Putin warns of ‘hard times’ in state-of-the nation address

In his state-of-the nation address to parliament at the Grand Kremlin Palace in Moscow, Russian President Vladimir Putin warned of hard times to come, and stressed the need for more self-reliance.

Declining oil prices, rising inflation and economic sanctions imposed by the EU, US and other allies have weighed heavily on the Russian economy, which is likely to contract next year. The Russian government warned earlier this week that there will be a recession in 2015.

The ruble, a currency Mr. Putin once boasted as the flagship of the country’s economic stability, hit an all-time low this week, after declining by more than 35% since the beginning of this year.

Mr. Putin told his lawmakers that Western nations are conspiring to raise a new “iron curtain” to isolate Russia.

Observers had wondered whether the president might take a more conciliatory tone in his annual speech today. What they heard was a fierce and uncompromising attack.

He defended Russia’s annexation of Crimea, describing the territory as having a “sacred meaning” for his country.

Presidential Address to the Federal Assembly.Photo: “Presidential Address to the Federal Assembly,” President of Russia website.

To the surprise of many in the rest of the world, he said the “tragedy” in the south-east of Ukraine was living proof that Russia had taken the right policy. He added that Russia will respect its neighbor as any brotherly country should.

If recent events in Crimea had not occurred, Mr. Putin said the West would simply have dug around for another excuse to impose sanctions and contain Russia.

Mr. Putin said:

“For some European countries, national pride is seen as a luxury, but for Russia it is a necessity. The policy of containment was not invented yesterday. It has been applied to our country for many, many years.”

“Every time when anyone only thinks Russia has become strong, independent, such instruments are applied immediately.”

US Secretary of State, John Kerry, said in response to Mr. Putin’s speech:

“No-one gains from this confrontation. It is not our design or desire that we see a Russia isolated through its own actions.”

Mr. Kerry, who was in Basel, Switzerland today, said Russia could regain trust by withdrawing military support for rebel separatists.

In his attempt to get people to bring their money back from abroad, Mr. Putin said Russia would introduce an amnesty on capital repatriation. The country is suffering from record levels of capital flight.

Capital flight is when people move their money out of a country in huge amounts.

Transcript of Mr. Putin’s Speech (scroll down a few paragraphs to find it).