World

Putin: Russia's economic crisis will pass (in two years)

In this photo taken on Saturday, Nov. 15, 2014, Russian President Vladimir Putin speaks to the media before departing from the G-20 summit in Brisbane, Australia. Russian President Vladimir Putin made an early exit on Sunday from a two-day summit of world leaders where he was roundly criticized over Russia's escalating aggression in Ukraine, but brushed off suggestions that he had felt pressured. (AP Photo/RIA-Novosti, Mikhail Klimentyev, Presidential Press Service)
In this photo taken on Saturday, Nov. 15, 2014, Russian President Vladimir Putin speaks to the media before departing from the G-20 summit in Brisbane, Australia. Russian President Vladimir Putin made an early exit on Sunday from a two-day summit of world leaders where he was roundly criticized over Russia's escalating aggression in Ukraine, but brushed off suggestions that he had felt pressured. (AP Photo/RIA-Novosti, Mikhail Klimentyev, Presidential Press Service) AP

During his annual press conference from Moscow, Russian President Vladimir Putin noted that while plummeting oil prices and a freefalling ruble are reasons for concern, the current economic crisis will pass, and Russia would be ready to move forward.

Russia, he noted, would stand firm in the face of the crisis and intensive western pressure. The west, and especially the United States, he insisted, remains locked into old Cold War rivalries and seeks to destroy his nation.

While his words had the cowboy swagger of “tough times pass, tough people don’t” the normally uber confident president, whose body language and smirks often convey a cocky arrogance, looked a bit sheepish during this appearance. He spoke before a packed auditorium that included Russian and international press, and quite a few Russians who used the television cameras and hand-held placards to advertise their newspapers. Putin’s eyes were often downcast, not challenging, during some statements and answers to press questions.

Russia’s Economics Minister Alexey Ulyukayev during an interview with Vedomosti (a sister publication of The Financial Times) appeared to break from Putin’s narrative on the economy, blaming the crisis entirely on the Russian government, or “delayed reforms and everything we did not do.”

“We did this to ourselves,” he told the newspaper.

The fact that oil prices have dropped from more than $110 a barrel to less than $60 a barrel in recent weeks is the immediate cause of the crisis, which has seen the value of the ruble halved.

Putin’s opening remarks noted the failure of Russia to become more than a Petrostate.

“We have failed in the past 20 years to diversify our economy,” he admitted, referring to Russian history since the collapse of the Soviet Union, which has relied almost completely on oil and gas revenue. Later, he added, “Our economy will recover from this crisis. The question is when.”

But he praised the Russian Central Bank for taking the right steps in raising interest rates to 17 percent earlier this week, though noted their smart actions could have been a little quicker. He said two years was the outside guess for a Russian recovery, though he was hoping for a turnaround by the middle of 2015.

This being a Putin press conference, it wasn’t all introspective, of course.

He appeared to blame western powers for everything from the Chechen rebellion that began in 1994 to diminishing the sheen of the Sochi Olympics earlier this year.

When asked if, 25 years after the fall of the Berlin Wall, there was the risk of another wall being erected between east and west, he claimed that all Russia has wanted since the fall of the Berlin Wall is a Europe without divisions, and with peace.

But, he noted, western powers have been unwilling to share this vision.

“We were told after the Berlin Wall that there would be no further expansion to the east,” he said. “But there was expansion. Our partners did not stop building walls especially the United States.”

He made these statements less than a year after seizing control of Crimea, Ukraine’s Black Sea peninsula and while a combination of Russian military and Russian-backed Ukrainian separatist forces continue to wage a war for independence in two southeastern Ukrainian states, the Donetsk and Luhansk oblasts, collectively called Donbas.

Putin said Russian fighters in Ukraine were not mercenaries, as they are not being paid. Instead, he said, “they are following the call of their heart.”

In answer to a question about Ukraine, Putin went on to note that the crisis there needs a political solution, and not a military or even an economic one. In the past, Putin frequently has blamed what he calls the nationalist “Bandera” factions in Kiev, threatening to return Nazi-style rule to Europe. Yet in recent months, European newspapers have reported that Putin, through Russian banks, has been funding nationalist political parties throughout Europe, including the Front National in France.

When asked if this economic crisis might have its roots in the internationally unrecognized annexation of Crimea, Putin noted that international sanctions are responsible for about 25 percent of the ruble’s decline. Still, he said, it was wrong to draw that conclusion.

“This is not paying for Crimea,” he said. “This is paying for our desire to remain an independent state.”

Claudia Himmelreich contributed to this story from Berlin.

  Comments