Newly-inaugurated President Vladimir Putin has set hugely ambitious targets to catapult the Russian economy into the modern era but their realism remains in doubt despite a benign short-term outlook.
Russia is looking with a degree of superiority on the crisis engulfing the debt-ridden eurozone states, predicting only a narrow budget deficit of just 0.3 percent of GDP this year and buoyed by robust first quarter growth.
But Putin is also acutely aware that a major eurozone crisis would severely wound Russian exporters and limit its receipts of petro-dollars.
Moreover, the country's economy has yet to fully modernize 20 years after the collapse of the Soviet Union and its vulnerability to external shocks is an acute worry for Putin as he faces the first serious street protests against his rule.
Russian Deputy Prime Minister Igor Shuvalov, pointman on the economy in the outgoing government, this week gave an unusually frank assessment of Russia's failings, admitting "we cannot say now that Russia is a modern country".
"We have big social spending, large-scale innovation-based industry is absent, we have underdeveloped institutions and a legal system which needs almost to be created from scratch."
"We need to bring the economy and the social sphere to modern standards. This is not an empty slogan but the fulfilment of plans on modernisation," he told the Vedomosti business daily.
Hours after taking office on May 7 for his third term as president after his four year stint as prime minister, Putin signed a decree on economic policy apparently aimed at ending Russia's shortcomings once and for all.
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