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Russia’s President Vladimir Putin addresses the Federal Assembly, including State Duma deputies, members of the Federation Council, the heads of the Constitutional and Supreme courts, regional governors, heads of Russia’s traditional religious faiths and public figures, at the Kremlin in Moscow on Dec. 4, 2014. Photograph: Kremlin
In his annual state of the union address on Thursday, President Vladimir Putin portrayed Russia as a strong state that would overcome its current difficulties.
Here is a roundup of the best quotes:
“The Central Bank has moved to a floating rate but that does not mean that it has moved away from influencing the ruble market, that the ruble exchange rate can be the subject of financial speculation without consequences.”
“I ask the Central Bank and the government to carry out tough coordinated action to fight off the desire of the socalled speculators to play on the fluctuations of the Russian currency.”
“The authorities know who these speculators are and has instruments to influence them. The time has come to use those instruments.”
“This is not just a nervous reaction of the United States and their allies to our stance in regard to the events and coup in Ukraine; not even in regard to the socalled Crimean spring. I am certain that if all this did not take place… they would come up with another reason to contain Russia’s growing capabilities, to influence it or, even better, use it for its own goals.”
“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.”
“But there is no point in talking to Russia from a position of strength.”
“We will never pursue the path of self isolation, xenophobia, suspicion and search of enemies. All this is manifestation of weakness, while we are strong and self confident.”
“Our goal is to have as many equal partners in the West and in the East … Under no circumstances are we going to wind down our ties with Europe.”
“I propose freezing the current tax conditions and not changing them for the next four years.”
“I propose a full amnesty for capital returning to Russia … This means that if people legalize their resources and property in Russia, they get firm guarantees that they won’t be bothered by various bodies, including law enforcement bodies; that they won’t be bothered or asked about the source and the ways the capital was acquired; that they won’t run into criminal or administrative persecution; that there will be no questions from the tax and law enforcement bodies to them.”
“Let’s do it now but [only] once.”
“Everyone wishing too should take this opportunity.”
“We all understand that the origins of money can be different, they were earned and obtained in various ways, but I am confident that the offshore page in the history of our economy, our country should be closed.”
“As for small business, I propose providing ‘inspection holidays’ for them. If an enterprise enjoys a solid reputation, and it had no significant complaints in three years, then over the next three years I propose not to carry out planned checks on the state and local levels at all.”
“The quality and the scale of the Russian economy should correspond with our geopolitical and historic role. We should escape the trap of zero growth. In three to four years we should reach a growth pace exceeding the global average.”
“This is the only way to raise Russia’s share in the global economy, which means to strengthen our influence and independence.”
“Finally, there was a historic reunification of Crimea and Sevastopol with Russia.”
“For Russia, Crimea … has a great civilizational and sacred meaning.”
“Every nation has an inalienable, sovereign right to its own path of development … Russia always has and always will respect that. This applies fully to Ukraine, the brotherly Ukrainian nation.”
“We have condemned the coup, the forcible seizure of power in Kiev in February. What we are seeing now in Ukraine, the tragedy in the southeast, fully confirms that our position is 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. I am sure that the Ukrainian nation itself will judge these events in a just way.”
- Putin’s State of the Nation Address — Live.
- 5 Questions for Russia’s Putin Ahead of State of Nation Speech.
- 5 Forces Battering Russia’s Economy as Putin Faces Nation.
A new bill would allow Russia to deny entry to anyone who has offended the country’s “national, historical, spiritual, cultural or other social values.” E.Kuzmina / Vedomosti.
The Moscow Times.
Russian lawmakers have drafted a vaguely worded bill allowing the country to deny entry to foreigners who have “offended” the state or its citizens, in a move that could give Moscow greater power to shut its borders to critics of the Kremlin.
According to the bill, published Thursday on the State Duma website and authored by two members of the ruling United Russia party, Russia would control its borders in line with the “principle of reciprocity,” countering foreign countries’ restrictions on the entry of Russian citizens with mirror measures.
The suggested amendments to Russia’s migration law would also allow Russia to deny entry to foreign citizens and stateless persons who are perceived as having committed acts against the country’s national interests, the Russian state or its individuals.
Russian officials have repeatedly accused the West of undermining its interests in recent months — accusing the U.S. and Saudi Arabia of holding down oil prices to punish Moscow and Western nations of trying to meddle in Ukraine, a country with which Russia has strong historical and cultural ties.
The bill would also allow Russia to deny entry to anyone who has offended the country’s “national, historical, spiritual, cultural or other social values” — largely intangible concepts that could be used to prevent anyone critical of Russia’s conservative administration from crossing the border.
In a note accompanying the bill, co-authors Deputy Rizvan Kurbanov and Senator Lyudmila Bokova said: “The [proposals] correspond to the generally recognized principles of international law while taking into account the relevant aspects of the current foreign policy situation.”
Kurbanov and Bokova concluded that the amendments were necessary “to protect … the rights and legitimate interests of the citizens of the Russian Federation, Russian society and our country as a whole.”
Macon Phillips, Coordinator of the Bureau of International Information Programs at the U. S. Department of State and Ariel Cohen, Director of Center for Energy, Natural Resources and Geopolitics at the Institute for Analysis of Global Security discuss Russian information wars in Kyiv on Nov. 19 at the Kyiv Post Tiger Conference. © Anastasia Vlasova
Oksana Lyachynska, Kyiv Post.
What does the Russian propaganda war mean for Ukraine and the world? How do you fight it? Experts from the United States, Britain and Ukraine attempted to answer these and other questions at the Kyiv Post Tiger Conference.
Below are some of the highlights from their talks.
Macon Phillips, coordinator of Bureau of International Information Programs at the U.S. Department of State
“Russia, the Kremlin push a lot of disinformation and you nearly want to argue about every individual piece of information, why it’s right or wrong. … We need to do more in terms of response. We need to actually protect the open system of media that is by far the best way to respond to these things.”
“The most effective way to counter the information war here in Ukraine is for Ukraine to succeed. We can spend all of our time trying to respond to this or that. But ultimate reality is going to drive that. If the Ukrainian government continues to implement reforms, continues to move forward, continues to sustain itself, eventually the reality will reach everyone.”
“The best way to respond to misinformation is with the truth. But the truth is a difficult thing to talk about.”
Dmytro Kuleba, Ambassador-at-Large for Strategic Communications at the Ministry of Foreign Affairs of Ukraine
“Russian information aggression is a threat not only to Ukraine but to all democracies. … The only difference is that Ukraine is in the front line.”
“What Russians are doing is not information attacks or information campaigns or information operations. They created a comprehensive reality encompassing all aspects of their interests. When you have to confront reality you have to create your own reality.”
“Russian information machine is built on fakes and manipulation, so if we want to win this game we have to focus on credibility.”
“It’s about changing communication culture inside the Ukrainian government. For example, minister of defense is key here. And we are working to change the communication culture to become more available for media. This is critical.”
“Russian strategy is based on the use of weapons of mass destruction. By this I mean Russia Today, Sputnik, army of trolls, bots, proxies, paid commentators. We base our strategy on something completely different, we base it on opinion leaders. I call them precision weapons. What cannot be done by us, can be done by opinion leaders in their countries. They can help us to disseminate the message. All we have to do is make them trust. They need to have trust in us.”
Ariel Cohen, director of the Center for Energy, Natural Resources and Geopolitics at the Institute for Analysis of Global Security
“We believe that Ukraine can make it as a European, free, Western-minded country. So does Vladimir Putin. And he is scared of that because an alternative Slavic, Eastern Slavic, Orthodox, half-of-the-country Russian-speaking country next to Russia is something they cannot tolerate. And information warfare is a very-very important part of the fight that has been launched.”
“To me Ukraine is now fighting its war for independence. This is where the United States was in 1776, where Israel was in 1948. This is creation of a nation. A part of it is an understanding that information is one of the battle fields, it’s an integral part of the strategy, of the war fighting.”
“To answer your question about Ukraine, what this is going to be in terms of the information campaign or information warfare, there is a famous quote from the cult novel of the Soviet times “The Twelve Chairs”: ”Saving of those who sink is the matter for those who sink themselves.” So, it will be up for Ukraine.”
Timothy Ash, London-based head of emerging market research for Standard Bank
“Over twenty years Russian interests infiltrated the West.”
“To know your enemy is key. The Russian state knows exactly how West functions because they infiltrated business, banking, academia, journalism, politics in the West. … The infiltration of Russian interests in the West is a huge threat to Western values and Western civilization. … The weaknesses of European Union is certainly been exploited.”
“This is a wonderful opportunity for radical change. Countries very really get this opportunity. Crises create opportunities, they force change. Ukraine is in desperate need of deep structural change. Putin has done a huge favor by uniting the population around this concept of European values. There is the price, but the fighting for democracy and freedom is worth it.”
Paul Niland, managing director of PAN Publishing
“The Russian media is acting to continue this fight to encourage people as volunteers to come and to kill people in the east of Ukraine. And for that reason my conclusion is that the Kremlin is directly responsible for all those deaths. They are directing media campaign, they are responsible.”
“The second conclusion is as long as Russia’s media campaign against Ukraine continues we can expect the hot war continue as well. They go hand in hand one to support the other.”
As the economy nosedives, the public mood threatens to plunge right alongside it — and some of the Kremlin’s more questionable economic moves may come back to haunt the people who made them happen. Maxim Stulov / Vedomosti
Alexey Eremenko, The Moscow Times.
As the Russian economy ambles toward recession, the government grapples with how to explain the downturn — no easy feat after 15 years of slowly mounting prosperity and President Vladimir Putin’s campaign promises of lavish social spending.
So far, the authorities have been inclined to blame external factors, such as sanctions imposed by the West over accusations of Russian meddling in Ukraine and the sliding price of oil, which at least some Kremlin backers blame on a covert deal between Washington and the Gulf monarchies.
The approach is clearly working, with Putin’s approval ratings resting comfortably above 80 percent, and widespread public adoration fueled by a patriotic euphoria over said meddling in Ukraine.
But as the economy nosedives, the public mood threatens to plunge right alongside it — and some of the Kremlin’s more questionable economic moves may come back to haunt the people who made them happen.
The Moscow Times has compiled a list of 10 economic moves currently hitting the Russian business community and/or the general populace that the government has had a hand in. The impact of most items on the list — up to and including the hypothetical risk of “smoker riots” — is expected to be felt in 2015, just around the corner.
1. Falling Ruble
The ruble has lost 38 percent of its value versus the U.S. dollar since the start of the year, and earlier this month the Central Bank stopped supporting the exchange rate, apparently due to shrinking currency reserves. The devaluation is expected to hit all industries with foreign connections in the coming year, including retail, tourism and dining. About 25 percent of the restaurants in Moscow are expected to shut down next year, consumer confidence is sliding, and clothes shopping and travel abroad are becoming less accessible to middle-class Russians.
2. Borrowing Restrictions
The EU and U.S. have limited access to international capital for Russia’s state-owned banks and corporations, including VTB, Sberbank and Rosneft, because of Russia’s support for separatists in Ukraine. Other Russian banks and companies are also reportedly struggling to borrow internationally, with foreign lenders increasingly distrustful of Russian businesses in light of a geopolitical standoff.
The end result is obstructed access to capital and rising borrowing costs for Russian companies, which already have a corporate debt of $600 billion as of October, according to Central Bank data.
3. Food Sanctions
One of the most questioned countermoves against the Western sanctions was an embargo on food exports from the U.S. and most European countries. The government promised that the embargo would boost domestic productivity, and that Asian and South American exports would make up for the rest. But dairy and meat imports have shrunk by a third, according to customs data, and food inflation this year has neared double digits, the State Statistics Service said this month.
In what has arguably been the highest-profile corporate scandal since the fall of oil giant Yukos in the 2000s, the government earlier this year voided the 2003 privatization deal for oil company Bashneft, nationalizing the controlling stake and placing its owner Vladimir Yevtushenkov under house arrest.
The selective inspection of a single privatization deal among dozens prompted speculations about its motives — with many commentators referring to it as a takeover attempt by state-run Rosneft. The company denied it, but the move — which highlighted a lack of property-right guarantees in Russia — did nothing to boost investor confidence, which had already taken a hit from political risks in the country.
5. New Business Duty
As falling oil prices ($79.2 per barrel of Brent as of Tuesday) drain the state coffers, the government is struggling for revenue and apparently expects small businesses to foot the bill. Though plans for a sales tax have been shelved, a government-penned bill under review in the State Duma proposes a new duty for small businesses of all stripes, from hairdressers to grocery stores, transportation firms and even public pay-per-use toilets.
The quarterly municipal duty is to vary from 6,000 to 600,000 rubles ($130 to $13,000). Analysts said it would cripple Russia’s already heavily taxed small and mid-sized businesses, which — according to Prime Minister Dmitry Medvedev — account for a mere 20 percent of Russia’s GDP, compared with 50-60 percent in developed countries.
6. Gas Prices
As oil prices plummet, gasoline prices in Russia continue to soar (9 percent since the start of the year, to about 33 rubles, or $0.70, per liter). A hike to 50 rubles ($1.06) per liter is expected in 2015 because of new duties. Given that Russia is a leading oil producer, the government will have a hard time selling the hike to millions of motorists nationwide — and that is without mentioning the negative impact of increased transportation costs on the economy.
7. Property Tax
Russian real estate tax is currently a blip on the radar of public spending, but new rules will cause it to surge 10 to 20 times by 2016, to between 5,000 and 26,000 rubles ($107 to $550) a year for typical Moscow apartments, according estimates by news site Realty.NewsRu.com.
The tax has been in talks for years, continually mothballed over fear of public discontent, especially among apartment owners in the lower income brackets. Given the slowing economy and rising prices, discontent is exactly what can be expected to happen when hefty new bills hit mailboxes everywhere.
8. Pension Freeze
The government has approved a freeze of a combined 540 billion rubles ($11.5 billion) of non-governmental pension fund savings for 2014 and 2015, with the money expected to be spent on more immediate state projects. Simultaneously, it expects to spend the last 3 trillion rubles ($64 billion) from the state’s National Welfare Fund — intended as backup for the flagging, also state-run Pension Fund. The money has been earmarked for state corporations, with Rosneft and Russian Railways having already requested 1.5 trillion rubles each.
Though the official line is that the savings will be returned, and emptying the National Welfare Fund will boost the economy, many observers are skeptical. The state risks running out of emergency savings, while simultaneously incurring the ire of 28 millions of Russians who keep their pension money in those plundered private funds.
9. Social Spending Cuts
State spending on health care and education will be slashed in 2015 by 21 percent and 6 percent year-on-year, respectively, as outlined in the draft state budget. In Moscow, a handful of public hospitals are slated to be shut down — and replaced by malls and high-end real estate — already triggering street protests by medics.
10. Tourism Slump
The Russian tourism industry is in its death throes, with dozens of travel agencies having declared bankruptcy this year, in many cases leaving hundreds of tourists stranded at a time. A story by the Kommersant newspaper in October linked the industry’s turmoil to decreased revenues caused by the government prohibiting about 4 million officials, or 22 percent of all tourists, from traveling abroad over fears that they risked being seized by Western spy agencies. And that was before the ruble’s devaluation and its devastating effect on tourism (see above).
Honorary Mention: Tobacco Tax Hike
The State Duma last week approved a new increase in tobacco excise tax, the second in two years. Cigarette brands used by 80 percent of smokers will become about 10 rubles ($0.20) more expensive per pack, Kommersant said.
While modest, the hike may prove to be the final straw as far as public patience is concerned. In a country where the average salary is 22,000 rubles ($460) and half of the male population is smoking, “smoker riots” are undesirable but possible.
(L to R) France’s President Francois Hollande, Russia’s President Vladimir Putin, Italy’s Prime Minister Matteo Renzi, Ukraine’s President Petro Poroshenko and German Chancellor Angela Merkel sit during a meeting on the sidelines of a Europe-Asia summit (ASEM) in Milan, Oct. 17, 2014.
Talks between Russia, Ukraine and European governments on Friday were “full of misunderstandings and disagreements,” the Kremlin said, undercutting more upbeat messages from leaders hoping for a breakthrough in the Ukraine crisis.
Russian President Vladimir Putin shook hands with his Ukrainian counterpart Petro Poroshenko at the start of a meeting with European leaders aimed at patching up a cease-fire in eastern Ukraine and resolving a dispute over gas supplies.
The various leaders emerged an hour later telling reporters some progress had been made and promising further talks.
“It was good, it was positive,” a smiling Putin told reporters after the meeting, held on the margins of a summit of Asian and European leaders in Milan.
However, Kremlin spokesman Dmitry Peskov later poured cold water on hopes of any breakthrough, saying “certain participants” had taken an “absolutely biased, non-flexible, non-diplomatic” approach to Ukraine.
“The talks are indeed difficult, full of misunderstandings, disagreements, but they are nevertheless ongoing, the exchange of opinion is in progress,” he said.
A similar message emerged overnight after Putin met German Chancellor Angela Merkel, a formerly cordial relationship that has come under heavy strain from Moscow’s support for pro-Russian rebels in eastern Ukraine.
The meeting was reported by both sides to have made little progress, with the Kremlin saying “serious differences” remained in their analysis of the crisis.
Putin, Poroshenko, Merkel and French President Francois Hollande were due meet later in the day, their aides said.
The West has imposed sanctions on Russia in response to its annexation of Crimea and its support for east Ukraine’s separatists.
The European leaders urged Russia to do more to end constant, deadly violations of a cease-fire that was agreed by Putin and Poroshenko last month in Minsk, saying Russia needed to fulfil its commitments.
Officials said local elections and the issue of using unmanned drone aircraft for surveillance of the borders between Russia and Ukraine were particular sticky points in the discussions, with Russia pushing to have its drones taking part alongside those offered by France and Germany.
The crisis in relations with Kiev has led Russia to cut gas supplies to Ukraine because of unpaid bills. The European Union fears this could threaten disruptions in the gas flow to the rest of the continent this winter, and is working hard to broker a deal.
Russia is Europe’s biggest gas supplier, accounting for around a third of demand, and the European Union gets about half of the Russian gas it uses via Ukraine.
The stand-off over pricing is the third in a decade between Moscow and Kiev, though this time tensions are higher because of the fighting in eastern Ukraine.
European Commission President Jose Manuel Barroso told reporters that Russia, Ukraine and EU officials would meet in Brussels to try to resolve the gas row.
Taking the lead in the diplomacy, Merkel saw Poroshenko on Thursday evening and then met Putin until well after midnight — an encounter that was significantly delayed because the Russian president arrived in Milan much later than expected.
Speaking off the record, a German source said Putin had not been in a “too constructive mood.”
Putin had warned on Thursday that Russia would reduce gas supplies to Europe if Ukraine took gas from the transit pipeline to cover its own needs, although he added that he was “hopeful” it would not come to that.
More than 3,600 people have died in eastern Ukraine since fighting broke out in mid-April when armed separatists declared they were setting up their own state.
Although Putin announced this week that Russian troops near the border with Ukraine would be pulled back, Western officials want to see clear evidence that Moscow is acting on this.
“Vladimir Putin said very clearly he doesn’t want a frozen conflict and doesn’t want a divided Ukraine. But if that’s the case, then Russia now needs to take the actions to put in place all that has been agreed,” said British Prime Minister David Cameron.
“If those things don’t happen, then clearly the European Union, Britain included, must keep in place the sanctions and the pressure so we don’t have this sort of conflict in our continent.”