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Putin Says Russia Must Beat Outside Pressure, Keep Sovereignty

Thursday, 29 Jan 2015 08:37 AM

Russia must overcome external pressure and protect its sovereignty, while seeking quick growth and remaining part of the global economy as it confronts the country's financial crisis, President Vladimir Putin told regional leaders.

Russia faces difficult economic and political conditions, with finance a "powerful instrument for pressure" on the country, Putin said in Moscow Thursday. He urged regional governors and heads of city administrations to "work actively" on their own anti-crisis plans in the face of budget cuts, accelerating inflation and a slump in the value of the ruble.

They must keep watch on food prices and develop concrete, not populist, plans, while nobody "should be allowed to speculate" on the crisis, Putin said. Russia should complete projects that have already been started but be very careful about beginning new ones.

The world's biggest energy exporter is on the brink of a recession after oil prices fell to the lowest since 2009 while the ruble almost halved against the dollar in the past year, as the U.S. and its allies imposed sanctions over Putin's actions in the Ukrainian conflict. Russia faces a worse crisis than in 2008-2009, First Deputy Prime Minister Igor Shuvalov said last week, as the government drew up an anti-crisis plan that envisages spending cuts of 5 percent annually in real terms for three years.

Russia will raise spending on social support and agriculture, this year while exempting defense outlays from reductions. Most other expenditures will be cut by 10 percent in 2015 as part of the government's 2.3 trillion ruble ($33 billion) stimulus program published Wednesday.

Russia's regions will have greater flexibility on tax measures and must ensure good conditions for small and medium- size businesses, Putin said. The public should be the top concern in resolving disputes, he said.

Consumer prices surged 11.4 percent from a year earlier in December, the fastest in more than five years, and may peak between 15 percent and 17 percent in March or April, according to Deputy Economy Minister Alexey Vedev. The ruble has lost 12 percent against the dollar this year, the second-worst performance among more than 170 currencies tracked by Bloomberg, after having tumbled 46 percent in 2014. It weakened 1.9 percent to 69.3290 per dollar at 3:18 p.m. in Moscow.

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Russia must overcome external pressure and protect its sovereignty, while seeking quick growth and remaining part of the global economy as it confronts the country's financial crisis, President Vladimir Putin told regional leaders.
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Thursday, 29 Jan 2015 08:37 AM
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