But make no mistake — Medvedev’s market-friendly, pro-Western disposition does not herald a less confrontational Russian foreign policy. Medvedev is Putin’s man; he basks in the reflected glow of Putin’s 70-plus per cent approval rating. His campaign was managed by Sergei Sobyanin, Putin’s chief of staff. Without Putin’s endorsement, Medvedev could not have become a candidate, much less Russia’s president.

Putin and the former and active members of the military and security services within the Kremlin elite (known as the siloviki) are still very much in charge of Russia’s increasingly assertive foreign policy. Russia’s relations with the United States and European Union, at their lowest point since the Brezhnev era, are likely to deteriorate further. There are plenty of potential points of conflict.

The first is in the Balkans. Kosovo has declared independence from Serbia. In response, the Kremlin might be tempted to use Western support for the move as political cover to stoke trouble in neighbouring Georgia by persuading separatists in breakaway republics within that country, a former Soviet Republic with a pro-Western president often at odds with Moscow, to declare their own independence. Russia could then destabilise its neighbour by inserting troops into these enclaves under the pretext of protecting the Russian citizens who live there. Any armed conflict in Georgia risks spillover effects for trans-Caucasian energy routes.

It has also become apparent over the first few weeks of 2008 that Russian-EU tensions over energy supplies have not gone away. Moscow continues to resist pressure to sign on to European proposals for an energy charter that would open Russia’s upstream and pipeline assets to more foreign ownership and competition. At the same time, Russia is pursuing downstream assets in its business and energy relations with Europe, generating anxiety and resistance within some European countries.

... contd.