Forget the sinister forest clearing scene from "Miller's Crossing," with John Turturro asking Gabriel Byrne, "Look into your heart." (Or even a liberal journalist asking a law enforcement official for forgiveness in a Moscow region forest.)
file photoNo, this weekend saw a much chummier tableau, as Prime Minister Dmitry Medvedev took the Cabinet for an informal walk in the woods near the Russian capital.

But beneath the smiles, denim jackets and bonhomie, Medvedev's government has a tougher task ahead: to make the budget balance amid a deepening European recession and nervousness that all of Russia's eggs are in the oil and gas basket.

Following on from President Vladimir Putin's cautionary words last week about the need for some kind of belt-tightening austerity, July 1 saw a series of tariff hikes ­ on everything from gas (15 percent) and electricity (various) to vodka (25 percent extra excise duty) and parking fines (up to 3,000 rubles in Moscow).

This extra burden will fall on millions of ordinary Russians, as will the new charges for education and health that take effect this summer. These unpopular measures are coming into effect after the election ­ a quirk of timing presumably not lost on ministers, economists or the rest of us.

The new government hasn't enjoyed much of a honeymoon period since Putin's reelection in March, but the higher tariffs will be its first real test. Although the hikes take effect during the usually quiet summer period, and the heating price hikes will be delayed until the winter, there will be a cumulative effect.

At some point, the austerity measures will start to bite ­ and then the "winter of discontent" predicted by former Finance Minister Alexei Kudrin could become a reality. Then the middle-class hipsters who protested in Moscow may join up with the blue-collar workers from the hinterland. Add in a falling oil price, and you have a perfect storm for the authorities.

There is another side to the Kremlin's Plan B, of course. Once unpopular measures are implemented by Medvedev's team of happy picnickers, Kremlin spin doctors may reason, it could be time to jettison him ­ and bring back Kudrin to sort out the mess.

Keywords: Russia, Economy, Business, Prices - Russian News - Russia

Forget the sinister forest clearing scene from "Miller's Crossing," with John Turturro asking Gabriel Byrne, "Look into your heart." (Or even a liberal journalist asking a law enforcement official for forgiveness in a Moscow region forest.)

file photNo, this weekend saw a much chummier tableau, as Prime Minister Dmitry Medvedev took the Cabinet for an informal walk in the woods near the Russian capital.

But beneath the smiles, denim jackets and bonhomie, Medvedev's government has a tougher task ahead: to make the budget balance amid a deepening European recession and nervousness that all of Russia's eggs are in the oil and gas basket.

Following on from President Vladimir Putin's cautionary words last week about the need for some kind of belt-tightening austerity, July 1 saw a series of tariff hikes ­ on everything from gas (15 percent) and electricity (various) to vodka (25 percent extra excise duty) and parking fines (up to 3,000 rubles in Moscow).

This extra burden will fall on millions of ordinary Russians, as will the new charges for education and health that take effect this summer. These unpopular measures are coming into effect after the election ­ a quirk of timing presumably not lost on ministers, economists or the rest of us.

The new government hasn't enjoyed much of a honeymoon period since Putin's reelection in March, but the higher tariffs will be its first real test. Although the hikes take effect during the usually quiet summer period, and the heating price hikes will be delayed until the winter, there will be a cumulative effect.

At some point, the austerity measures will start to bite ­ and then the "winter of discontent" predicted by former Finance Minister Alexei Kudrin could become a reality. Then the middle-class hipsters who protested in Moscow may join up with the blue-collar workers from the hinterland. Add in a falling oil price, and you have a perfect storm for the authorities.

There is another side to the Kremlin's Plan B, of course. Once unpopular measures are implemented by Medvedev's team of happy picnickers, Kremlin spin doctors may reason, it could be time to jettison him ­ and bring back Kudrin to sort out the mess.