Putin strikes defiant note against the West but offers few major reforms for economic woes



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In an annual speech ranging from economy to school tests, Russian President Vladimir Putin on Thursday evoked religious imagery and defended the Kremlin's aggressive foreign policy as necessary for his country's sheer survival. (Dec. 4)

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MOSCOW — Russia will defend its geopolitical interests, President Vladimir Putin warned Thursday as he promised economic reforms to pull his country back from the brink of recession. But Putin's patriotic bluster and vague promises did little to assuage real fears that Western sanctions, plummeting oil prices and a collapsing ruble are crippling Russia's economy.

In his annual state-of-the-nation address at the Grand Kremlin Palace, Putin announced measures to spur the country's flagging economy, which is set to enter recession in 2015 for the first time in six years.

"The quality and size of the Russian economy must correspond to our geopolitical and historical role," Putin said. "We must get out of this zero-growth trap and in the next three or four years raise our growth to above-average global levels."

Putin proposed a three-year freeze on tax inspections for companies as well as a tax amnesty for money brought back to Russia from abroad. But in a disappointment to investors, he offered no broader plan for pulling Russia out of its economic downturn.

"His freedom of maneuver is limited now and many important economic factors no longer depend on him: the ruble rate, the price of oil, inflation," said Moscow-based analyst Maria Lipman. "No matter what Putin says, whether he sounds conciliatory and reassuring or bellicose and threatening, this would not affect those basic factors."

Putin spent much of his speech blaming his country's economic woes on the West, which he accused of wanting to dismember Russia like Yugoslavia, which broke up amid wars in the 1990s. Putin said the United States and Europe would have imposed sanctions and found other pretexts for holding Russia back even if tensions had not erupted in Ukraine this year.

"The politics of containment were not invented yesterday. ... The more we retreat and justify ourselves, the more brazen our opponents become and the more cynically and aggressively they behave," Putin said, adding that "no one will succeed in defeating Russia militarily."

He blamed the volatility of the ruble, which has lost about 40 percent of its value against the dollar this year, on speculators, and praised the Russian central bank's decision to allow the currency to float freely. The ruble fell further as he spoke.

He skimmed over more concrete issues affecting Russian consumers, such as the rapid rise in prices and an expected decline in living standards, instead portraying the difficulties as a necessary part of Russia's patriotic struggle.

"This year, as in many fateful historical moments, our people clearly displayed national revival, firm resistance and patriotism," Putin said. "And the difficulties we encountered will create new opportunities for us. We are ready to accept any challenge of our time and be victorious."

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