| By James Rodgers BBC News, Moscow |
Russia is entering uncharted waters.
On the streets of the country's towns and cities, everything looks more stable and comfortable than at any time in the post-Soviet period.
Inside the Kremlin, it is a different story.
"Of course individuals are nervous," deputy presidential spokesman Dmitry Peskov says of the changes he describes as "a total renewal of the state machine".
He cautions against exaggeration, though.
"It's not the last battle of beasts in the Kremlin. People are on the eve of a completely new period."
Strange transition
The comparative stability Russia has enjoyed under President Putin has made people wary of change. In 2008, Russia will undergo a transfer of power unlike any in its history.
"The tsars and the general secretaries of the Communist Party died while in office, and Yeltsin and Gorbachev retired with zero ratings," notes Vyacheslav Nikonov, a political analyst with close ties to the Kremlin.
"Putin will retire with a rating of closer to 80%. It's unprecedented."
There is a precedent of people falling from favour as administrations change.
Some of the oligarchs who acquired great wealth and power in the 1990s have fled the country, fearing prosecution. Mikhail Khodorkovsky stayed. He sits in a Siberian prison cell, convicted of fraud and tax evasion.
With those kinds of stakes to play for, everyone wants to know what comes next.
'Tough guys'
Mr Putin's announcement that Dmitry Medvedev would be his preferred candidate seems largely to have settled the question of the presidency - although it would be unwise to entirely rule out a further twist in the race.
Mr Medvedev's rise has been seen as a defeat for the circle of ex KGB-officers in the current administration - the so-called siloviki, or tough guys.
While they are unlikely to stage an open revolt against Mr Putin's choice, they may be ready to put obstacles in his way.
"Some groups of KGB people might stage some sort of resistance if they feel their interests are not respected," suggests Mikhail Krutikhin, editor of Rusenergia, and a long-term observer of the siloviki influence on Russian business and politics.
The year 2008 will also answer the question: "What next for Russia's most popular politician?"
Mr Medvedev has offered Mr Putin the prime minister's job. Until his acceptance, Mr Putin seems to have kept even Kremlin insiders in the dark.
Numerous options were talked about. It was suggested, for example, that Mr Putin could become head of Russia's national security council - a role which is not clearly defined, and which he could therefore make his own.
Russian administration
The quandary of what to do with a popular Russian leader still in the land of the living continues to perplex.
"There may be a weaker president if Putin stays on the scene," concedes one source close to the administration. "Putin knows this and probably has something in mind."
It is an issue not just inside Russia, but around the world.
Natural resources
Russia is on the rise again as a global power - keen to win respect and support for its views on issues such as the future of Kosovo and the Iranian nuclear programme.
This new sense of strength is founded on the wealth which has come with soaring prices for the natural resources which Russia has in abundance.
As demand for oil and gas continues to grow, many in the West are looking warily eastwards, wondering whether Russia is a reliable partner. There are concerns that a future political dispute could lead to the taps being turned off.
The gas row with Ukraine two years ago did massive damage to Moscow's reputation. There is a sense now that Russia has learned a lesson.
"I don't know of any single study or plan to use oil and gas as a weapon vis-a-vis Europe, and I know most of the thinking on that matter," Sergei Karaganov, of Russia's Council on Foreign and Defence Policy told me. "So for me, when I hear these kind of ideas from the West, they seem bizarre."
Anglo-Russian tensions
There is one issue which will continue to cast a shadow over Russia's relations with the West, and Britain in particular.
The new Russian parliament, the Duma, will have Andrei Lugovoi among its members.
He is the main suspect in the murder of former KGB officer Alexander Litvinenko in London. He has denied any involvement. Britain wants him extradited to stand trial. Russia has refused, saying its constitution does not allow it.
The foreign ministry in Moscow has linked its decision to close the regional offices of the British Council in Russia to that row.
The closure is supposed to come into effect on 1 January 2008. In practice, it is likely to be later - the offices would have been closed anyway for the New Year holiday.
The British Council is determined to open as usual - raising the prospect of further confrontation between London and Moscow.
Comments