanism for rotating power, have in Russia become a mechanism for preserving it.
This reverses the biggest achievement of Boris Yeltsin's short-lived, imperfect democracy: a peaceful transfer of power. The manner in which Mr Yeltsin handed power to Mr Putin in December 1999 was not ideal, but he did step down and let somebody else take charge. Mr Putin seems unable to repeat that. Indeed, so as to hang on to power, he may be prepared to undermine the institution of a strong presidency that he helped to create.
For all the talk of stability, Russia is in some ways less stable than it was. Mr Putin has been lucky to enjoy an oil boom that filled up state coffers and fanned economic growth. But the underlying economy has not been diversified or restructured. Inflation is running in double digits, domestic gas and electricity prices need to be raised and the outlook for the world economy is suddenly gloomier. Yet the biggest danger for Russia remains political.
Parenthetically, I'm currently reading Montefiore's Stalin: The Court of the Red Tsar, which is a goldmine of information on how a one-party state rapidly became a secret-police state---pushed by Stalin's purges, the NKVD was Murder Incorporated on a Hitlerian scale as the Party Elite attacked the Party itself. The problem lies in means and methods, and the KGB inherited the mentality of the NKVD, which in turn was an "Organ" created by Stalin & Beria, two Georgians strongly influenced by the "poison-poison" culture derived from the 18th century rule of Georgia by Iran, and its poison-Shahs Nadir Shah and Shah Abbas, whose Borgia-clone courts fascinated Stalin no end as he wrote the curriculum for Georgian primary & secondary education.
Beria was an experienced poisoner, a real expert, and Section 13 of the KGB inherited his expertise in murder by deniable means. Putin has evidently been seeped in this culture and Polonium 210 has succeeded Beria's potions in the political pharmaceutical arsenal wielded by Vlad, the Empoisoner. The Economist sums it up:
Russia has traditionally had only one centre of power: the Kremlin. There is but one precedent for a strong prime minister and a weak head of state. This was 100 years ago when Pyotr Stolypin was prime minister under Tsar Nicholas II. Stolypin dealt ruthlessly with political protesters to push through reforms to make Russia a leading European power. His catch-phrase was: give Russia 20 years of peace, and you will not recognise it. But it all ended badly. Stolypin was assassinated, Nicholas II murdered by the Bolsheviks—and Russia plunged into 73 years of communism.
We can only hope that Russian autocracy succeeded by oligarchy then by dictatorship and finally democracy does not revert back to its atavistic autocracy by another Tsar, this time a scion of the Secret Police culture which still afflicts Russia.