This article is from the source 'washpo' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.washingtonpost.com/world/putin-predicts-economy-recover-in-two-years/2014/12/18/6b81bb70-8689-11e4-9534-f79a23c40e6c_story.html?wprss=rss_world

The article has changed 7 times. There is an RSS feed of changes available.

Version 4 Version 5
Putin predicts economic recovery but warns West against pressuring Russian ‘bear’ Putin predicts economic recovery but warns West against pressuring Russian ‘bear’
(about 4 hours later)
MOSCOW —Russian President Vladimir Putin, under pressure to show a path out of the country’s economic misery, predicted Thursday a recovery in two years despite mounting bad news: a looming recession, a severely weakened ruble and growing fears about the financial instability. MOSCOW — Vowing that the West would never hold Russia down, Russian President Vladimir Putin on Thursday promised that his nation’s troubled economy would recover in two years despite a looming recession, a severely weakened ruble and growing fears about economic instability.
While Russia’s economic storms dominated Putin’s annual year-end news conference, Putin thrashed his way through an array of other topics — at times combative, wry and evasive — as he fielded questions from the national and foreign media. In an annual year-end news conference, Putin defiantly blamed Russia’s turmoil on the West, saying that it was targeting his nation as part of a long-standing geopolitical effort to limit Moscow’s influence. He appeared to be entrenching for years of conflict with the West, even as he sounded slightly more conciliatory about fostering peace in eastern Ukraine.
It was, in many ways, a highlight reel of his biggest challenges of the year. But attention always circled back to Russia’s deepening fiscal quagmire, which has pushed Putin into an uncomfortable role as crisis manager. He said that the nation had grown too dependent on easy profits from oil revenues and that the current crisis was an opportunity to diversify. But he offered few proposals to do so.
He defended Russia’s annexation of Crimea and Moscow’s policies in Ukraine’s conflict, and blasted the West for its sanctions in return. He defiantly described Russia as a bear that cannot be chained, yet playfully noted that leaders make mistakes and dodged questions over whether he will seek re-election in 2018. In a measure of just how steep the challenges are , even journalists from media outlets close to the Kremlin were questioning Russian policy on Thursday. But Putin ducked, weaved and offered few regrets about the most turbulent year of his decade-and-a-half in power.
But attention always circled back to the Russia’s deepening fiscal quagmire, which has pushed Putin into an uncomfortable role as crisis manager. “The only thing we have done is defend our interests,” Putin said.
Putin’s news conference came as Russia suffers through its most serious economic downturn since a 1998 meltdown shortly before Putin’s rise to political power. The current troubles also represent a major test for Putin, whose reputation is largely built on safeguarding Russia’s strength and stability.
“Rates of growth may be slowing down, but the economy will still grow and our economy will overcome the current situation,” Putin said at the televised news conference. “I believe about two years is the worst-case scenario. After that, I believe growth is imminent.”
The ruble has been on a steady downward trajectory for months, fueled by falling oil prices — Russia’s main export — and Western economic sanctions over Russia’s involvement in neighboring Ukraine.The ruble has been on a steady downward trajectory for months, fueled by falling oil prices — Russia’s main export — and Western economic sanctions over Russia’s involvement in neighboring Ukraine.
In the past week, however, the ruble has faced wild swings in value. Exchange rates peaked at almost 80 rubles to the dollar Tuesday after the central bank dramatically raised interest rates. In the past week, however, the ruble has undergone wild swings in value. Exchange rates peaked at almost 80 rubles to the dollar Tuesday after the central bank dramatically raised interest rates.
The ruble lost more ground Thursday despite central bank action to shore up the currency, which is around 45 percent down against the U.S. dollar this year. On Thursday, the currency was generally flat, suggesting that Russians were neither spooked nor mollified by the questioning, which lasted for three hours and 10 minutes in a hall of more than 1,200 journalists. The ruble settled near 62 to the dollar, better than it was at the beginning of the week but still 46 percent lower than at the beginning of the year.
A weakened currency drives up prices, makes it harder for companies to repay loans that were taken out in dollars or euros, and waters down Russians’ savings. A weakened currency drives up prices, makes it harder for companies to repay loans that were taken out in dollars or euros, and diminishes Russians’ savings.
Putin had been silent as the currency collapsed this week. On Thursday, he acknowledged partly that Russia had helped to lay the groundwork for the current crisis by failing to diversify the economy. The Russian central bank predicted a 4.8 percent contraction next year if oil remains at current prices — but that was before the bank imposed a massive interest rate hike this week to 17 percent, which will further hurt growth. Fueled by fears of sanctions and Russia’s unpredictable politics, investors may have pulled up to $130 billion from the country this year, according to the central bank.
But, in general, he blamed “external factors, first and foremost” for creating Russia’s situation — accusing the West of intentionally trying to weaken Russia. “In the worst-case scenario, I believe it would take two years” to recover, Putin said at the televised news conference. “After that, growth is inevitable.”
“No matter what we do they are always against us,” Putin said, one of a series of observations directed at how he said the West has been treating Russia. Putin had been silent as the currency collapsed this week. On Thursday, he acknowledged that Russia should have diversified its economy away from energy long ago, which would have protected it against the 45 percent drop in oil prices since June. He also said that economic policymakers could have been quicker to act in recent months as pressure built on the ruble. But he said he had no plans to replace the central bank chief or other members of the cabinet.
Putin attributed Western sanctions that have targeted Russia’s defense, oil and gas and banking sectors for about “25 percent” of Russia’s current difficulties. Instead, he blamed “external factors, first and foremost” for creating Russia’s situation — accusing the West of intentionally trying to weaken Russia. He said that the fall in oil prices was the main culprit in Russia’s current economic difficulties, and that the price decline had “maybe, maybe not” come as a result of collusion between the United States and Saudi Arabia to make life difficult for Russia and Iran, two countries with large oil reserves.
But Putin stood firm over the actions that brought on the Western backlash, including Russia’s annexation of Ukraine’s Crimea peninsula and subsequent support for pro-Moscow rebels in eastern Ukraine . Putin repeated Moscow’s claim that Russia has not directly aided the rebels. Sanctions, he said, accounted for “25 to 30 percent” of Russia’s economic difficulties.
“Taking Texas from Mexico is fair, but whatever we are doing is not fair?” he said, in comments seemingly directed at the United States. The West has long tried to turn the Russian bear into a stuffed animal, he said. If the bear were to “start picking berries and eating honey,” Putin said, “someone will always try to chain him up. As soon as he’s chained they will tear out his teeth and claws.”
Putin also suggested that the West was demanding too many concessions from Russia, including further nuclear disarmament. Likening Russia to a bear — a longtime symbol of the country — he chided the West for insisting the Russian bear “just eat honey instead of hunting animals.” He defended Russia’s annexation of Crimea and Moscow’s policies in Ukraine’s conflict, and he blasted the West for its sanctions in return. He dodged a question about whether Russian troops were in eastern Ukraine.
“They are trying to chain the bear. And when they manage to chain the bear, they will take out his fangs and claws,” Putin said. “This is how nuclear deterrence is working at the moment.” But he praised Ukrainian President Petro Poroshenko, saying that the Ukrainian leader was in favor of peace. “But he is not the only one over there,” Putin said, noting that other Ukrainian officials were pushing for “a war to the end.”
The news conference was heavily promoted on Russian state television Wednesday in a 40-second trailer with images of Russian triumph against the perils of the world. He refrained from calling the Ukrainian government a “junta,” something he had done in previous months, and he also abandoned references to “Novorossiya,” or “New Russia,” the historical name for a territory that includes eastern Ukraine and was once part of the Russian Empire.
Despite the economic woes, an Associated Press-NORC Center for Public Affairs Research poll released Thursday found that some 80 percent of Russians still support him. He said that he wants eastern Ukraine to live alongside the rest of Ukraine in a unified nation, defying pro-Russian rebels’ calls to unify with Russia.
The Kremlin views the crisis not just as an economic threat but as a danger to Russia’s fundamental security. The Russian Security Council said Wednesday it had drawn up a response plan and given it to Putin to review. “We assume that a common political space will be restored,” Putin said. “It’s hard to say at this point what it would look like, but I think we should strive for this.”
The head of the council, Nikolai Patrushev, a former head of the successor agency to the KGB, did not disclose details. The body usually focuses on matters of war and peace, and it is highly unusual for it to become involved in economic policymaking. Putin’s comments appeared to do little to mollify the European Union, which imposed new trade restrictions against Crimea as he was speaking. The new sanctions ban investment in Crimea, forbid E.U. cruise ships from docking there and restrict exports of energy technology.
“The government and central bank have begun working seriously on stopping this bacchanalia on the currency market,” Putin aide Andrei Belousov told Russian news agencies after Prime Minister Dmitry Medvedev convened an emergency meeting of top economic officials and the heads of major energy companies. Amid the fiery outbursts, Putin still found time to discuss his love life. In response to a question about whether the recently divorced leader was still “Russia’s top bachelor,” he said that he had love in his life.
Putin’s press secretary on Wednesday promised “a number of measures” in coming days to fight the crisis. “Everything is in order. Don’t worry,” he said.
Russian leaders also have sounded somewhat more conciliatory toward Ukraine in recent days, perhaps in a bid to ease sanctions.
On another question, however, Putin was a moving target: whether he would run for president again when his term ends in 2018.
“I think it is too early to make any decisions about running for office or not,” Putin said, noting that it would be better to wait until the public can react to “the results of our work.”
“The head of state is always responsible for everything that has taken place in a state. I never tried to evade that responsibility,” Putin said.
But then he forgave himself: “Speaking of the mistakes I have made — people always make mistakes.”