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KAI RYSSDAL: G-8 leaders are probably wishing they'd picked last weekend to have their big meeting in St. Petersburg. Now, instead of energy security and Third World debt, President Bush and the gang will be spending a good amount of time on the Middle East. This is the first time the G8's been held in Russia. And Stephen Beard reports from the Marketplace European Desk in London, the Russians are really looking forward to it.

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STEPHEN BEARD: The Russians are in buoyant mood. Hosting the summit shows that Russia matters again, that the years of economic collapse and political chaos are well and truly over. Nick Redman of the Economist Intelligence Unit:

NICK REDMAN: Russia is the most powerful, the most influential it's been in 10 years, 15 years, 20 years.

The soaring price of oil has transformed the Russian economy. The country's paid off much of its foreign debt. And diplomatically it's now the Americans that are coming cap-in-hand to Russia.

REDMAN: It's the Americans that need Russian cooperation in order to make some progress on North Korea, on Iran. If you look from the point of view of the Russian society, they certainly feel they are worthy of a place at the top table.

But, say the critics, a dictatorial figure like Putin should not preside over a club of democratic free market nations. Boris Berezovski is a Russian billionaire who now lives in exile in London. He says Putin's Russia isn't fit to host the summit:

BORIS BEREZOVSKI: We don't have an indepednent parliament today. Parliament 100% under contol of Kremlin. And we don't have more independent business. Business completely under control of state.

He cites the YUKOS oil company — broken up on Putin's orders, sold on the cheap to the state-owned Rosneft. But after Rosneft IPO'd, western banks in London today were happily dealing in the shares.

Financial markets, like those western leaders gathered in St Petersburg, have clearly bought into Putin's brand of Kremlin-controlled capitalism.

In London, this is Stephen Beard for Marketplace.