Putin says foes hope to dismember Russia; rouble falls as he speaks
MOSCOW - President Vladimir Putin accused Russia's enemies on Thursday of seeking to carve it up and destroy its economy to punish it for growing strong, in an annual state of the union speech that seemed to outdo even his own recent strident nationalism.
The Kremlin leader trumpeted his annexation of Ukraine's Crimea peninsula, praised the Russian people for their strength, accused the West of "pure cynicism" in Ukraine and said economic sanctions must drive Russians to develop their own economy.
The rouble fell as he spoke to an ornate hall packed with dignitaries, delivering a speech that showed no sign of turning back from policies that have brought his country to confrontation with the West unseen since the Cold War.
Russia's "enemies of yesterday" wished on it the same fate as Yugoslavia in the 1990s, he said in the speech, which ran for more than an hour and was interrupted repeatedly by applause.
"There is no doubt they would have loved to see the Yugoslavia scenario of collapse and dismemberment for us - with all the tragic consequences it would have for the peoples of Russia. This has not happened. We did not allow it," he said.
So determined was the West to destroy Russia, he said, that sanctions would have been imposed even without the crisis in Ukraine.
"I am certain that if all this did not take place... they would come up with another reason to contain Russia's growing capabilities," he said. "Whenever anyone thinks Russia has become strong, they resort to this instrument."
Even when he pledged to keep Russia open to the world, he adopted an aggressive posture: "We will never pursue the path of self-isolation, xenophobia, suspicion and search for enemies. All this is a manifestation of weakness, while we are strong and self-confident."
UNDER PRESSURE OVER THE ECONOMY
The Russian leader is under pressure to show he has an answer for Russia's worsening economy, with sanctions and the falling price of energy exports sending the rouble into a tailspin, culminating in an acknowledgment this week by the government that the country is headed for recession.
He promised an amnesty for capital repatriated to the country, saying that Russians who chose to bring money back would face no questions over how they earned it. Money from a national wealth fund would be used to support domestic banks.
But his economic remarks were overshadowed by the aggressive posture he adopted at the opening of his address, in which he described Russia as in serious danger, surrounded by enemies who sought its destruction.
He said Crimea, which his troops seized and Russia then annexed after a pro-Russian president was toppled in a popular revolt in Kiev, held sacred meaning for Russians, forever.
Russia was justified in intervening in Ukraine because the West had supported a "coup" in Kiev. The war that has followed in the southeast, in which heavily armed Moscow-backed separatists have seized a region they now call "New Russia", proved Moscow's policy was right.
"How can one support an armed seizure of power, violence, murder?... How can one support the attempts that followed to suppress with the help of armed forces the people in the southeast who did not agree with this lawlessness? ... This is pure cynicism."
Putin's popularity ratings are still sky high and he has not faced any big protests over the economic decline, but questions are being asked about whether he has a plan to pull the $1.4 trillion economy out of crisis.
The rouble's stability had hitherto been the crowning achievement of 14 years in power for Putin, 62, who was elevated to the Kremlin in the wake of a currency collapse and default that destroyed the savings of Russians in 1998.
He owes much of his popularity to the comparison between the stability of his rule and the chaos of the 1990s, when the post-Soviet economy was eviscerated by hyperinflation.
But the currency has already lost a third of its value this year, the fall in oil prices has blown a hole in state finances, and Russian companies and banks are scrambling to find dollars to pay foreign debts.
"The greatest danger for the president is the economy, under the double pressure of sanctions and falling oil prices," commentator Kirill Rogov wrote in the business daily Vedomosti, which said this week the economy was seriously ill and Russia's leaders were refusing to admit it or do anything about it.
Putin has diverted attention from the economy by whipping up patriotism, including by annexing the Crimea peninsula, and blaming the United States and the European Union for many of Russia's problems as well as the crisis in Ukraine.
US President Barack Obama has said the tough economic situation could eventually help change Putin's course in other areas.
Capital flight is expected to soar far above $100 billion this year and some analysts expect capital controls though the government denies this.