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Interview- Russia does not meet G8 criteria- ex-sherpa

CORRECTED - INTERVIEW-Russia does not meet G8 criteria-ex sherpa

In MOSCOW story headlined "INTERVIEW-Russia does not deserve G8 seat - Putin's ex-aide" please correct headline to read "INTERVIEW-Russia does not meet G8 criteria -ex-sherpa."
In the first paragraph please read "Russia does not meet the criteria for membership of the Group of Eight..." instead of "Russia does not deserve a place in the Group of Eight..."
And in paragraph 5 please read "He has in recent days made the case in a number of publications, in Russia and abroad, that Russia does not meet G8 criteria," instead of "He has in recent days repeatedly made the case in a number of publications, in Russia and abroad, against Russia's membership of the G8."
This clarifies that Illarionov did not say Russia should be removed from the G8. A corrected repeat follows.

By Darya Korsunskaya
MOSCOW, April 20 (Reuters) - Russia does not meet the criteria for membership of the Group of Eight because the Kremlin has retreated from democracy and boosted its control over the economy, Russia's former G8 sherpa told Reuters in an interview.
President Vladimir Putin will host U.S. President George W. Bush and other G8 leaders at a summit in his home town of St Petersburg in July to crown Russia 's first stint chairing the rich nations' group.
" Russia does not meet most of the G8 criteria," Andrei Illarionov , Putin's former economic adviser and G8 point man said in a recent interview. "That concerns the level of economic development and the standards of its democratic institutions."
Illarionov, 44, has become one of Putin's most vocal critics since he quit the Kremlin in December saying Russia was no longer free and democratic.
He has in recent days made the case in a number of publications, in Russia and abroad, that Russia does not meet G8 criteria.
Kremlin officials see Russia 's presidency of the group as an affirmation of the country's renewed geopolitical clout after the chaos of the 1990s.
It joined in 1998, as world leaders sought a way to cement Russia 's erratic transition from the Soviet Union to democracy.
The club, which includes the United States , Japan , Canada , Germany , France , Britain and Italy , has a rotating presidency. Russia took over as president at the start of the year.
But some G8 members, such as the United States , have criticised Russia 's democratic record and warned the Kremlin against using its natural resource wealth to bring neighbours to heel.

ENERGY SUPERPOWER
Putin, keen to underline Russia 's authority as an energy superpower, has placed energy security at the heart of this year's G8 agenda. Russia is the second largest oil exporter and has the biggest reserves of gas, supplying about a quarter of Europe 's gas needs.
Putin has called for a strategy to tackle instability in world energy markets, where oil hit new records this month.
But some European and U.S. officials have said privately that the rhetoric has little substance, especially after Moscow 's dispute with Ukraine over the price of Russian gas.
Russia cut gas supplies to Ukraine briefly earlier this year, disrupting supplies to Europe, which gets 80 percent of its Russian gas from pipes which go across Ukraine .
"The agenda for the upcoming summit put our partners in a somewhat difficult situation because the seven didn't fully understand what Russia had in mind," Illarionov said.
"As Russia cut gas supplies to Europe on Jan. 1, the world's realisation of the Russian understanding of 'energy security' became more adequate. However, it seems to me that this did not bring relief."

KREMLIN DISSIDENT
Illarionov, an economist, was plucked from academia by Putin in 2000 and appointed a presidential aide, but he often seemed out of step with the Kremlin establishment, criticising its breakup of oil major YUKOS as the "scam of the year."
After a forced sale, YUKOS's main oil production unit was bought by a state company, Rosneft, whose chairman Igor Sechin is a close aide to Putin.
In a Kremlin defined by loyalty to Putin, Illarionov's remarks increasingly raised eyebrows. He was stripped of his duties as G8 sherpa in early 2005, according to a presidential decree.
Illarionov said Russia could not take full part in G8 meetings because its currency was not convertible and because it was not a member of the World Trade Organisation.
"After YUKOS and the start of the campaign of mass nationalisations of private property, participation in the financial G8 became impossible," Illarionov said.
He said it was unlikely Russia would be kicked out of the G8, but added: "There is a serious dilemma: to go to the summit is bad but to not go to the summit is undesirable. And a refusal to go to St Petersburg would be taken as a slap in the face."

((Writing by Guy Faulconbridge; editing by Myra MacDonald; e-mail: guy.faulconbridge@reuters.com, +7 495 775 12 42))