President Vladimir Putin vowed Thursday to fix Russia's economic woes within two years by diversifying away from its heavy reliance on oil and gas and voiced confidence that the plummeting ruble will soon recover.
He also promised never to let the West chain or defang his proud nation, evoking the symbolic Russian bear.
Speaking with strong emotion during a live news conference that lasted more than three hours, Putin displayed his traditional defiant stance toward the West, which he insisted is trying to destroy Russia to grab Siberia's great natural resources.
The annual televised production before the holidays is a Putin tradition, and this year he held it from a particularly strong vantage point: An Associated Press-NORC Center for Public Affairs Research poll shows his approval rating at a full 80 per cent.
Putin accompanied his message with trademark images of Russian pride, with video showing him surrounded by Sochi Olympic athletes, petting a baby tiger and greeting Russian cosmonauts.
In his speech, the man who has led Russia for 15 years sought to soothe market fears that the government could use administrative controls, such as fixing the ruble's rate or obliging exporters to sell hard currency, to help stabilize the battered currency.
Putin said the nation's hard currency reserves are sufficient to keep the economy in stable condition, adding that the Central Bank shouldn't aimlessly "burn" its $419 billion in reserves.
"Our economy will overcome the current situation. How much time will be needed for that? Under the most unfavorable circumstances I think it will take about two years," he said.
Putin also acknowledged that Western economic sanctions over Moscow's actions in Ukraine were just one factor behind Russia's economic crisis, estimating they accounted for roughly 25 to 30 per cent of the ruble's troubles. He said a key reason for the currency's fall was Russia's failure to ease its overwhelming dependence on oil and gas exports.
As Putin spoke, the Russian currency traded at 61 rubles to the dollar Thursday — slightly lower than Wednesday night but up 12 percent from the historic low of 80 to the dollar it hit on Tuesday. Russia's benchmark MICEX index rallied by 5.6 per cent by mid-afternoon Thursday.
Putin struck a defiant note against the United States and the European Union, saying the sanctions they slapped on Russia after it seized the Black Sea region of Crimea in March were part of a historical campaign to weaken Russia. He accused the West of trying to infringe on Russia's sovereignty, saying the Ukrainian crisis was just a pretext for Western action.
To get his point across, he brought in a famed Russian symbol — the bear.
"Sometimes I think, maybe it would be better for our bear to sit quiet, rather than chasing around the forest after piglets. To sit eating berries and honey instead. Maybe they will leave it in peace," said Putin. "They will not. Because they will always try to put him on a chain, and as soon as they succeed in doing so they tear out his fangs and his claws."
He said by fangs and claws he meant Russia's nuclear weapons. And the West wants to weaken Russia, he said, to win control over its rich natural resources.
"Once they've taken out his claws and his fangs, then the bear is no longer necessary. He'll become a stuffed animal," he said. "The issue is not Crimea, the issue is that we are protecting our sovereignty and our right to exist."
Putin urged a political solution for the crisis in Ukraine, where pro-Russian insurgents have been battling Ukrainian government troops since April, leaving 4,700 people dead.
Pro-Russian rebels in Donetsk adjust the radio as they prepare to listen to Russian President Vladimir Putin's annual end-of-year news conference broadcast on Thursday. (Maxim Shemetov/Reuters)
He said Ukraine must remain one political entity, meaning that its pro-Russian, rebellious eastern regions should not break away. He also suggested the Ukrainian government and rebels should conduct a quick "all for all" prisoners swap before Christmas.
Yet he defended Russia's increased military activities, including stepped-up Russian military flights in the Baltics that NATO says are putting civilian flights at risk, as a necessary response to what he described as aggressive Western action.
"We aren't on the offensive, we aren't attacking anyone, we are only defending our interests," he said.
Russian military aircraft only resumed their regular patrols a few years ago, he noted, claiming that U.S. aircraft have never stopped patrolling since the end of the Cold War and NATO has moved its forces close to Russian borders.
Putin said Russia wants to have normal economic and security ties with the West but wants to cooperate on equal terms.
"I believe that we are right, and our Western partners are wrong" on the Ukrainian crisis, he said.
The European Union on Thursday further beefed up its sanctions against Russia with a ban on investment in Crimea and other economic penalties including measures aimed at keeping tourists away.
Beginning Saturday, Europeans and EU-based companies cannot buy real estate or businesses in Crimea, finance Crimean companies or supply services. EU operators will no longer be allowed to offer tourism services to Crimea's Black Sea beaches or other destinations. Cruise ships owned by an EU-based company or flying an EU member state's flag will also no longer be allowed to call at Sevastopol or other Crimean ports except in an emergency.
Putin said he feels sure that Ukrainian President Petro Poroshenko sincerely wants a peaceful solution to the crisis but other forces in Ukraine don't. He urged the Ukrainian government to grant amnesty to the rebels and offer broad rights to eastern residents.
Putin also held out hope for normalizing ties with the West, saying that Russia stands ready to expand its gas supplies to southern Europe using a prospective gas hub on Turkey's border with Greece.
Turning to the ruble's collapse, he said the government should work with exporters to help stabilize the plummeting currency, but added that it shouldn't be done through formal orders.
He said he had talked to the heads of some of Russia's major companies to encourage them to sell more rubles — and said one promised to sell $3 billion to help stabilize the currency.
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