With Russia's economy in tatters, Putin faces tough questions at annual press conference



Russian President Vladimir Putin speaks to journalists during his annual press conference on Thursday, Dec. 18.
KIEV, Ukraine — Russian President Vladimir Putin faced difficult questions from the media at his annual marathon press conference Thursday in Moscow amid the country’s worst economic crisis since the 1998 default.
European and U.S. sanctions against Russia over Putin’s invasion and annexation of Crimea, and his political and military support to pro-Russian separatists in eastern Ukraine — along with the plunging price of oil — have thrust Russia’s economy into a downward spiral.
It’s currency, the ruble, plummeted to historic lows against the dollar this week faster than you could say “Vladimir Vladimirovich.” Not even extraordinary intervention by Russia’s central bank and finance ministry could halt its slide.
Meanwhile, consumers across the country are going on shopping sprees to spend their rubles before their value plunges further.
Russian banks and companies are looking at more than $100 billion in foreign currency debt payments next year, a grim reminder that there might be worse to come still.
Timothy Ash, an analyst at Standard Bank in London, said he had never seen anything like what is happening. "The most incredible currency collapse I think I have ever seen in the 17 years in the market, and 26 years covering Russia/CIS," he wrote in a note this week.
Against that backdrop, the Russian president, his grip on power threatened by what could explode into all-out crisis, faced 1,259 eager reporters looking for answers.
The press conference was hyped by state media as the event of the year with a Hollywood-style action trailer complete with a soundtrack of dramatic music punctuated by explosions.

Making light of the situation, a Putin parody account on Twitter encouraged viewers to play a game of bingo during the press conference.

Putin on the economy

But there was no joking inside the conference hall, as Putin opened Thursday’s question and answer session speaking about the country's dire economic situation.
He was optimistic that the Russian economy would quickly rebound, along with the global economy. The global economy will grow and the Russian economy will overcome the current situation. "About 2 years is needed for that, given the current scenario," he said.
“After that, further growth imminent,” he added.
In the meantime, Putin said that Russia can do more to diversify its economy. Oil prices will likely continue to fall, he said. Putin said he planned to use 2008 crisis measures, “which were successful,” to fix the economy.
On the ruble’s staggering fall, the president suggested oil prices and Western sanctions were to blame. "Today's situation is provoked by external factors foremost," he said.
He said he backs the government's measures taken earlier this week to strengthen the ruble, but he has "questions" about how quickly the central bank and finance ministry acted.
Falling ruble

A Russian man walks out of a currency exchange in Moscow on Dec. 16. The illuminated board displays the rise in prices for dollars and euros as the ruble plummets.
IMAGE: EVGENY FELDMAN

On the Ukraine conflict

Prompted by a Ukrainian journalist, Putin discussed the conflict still raging in eastern Ukraine. Asked about the presence of Russian troops and mercenaries fighting in the nine-month war, Putin ceded no ground.
"Everyone fighting in south-east Ukraine is not a mercenary, because they are not paid," he said. He avoided the journalist's question about Russian soldiers in Ukraine.

Russian troops in Ukraine?


A Ukrainian journalist asks Putin about the presence of Russian troops and mercenaries fighting in eastern Ukraine.

More than 4,000 people have been killed and nearly a million have been displaced in the country’s Donetsk and Luhansk regions since the onslaught of the conflict between Ukrainian forces and pro-Russian separatists in mid-April. The West has accused Russia of supporting the separatists with cash and guns. Kiev has said up to 10,000 Russian troops are on the ground in the east. Moscow has repeatedly denied the allegations.
As for a solution to the conflict, Putin said he “of course wants to achieve a resolution,” and believes his Ukrainian counterpart, Petro Poroshenko also wants this.
“But the Minsk agreements need to be put into place,” he said, referring to the meetings between Ukrainian, Russian and separatist representatives in the Belarusian capital, where they agreed to a cease-fire in September. The sides have discussed the possibility of meeting again on Sunday to discuss the fragile truce, which has largely not held.
Putin knocked Ukraine’s central government in Kiev for continuing with its “punitive” military operation in the east. He also slammed them for coming to power through “force” rather than through political discourse. Russia has painted the new authorities in Kiev as a “junta” full of “fascists and neo-Nazis.”
"The problem is that after the coup d’etat... a forceful overthrow, instead of starting a political dialogue, the new authorities started using law enforcement officers, when that didn’t work out they started using the army, when that didn’t work out they started using other means, such as an economic blockade."
Putin presser

Russian President Vladimir Putin enters the conference hall ahead of his annual press conference with journalists on Thursday, Dec. 18.
IMAGE: EVGENY FELDMAN




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