Putin Backs Recovery As Rouble Falls Again

Vladimir Putin has predicted Russia will recover from its current financial crisis in two years or less.

The Russian President said his country had sufficient reserves and the economy would rebound quickly.

He was speaking at his annual end-of-year media conference as the rouble lost more ground against the dollar and the euro.

But Mr Putin said that even "under the most unfavourable world conditions, such a situation can last two years".

"It could improve earlier too," he added.

Mr Putin blamed the crisis on "external economic factors... mainly the price of oil and gas" and pledged to help those in most need.

"I think the central bank and the government are taking adequate measures," he said.

"If the situation develops unfavourably, we will have to amend our plans.

"Beyond a doubt, we will have to cut some (spending). But a positive turn and an exit from the current situation are unavoidable."

He said Western sanctions, imposed over Ukraine, have not had a big effect and accused the West of behaving like "an empire" and treating other countries like its vassals.

He also accused the West of trying to "chain" the Russian bear.

"Probably our bear should just relax and sit quietly and just eat honey instead of hunting animals. Maybe then they will leave the bear in peace," he said.

"But they will not. What they are trying to do is chain the bear and when they manage to chain the bear they will just take out its fangs and claws."

The slump in the rouble has largely been attributed to the global fall in oil prices and the impact of the Western sanctions.

Some observers also blame a lack of economic strategy by Mr Putin during his 15 years in power.

At one point the currency was more than 2% weaker on the day despite efforts by the central bank to prop it up by increasing its rate of interest to 17%.

Until now the Kremlin has remained silent on the issue of the rouble's crash, which took it to historic lows of 80 to the dollar and 100 to the euro.

It has fallen in value by 60% since January and Russians have been cashing in their savings and rushing to buy expensive goods ahead of expected price hikes.

During his speech, Mr Putin made it clear that his position on Ukraine had not changed, describing Kiev's attempt to crush the pro-Russian separatist uprising in the east was a "punitive operation".

But he said he wanted a political solution to the crisis.

"It should be solved through political measures, not with the pressure... of an economic blockade or the use of armed forces," he said.

The EU, meanwhile, has dealt another blow to the economy by imposing additional sanctions on Crimea, banning all investment and restricting trade.

It says the move is to underline the message it will not recognise Russia's "illegal annexation" of Ukrainian territory.