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The collapse in Russia's rouble slows for a while, but fears of how the crisis will hit not only Moscow but its trade partners are deepening. As Ciara Lee reports, the repercussions could be felt far and wide.
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Russian President Vladimir Putin speaks during his annual press conference in Moscow on Dec. 18.(Photo: AFP/Getty Images)
MOSCOW — Russian President Vladimir Putin addressed his nation Thursday amid the worst economic crisis of his 15-year reign. He blamed "external factors" for the current woes and said recovery is about two years away.
Putin faced his public amid a plunging oil price, sanctions from the West over his actions in Ukraine and a ruble currency that has lost more than half of its value in recent months.
As the news conference took place — it lasted just over three hours — the ruble moved lower against the dollar. Earlier it gained 1%. Russia's benchmark MICEX index rallied by 5.5%.
"Our economy will overcome the current situation. How much time will be needed for that? Under the most unfavorable circumstances I think it will take about two years," he said.
"The current situation has been provoked by external factors, but it's worth noting that we haven't done what we planned to do to diversify our economy," Putin said, adding that the ruble would stabilize. He said that sanctions were responsible for up to 30% of Russia's economic crisis, but defended his annexation of Crimea.
The European Union banned investment in Crimea on Thursday as part of fresh sanctions and Washington may impose further measures this week.
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Putin rejected the idea that Russian firms would be forced to sell their foreign currency reserves to help prop up the ruble and said Russia's central bank had sufficient reserves — $419 billion — to keep the economy stable.
An Associated Press-NORC Center for Public Affairs Research poll released Thursday found that about 80% of Russians still support the president despite slipping confidence in the economy. Forecasters say that Russia's economy next year will move into recession and inflation may hit 25%.
Speaking about Ukraine, Putin said that country must remain one political entity. He urged Ukrainian President Petro's government to grant amnesty to pro-Russian rebels operating in eastern Ukraine. He accused the West of trying to infringe on Russia's sovereignty, adding that the Ukrainian crisis was just a pretext for Western action.
"Sometimes I think, maybe they'll (the West) let the bear eat berries and honey in the forest, maybe they will leave it in peace," said Putin, using a metaphor to refer to Russia's famed symbol. "They will not. Because they will always try to put him on a chain, and as soon as they succeed in doing so they tear out his fangs and his claws."
In reply to a question, Putin said "We are not attacking anyone, we are not warmongers."
Ahead of the speech, Russian tycoon Vladimir Yevtushenkov was released from house arrest in a move that echoed Putin's freeing of businessman Mikhail Khodorkovsky when he gave his address last year.
USA TODAY
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Contributing: Hjelmgaard from reported London; Associated Press
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