President Dmitry Medvedev

So now we know. It will be Dmitry Medvedev, not Sergei Ivanov (and not Vladimir Putin) who succeeds Vladimir Putin. Putin, it's just been announced, "fully supports" Medvedev's candidacy to replace him when he leaves office after his second term expires in the spring.

So all hail President Dmitry. There is, of course, the small matter of elections to be sorted out, but you can be sure that the Kremlin - unless this decision creates a major rift behind the red walls - will make sure Putin's man is elected. The liberal opposition is self-destructing anyway, choosing not one, but three candidates to run for the presidency in April.

So what can be deduced from this, in these first minutes after Putin's announcement? To me, it says that Putin, instead of choosing someone else from inside the siloviki, the cadre of security service veterans who run the country, has chosen someone personally loyal to him. Medvedev is not a chekist (ex-KGB agent) like Putin and Ivanov, he's a Putinist.

Medvedev has been at Putin's side since the early 1990s, when Putin was chief of staff to St. Petersburg mayor Anatoliy Sobchak and Medvedev was a foreign affairs advisor.

As Putin rose to power, Medvedev followed. First he was chief of staff to Putin after he was appointed prime minister in 1999 by Boris Yeltsin. Then he ran Putin's 2000 presidential election campaign and afterwards became deputy chief of staff to President Vladimir. Next he was installed as chairman of the board at Gazprom, the giant gas company that Putin has turned into the Kremlin's most effective foreign policy tool.

When Alexander Voloshin quit as Putin's chief of staff over the sordid Mikhail Khodorkovsky affair in 2003, Medvedev was brought in to replace him and get the Kremlin back on course. Two years ago, in the first hint that this moment might eventually come, he was made First Deputy Prime Minister (along with Ivanov).

What does all this mean? Two things.

The first is relations between Russia and the West may yet recover some. The 42-year-old Medvedev is seen as more liberal and pro-Western than the hardline Ivanov. Ivanov was the tough guy you always saw in military fatigues noddling gravely at the testing of new Russian military hardware. Medvedev was the mild-mannered man in the suit that you rarely saw at all until he was made deputy PM in an effort to build up his public persona (although he was theoretically also the guy who made the decision to turn off Gazprom's taps to Ukraine and Belarus when those countries bucked the Kremlin's will...).

The second is that real power will remain in the hands of our old friend, Vladimir Vladimirovich. Putin's choice was between a man unquestionably loyal to him (Medvedev) and a man unquestionably loyal to the system (Ivanov). He chose the former.

Medvedev owes Putin everything. If Putin asks him to do something - to make him prime minister, or even to relinquish the presidency because Vladimir Vladimirovich misses the comforts of the Kremlin - he'll do it.

Gazprom weighs in on Ukraine power struggle

With voting still going on in Ukraine - and results close between those who support the Russian-backed Viktor Yanukovich's bid to remain prime minister and those likely to pick the pro-Western, pro-NATO Yulia Tymoshenko - the Kremlin has predictably sent the energy giant Gazprom into the fray.

(With the last results trickling in, Yanukovich's Party of Regions led with just over 34 per cent of the vote, with potential coalition allies the Communists and the Lytvyn bloc together pulling in about another 10 per cent. Tymoshenko had just under 31 per cent, with President Viktor Yushchenko's Our Ukraine movement, which has said it will back her as premier, receiving 14 per cent of the vote. The evolving dead heat can be viewed in a handy little graph on the main page of the Ukrainska Pravda website. A key remaining question is whether the Socialist Party of Aleksandr Moroz will cross the 3 per cent threshold needed to win seats in the Rada. If he does, that likely puts Yanukovich over the top.)

In what looks a lot like an attempt to influence the coming fight over who will be PM, Gazprom - which provides nearly all the natural gas used in Ukraine - yesterday to reduce supplies if by the end of the month it didn't receive some $1.3 billion it claims it's owed by the Ukrainian government. While Gazprom's business case may be entirely justified, the company has long coordinated its goals with the Kremlin (unsurprising, given that deputy prime minister and potential Putin successor Dmitriy Medvedev is Gazprom's chairman).

Gazprom, of course, denied that it's statement had anything to do with the election, but it looks a lot like 2006 all over again. Back then, Gazprom briefly switched off the gas right in the middle of another parliamentary election campaign, reminding Ukrainian voters that severing ties with Moscow came with a cost. Many credit the Gazprom cutoff with helping propel Yanukovich's unlikely political comeback after the disaster of the 2004 Orange Revolution.

Volodymyr Bronnikov, a parliament member with the Party of the Regions, made the connection Gazprom wouldn't. If Tymoshenko is prime minister, and her goal is to move Ukraine away from Russia and towards the West, then Russia is justified in charging Ukraine the same price for natural gas that it does other European countries, he said yesterday. (Ukraine, like most other former Soviet republics, currently receives discounted supplies from Gazprom, a holdover from the days of the USSR.)

"If Ukraine is an ordinary European country, then it must pay ordinary European prices for gas," Bronnikov was quoted as saying by The Moscow Times.

This one looks like a warning shot, intended this time for President Yushchenko himself. The message seems clear: make a grand coalition with Yanukovich (something one Ukrainska Pravda report suggested he was considering), and the last two years of your presidency will go relatively smoothly in terms of relations between Ukraine and its larger neighbour to the east. Put Tymoshenko back in power and the Kremlin will make sure it's a cold winter in Kyiv.