Putin eyes benefits as rebels gain in Ukraine

Putin eyes benefits as rebels gain in Ukraine
Russian President Vladimir Putin speaks during his annual end-of-year news conference in Moscow, in this December 18, 2014 file photo.

MOSCOW - Boxed into a corner by a financial crisis and the West's refusal to drop sanctions over the conflict in Ukraine, Russian President Vladimir Putin has come out fighting.

After a relative lull in the conflict in east Ukraine since a ceasefire deal was reached last September, separatists have launched a new offensive. Kiev says the rebels are supported by 9,000 Russian soldiers.

Moscow has denied sending in troops and weapons, blamed the renewed violence on Kiev and regretted the deaths of civilians, but done nothing to distance itself from the rebel cause.

Whether or not the separatists are acting on Moscow's orders, battlefield setbacks for Ukrainian government forces may be seen by Putin as offering hope of negotiating from a position of strength over the conflict.

The former KGB officer may think he has no choice - showing any sign of weakness could be politically disastrous for him in Russia.

"Putin has nowhere to retreat to. For Putin, a retreat or a step back would mean a drop in his ratings and a rise in public discontent," said Olesya Yakhno, an independent political commentator in Kiev.

"The main thing for Putin is that discontent does not grow among his supporters. His supporters demand new territorial gains and any step back would be seen by them as a defeat."

Far from being cowed by Russia's economic crisis, aggravated by the sanctions and a fall in the oil price, Putin has been as defiant as ever against the West as it became clear it had no plans to ease the economic pressure.

Allies say such a stance will help Putin remain popular despite predictions that public discontent will grow as prices rise during the financial crisis.

"When a Russian feels foreign pressure, he will never give up his leader," First Deputy Prime Minister Igor Shuvalov told the World Economic Forum in the Swiss resort of Davos last week, promising Russians would "eat less food, use less electricity".

Officials sent similar signals of defiance by dismissing a decision by S&P ratings agency to cut Russia's sovereign debt rating to "junk" status, with Putin's spokesman describing such moves as "politically motivated".

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