Crisis leaves Russian ambitions thwarted at Rome G7

Russian Finance Minister Alexei Kudrin may have felt it as a sign of the times that he was among the last at Rome's Excelsior hotel to see the closing statement from this weekend's meeting of global policymakers.

The worst economic crisis in a decade has hit Russia's chances of taking a stronger role in the G7/G8 groups of industrialized nations and it was hard to escape the feeling on Saturday that the clout it had achieved thanks to record high oil prices has evaporated.

Russia has never been accepted as a fully-fledged member by those in the G7 club of free-market democracies, but in recent years it had been pushing hard for a change of mind. There was little sign of that in Rome.

As for any communique, there is room for this one to be better, said Kudrin as he struggled through the English version of the communique brought to him by an aide during his press conference two hours after the meeting was over.

The prospect of oil at $200 per barrel within two years at the last summit of G8 government heads in Japan had prompted talk of Russia, the world's second largest oil exporter, soon taking a proper seat at the discussion table on economic issues too.

But with Russian crude trading at just above $40, Kudrin came to the G7 worrying more about inflation, debt and a slide in the rouble that has worried Moscow about the chances an economic downturn could become political trouble.

What may eventually turn some heads is the state of Russia's struggling private sector, in which Western companies have invested heavily and which runs about $500 billion in foreign debt accumulated during the boom years, much of it with international banks.

But a Russian delegation source said that, with Timothy Geithner's debut as U.S. Treasury Secretary the center of attention in Rome, the debt issue had not even been raised.

IMPORTANT CLUB

Moscow's seat at the G8 was a gesture of good will in the 1990s and makes it feel special compared to other major emerging powers China, India and Brazil, who are not a regular part of the G7 meetings.

But there is a consensus that the broader G20 grouping is becoming the main forum for decisionmaking in the global financial crisis. The danger for an April meeting in London billed as a new Bretton Woods to reform global finance, is that Moscow will react negatively to being left out in the cold.

President Dmitry Medvedev and other figures have already lambasted the G20 for its slow progress ahead of the summit and Medvedev has even questioned whether it is worth going. Kudrin said the Rome G7 meeting was an important step in G20 preparations.

This club (the G8) is still important and will remain such in the future, said Kudrin.