(MENAFN- The Peninsula) President Vladimir Putin (pictured) assured Russians yesterday that the economy would rebound after the rouble's dramatic slide this year but offered no remedy for a deepening financial crisis.
Defiant and confident at a three-hour news conference, Putin blamed the economic problems on external factors and said the crisis over Ukraine was caused by the West, which he accused of building a "virtual" Berlin Wall to contain Russia. At times sneering, at others cracking jokes, he ignored pressure to say how he will fix an economy facing what his economy minister calls a "perfect storm" of low oil prices, Western sanctions over Ukraine and global financial problems.
The rouble has fallen about 45 percent against the dollar this year, and suffered particularly steep falls on Monday and Tuesday, but Putin refused to call it a crisis and said it would eventually rise again. "If the situation develops unfavourably, we will have to amend our plans. Beyond doubt, we will have to cut some (spending). But a positive turn and emergence from the current situation are inevitable," Putin said in comments to a packed conference centre that were broadcast live to the nation.
Although he said the recovery might take two years, much will depend on how long the West maintains sanctions on Russia over its role in the Ukraine crisis.
European Union diplomats said the 28-nation bloc would ban investment in Crimea from Saturday over Russia's annexation of the Black Sea peninsula and President Barack Obama is set to sign legislation authorising new US sanctions. But Putin showed no sign of heeding a call by EU foreign policy chief Federica Mogherini for "a radical change in attitude towards the rest of the world and to switch to a cooperative mode".
Sitting at a big desk in front of two large screens showing close-ups of his face, a white mug with a presidential crest on beside him, Putin appeared mainly intent on showing Russians he is in command and will not kow-tow to the West. He said Russia must diversify its economy to reduce dependence on oil, its major export and a key source of state income, but he gave no details and has said many times during 15 years in power that he will do this.
The rouble slipped as he spoke, and was about 2 percent weaker against the dollar on the day. The central bank increased its key lending rate by 6.5 percentage points to 17 percent on Tuesday, and has spent more than $80bn trying to shore up the rouble this year, but to little avail.
Although Putin said the central bank and government had acted "adequately", he chided the bank for not halting foreign exchange interventions sooner, suggesting more decisive action might have made this week's big rate rise unnecessary.
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