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Putin seeks to ease fears over Russian economic crisis Putin seeks to ease fears over Russian economic crisis
(35 minutes later)
President Vladimir Putin has sought to ease fears over Russia's economy, insisting that the dramatic fall in the rouble will stabilise.President Vladimir Putin has sought to ease fears over Russia's economy, insisting that the dramatic fall in the rouble will stabilise.
He is currently holding his annual end-of-year news conference. Speaking at his end-of-year news conference, which lasted over three hours, he blamed "outside factors" for the currency hitting an all-time low.
Mr Putin blamed "outside factors" for the falling rouble, which hit an all-time low this week, but admitted the central bank could have acted sooner. But he admitted Russia's central bank could have acted more swiftly.
Russia is on the verge of recession due to falling oil prices and sanctions over its role in the Ukraine crisis.Russia is on the verge of recession due to falling oil prices and sanctions over its role in the Ukraine crisis.
However, the president denied pursuing an "aggressive" foreign policy and accused the US and EU of conspiring to weaken Russia.
'Growth inevitable''Growth inevitable'
Mr Putin accepted Russia had failed to diversify its economy for the past two decades and relied too heavily on its oil and gas exports.Mr Putin accepted Russia had failed to diversify its economy for the past two decades and relied too heavily on its oil and gas exports.
But he insisted the nation's currency reserves were sufficient to keep the economy stable, saying the central bank should not "burn" its $419bn reserves.But he insisted the nation's currency reserves were sufficient to keep the economy stable, saying the central bank should not "burn" its $419bn reserves.
"I don't believe you can call it a crisis - you can call it what you like," he told a packed conference hall."I don't believe you can call it a crisis - you can call it what you like," he told a packed conference hall.
If the economic problems persisted, he said, the government would have to "reduce social spending and future growth".If the economic problems persisted, he said, the government would have to "reduce social spending and future growth".
But he added: "Our economy will get out of this crisis. How long? Maybe two years, but after that, growth is inevitable."But he added: "Our economy will get out of this crisis. How long? Maybe two years, but after that, growth is inevitable."
Mr Putin estimated that Western sanctions had accounted for roughly 25-30% of the rouble's troubles.
The BBC's Sarah Rainsford in Moscow says President Putin is trying to calm Russian fears about their future and calm the markets.
Although the rouble strengthened on Thursday morning, it has taken a battering in recent days.Although the rouble strengthened on Thursday morning, it has taken a battering in recent days.
On Tuesday, the central bank was forced to reassure banks and financial companies that it would provide additional capital if necessary. The currency's collapse came after a drastic 6.5 percentage point rise in Russian interest rates to 17%.
The rouble's collapse came after a drastic 6.5 percentage point rise in Russian interest rates to 17%.
Earlier this week, there were reports of Russians flocking to the shops to spend their cash before prices shoot back up. Many were said to be buying cars and home appliances.Earlier this week, there were reports of Russians flocking to the shops to spend their cash before prices shoot back up. Many were said to be buying cars and home appliances.
Ukraine talks Analysis: John Simpson, BBC News, Moscow
Russia has been hit by Western sanctions, put in place after President Putin annexed Crimea from Ukraine in March. President Putin gave a bravura performance, speaking frankly without notes, and accepting questions even from Russian and foreign journalists known for their hostility to him.
He wanted to calm fears about the fall of the rouble, and about pensions and living standards. At worst, he said, the problem would last two years.
I asked him about Western fears that he was stoking up a new Cold War. Now the Russian currency was in trouble, I said, he might need Western help.
So I asked if he would take this opportunity to say he didn't want a Cold War and would work to solve the Ukraine problem. He answered at length - but it was noticeable he didn't take advantage of the opportunity to calm things down.
Mr Putin estimated that Western sanctions, put in place after Russia annexed Crimea from Ukraine in March, had accounted for roughly 25-30% of the rouble's troubles.
On Ukraine, President Putin said he was hopeful the conflict could be solved through peace talks.On Ukraine, President Putin said he was hopeful the conflict could be solved through peace talks.
He urged the Ukrainian government and pro-Russian rebels in the east of the country to conduct a quick "all for all" prisoner swap before Christmas.He urged the Ukrainian government and pro-Russian rebels in the east of the country to conduct a quick "all for all" prisoner swap before Christmas.
Ukraine and the West accuse Mr Putin of sending Russian troops to fight with the rebels, but the Kremlin denies the allegations.Ukraine and the West accuse Mr Putin of sending Russian troops to fight with the rebels, but the Kremlin denies the allegations.
US President Barack Obama is expected to sign legislation this week authorising new economic sanctions on Russia. 'Western hypocrisy'
Later on Thursday, European leaders are also expected to approve further sanctions against Russia, with a ban on investment in Crimea and oil and gas exploration in the Black Sea likely targets. Responding to a question from the BBC's John Simpson, Mr Putin said Russia was "not aggressive or encroaching on anyone's interests - just protecting our own."
He also accused the US of hypocrisy, saying that Russia has just two military bases outside its borders while there are American bases "all over the world".
Meanwhile, the EU approved further sanctions against Russia on Thursday. They target investment in Crimea and oil and gas exploration in the Black Sea and come into force on Saturday.
"We are doing this because the EU has said the annexation [of Crimea] is illegal and what we're doing is part of implementation of non-recognition of this policy by Russia," EU spokeswoman Maja Kocijancic told reporters.
Later on Thursday, European leaders will meet in Brussels for their last summit of 2014 to discuss the Ukraine crisis and relations with Russia.
US President Barack Obama is also expected to sign legislation this week authorising new economic sanctions on Russia.