[GreenYouth] News Conference of Vladimir Putin in the wake of Rouble Crash

[Sukla Sen]

[The news conference is obviously meant to reassure the stakeholders
in the wake of the Rouble crash.
But the actual prospect, even on the short term, is a largely an
unknown quantity. Despite contrary claims from various quarters.

In any case the very gist of Putin'n views here is: "How long will
this [downturn] take? In a worst-case scenario, I believe it would
take a couple of years. I repeat: after that, growth is inevitable,
due to a changing foreign economic situation among other things. A
growing world economy will require additional energy resources.
However, by that time I have no doubt that we will be able to do a
great deal to diversify our economy, because life itself will force us
to do it. There is no other way we could function."
It is significant that he is pinning his hope of an inevitable rebound
on a growing global economy, thereby underling the strong linkages of
the national economy with the global.
One just cannot have any quarrel on that - the deep rootedness of the
Russian economy in the global (capitalist) economic order.
(So, what logically follows is that a turmoil in Russian economy may
very well affect the global economy. Of course, the extent and
intensity remain very much a grey area.)

The other noticeable thing, in this context, is that he faces
questions whether this current predicament is a price being paid for
Russia's role in Ukraine, and Crimea in particular.
Putin, at least for public consumption, sticks to his guns. Even
acknowledges that Russian "volunteers" are fighting in south-eastern
Ukraine.]

http://eng.kremlin.ru/news/23406

News conference of Vladimir Putin

December 18, 2014, 15:20  Moscow

 Tags: media


14/30 Photo: the Presidential Press and Information Office Full caption


The President's news conference was broadcast live by Channel One,
Rossiya-1 and Rossiya-24 TV channels, and by the Radio Rossii, Mayak
and Vesti FM radio stations. 1259 Russian and foreign journalists have
been accredited to cover the news conference.
Multimedia

News conference of Vladimir Putin
 December 18, 2014  Moscow

PRESIDENT OF RUSSIA VLADIMIR PUTIN: Good afternoon, colleagues.

I am very happy to see you in high spirits. As we did last time, I
will begin by briefing you on the work done during the year and then I
will try to answer your questions.

First the most important thing: the economic performance. In the first
10 months of this year, the gross domestic product grew by 0.7
percent, and the final figure may be around 0.6 percent. My colleagues
and I met yesterday to finalise the figures. The trade surplus grew by
$13.3 billion to reach $148.4 billion.

Industrial production picked up some speed after last year's lull. In
the first 10 months of the year, it went up by 1.7 percent.
Unemployment is also low: at times, it dropped to below 5 percent, and
now it is around 5 percent, possibly 5.1 percent.

The agroindustrial complex is developing. I believe that by the end of
the year growth there will amount to 3.3 percent. As you may know,
this year we had a record crop of 104 million tonnes.

Despite the turbulent situation on the financial market, the federal
budget this year will show a surprlus. In other words, revenue will
exceed expenses by 1.2 trillion rubles [over $20 billion], which is
about 1.9 percent of the GDP. The Finance Ministry is still working on
the final calculations, but the surplus is definite.

The main achievement of the year in the social sphere is of course the
positive demographics.

Natural population growth in the first 10 months of the year was
37,100 people. The death rate is going down in this country, while the
birth rate is increasing. This is a very good trend and we must make
every effort to maintain it. As promised, we continued adjusting the
maternity capital. In 2014 it amounted to 429,408.5 rubles.

We have met and exceeded the targets set for this year for salary
rates for ten workforce categories. I am sure you know what I am
talking about. First of all, these are teachers at schools and
institutions providing supplementary education, counsellors,
university faculty members, medical doctors, paramedics and nurses,
and employees of cultural institutions. In 2014, we adjusted pensions
to inflation twice: by 6.5 percent on February 1 and by an additional
1.7 percent on April 1.

We gave significant attention this year to enhancing the combat
capability and efficiency of the Armed Forces. I will not go into
detail here. I would only like to mention the social sphere. In 2014,
11,700 Defence Ministry servicemen received permanent housing and
15,300 received service housing. This is 100 percent of the year's
target figures.

These are the numbers I wanted to begin with. Now a few words
regarding the current situation. I believe we all know that the main
issue of concern to this country's citizens is the state of the
economy, the national currency and how all this could influence
developments in the social sphere. I will try to briefly describe this
situation and say how I expect it to develop. Basically, that is where
we could end this news conference. (Laughter) However, if you have any
further questions I will try to answer them.

The current situation was obviously provoked primarily by external
factors. However, we proceed from the view that we have failed to
achieve many of the things that were planned and that needed to be
done to diversify the economy over the past 20 years. This was not
easy, if at all possible, given the foreign economic situation, which
was favourable in the sense that businesses were investing into areas
that guaranteed maximum and fast profits. This mechanism is not easy
to change.

Now, as you may know, the situation has changed under the influence of
certain foreign economic factors, primarily the price of energy
resources, of oil and consequently of gas as well. I believe the
Government and the Central Bank are taking appropriate measures in
this situation. We could question the timeliness or the quality of the
measures taken by the Government and the Central Bank, but generally,
they are acting adequately and moving in the right direction.

I hope that yesterday's and today's drop in the foreign currency
exchange rate and growth of our national currency, the ruble, will
continue. Is this possible? It is. Could oil prices continue falling
and would this influence our national currency and consequently all
the other economic indexes, including inflation? Yes, this is
possible.

What do we intend to do about this? We intend to use the measures we
applied, and rather successfully, back in 2008. In this case, we will
need to focus on assistance to those people who really need it and on
retaining - this is something I would like to highlight - retaining
all our social targets and plans. This primarily concerns pensions and
public sector salaries, and so forth.

Clearly, we would have to adjust our plans in case of any unfavourable
developments. We would certainly be forced to make some cuts. However,
it is equally certain - and I would like to stress this - that there
will be what experts call a positive rebound. Further growth and a
resolution of this situation are inevitable for at least two reasons.
One is that the global economy will continue to grow, the rates may be
lower, but the positive trend is sure to continue. The economy will
grow, and our economy will come out of this situation.

***How long will this take? In a worst-case scenario, I believe it
would take a couple of years. I repeat: after that, growth is
inevitable, due to a changing foreign economic situation among other
things. A growing world economy will require additional energy
resources. However, by that time I have no doubt that we will be able
to do a great deal to diversify our economy, because life itself will
force us to do it. There is no other way we could function.***
[Emphasis added.]

Therefore, overall, I repeat, we will undoubtedly comply with all our
social commitments using the existing reserves. Fortunately, this year
they have even grown.

I would like to remind you that Central Bank reserves amount to $419
billion. The Central Bank does not intend to 'burn' them all
senselessly, which is right. The Government reserve, the National
Wealth Fund, the Reserve Fund have grown this year by about 2.4-2.5
trillion rubles to a total 8.4 trillion rubles. With these reserves I
am certain we can work calmly to resolve our main social issues and to
diversify the economy; and I will repeat that inevitably the situation
will return to normal.

I would like to end my introductory remarks here. As I have said, we
could end the whole news conference here, but if you do have any
questions, I am ready to answer them.

PRESIDENTIAL PRESS-SECRETARY DMITRY PESKOV: This year I would like to
begin with those who have been working with the President throughout
the year - the Kremlin press pool. First I would like to give the
floor to the dean of the Kremlin press pool Vyacheslav Terekhov, who
has been working with Mr Putin for many years and who travels to all
the remote parts of the world and all the cities and towns of this
country. Mr Terekhov, please.

VLADIMIR PUTIN: This is what they call nepotism.

VYACHESLAV TEREKHOV, INTERFAX: But I've got an interesting job.

There is something I would like to clarify, Mr President. Judging by
the situation in the country, we are in the midst of a deep currency
crisis, one that even Central Bank employees say they could not have
foreseen in their worst nightmares.

Do you believe that things will get better in two years, as you
mentioned, and we will recover from this financial and economic
crisis? Criticism was piled on the Government and the Central Bank for
the ruble's Black Monday and Tuesday. Do you agree with this
criticism?

Thank you.

VLADIMIR PUTIN: I said that given the most unfavourable foreign
economic situation this could last (approximately, because no one can
say for certain) for about two years. However, it may not last that
long and the situation could take a turn for the better sooner. It
could improve in the first or second quarter of next year, by the
middle of next year, or by its end.

Nobody can tell. There are many uncertain factors. Therefore, you
could call it a crisis or something else, you can decide which word to
use. However, I believe I made it quite clear that the Central Bank
and the Government are generally taking appropriate measures in this
situation. I believe some things could have been done sooner, and this
is actually what the expert community are criticising them for.

What does the job involve, in my view? And what are the Central Bank
and the Government actually doing? First, as you may know, they raised
the key interest rate. I hope the rate will remain for the duration of
these complicated developments connected with the foreign economic
situation, and the economy will adjust one way or another.

What is the basis for my optimism? The idea that the economy is bound
to adjust to life and work in conditions of low prices on energy
resources. This will become a fact of life.

How soon will the economy adapt if the prices remain at the current
level or even go below 60 [USD/barrel], 40, or whatever? For us it
could be any figure, the economy would simply have to get structured.
How fast will this happen? This is hard to say. But it is inevitable.
I would like to highlight this. This will be a fact of life.

What is the Central Bank doing? They have raised the key interest
rate. What else do they need to do? And what are they already doing?
To stabilise the national currency they need to somewhat limit ruble
liquidity and give economic entities access to foreign currency
liquidity. This is exactly what the Bank is doing. Their foreign
currency interest rate is quite low - 0.5.

Overall, I think it is up to the Central Bank to decide whether to
reduce the interest rate or not, they should see and react
accordingly. They should not hand out our gold and foreign currency
reserves or burn them on the market, but provide lending resources.
And they are doing this as well.

The so-called repo is a well-known instrument here. They can be
offered for a day, a week, 28 days, almost a month, or for a year.
This is money that is returned, but it gives economic entities the
opportunity to make use of the foreign currency. Everything is being
done right.

They should probably move at least half a pace faster. Of course, I
see the criticism levelled at the Central Bank and its Governor. Some
of it is justified, some is not. The Government should also bear
responsibility. They should work with exporters who have sufficiently
high foreign currency revenues.

The Prime Minister met with heads of our major companies and we can
see some results. Many of them have to return their loans and think of
the condition their companies are in.

Every company, just like every individual, tries to save 'for a rainy
day'. Is such behaviour economically justified? In terms of economic
logic, it is not. Nevertheless, companies do it, and we now see a
certain result, the 'rebound' is happening.

The Government should be taking other measures as well. What do I
mean? For instance, combatting inflation is of course the Central
Bank's job. However, there are things that we have mentioned already,
things I spoke of in public during our meetings with the Government.

For instance, the prices of petrol and food are something they should
work on. Moreover, the current situation, whatever anyone says,
requires a 'hands on' approach. They have to meet with producers,
those who are on the market, with retailers and with the oil companies
that have significantly monopolised the market. The Federal
Antimonopoly Service should function properly.

These actions have to be joint and reasonable, though without any
violation of the individual competence of, say, the Central Bank or
the Government. Nevertheless, they should coordinate their actions,
and do so in a timely fashion.

Therefore, they can criticise Nabiullina [Central Bank Governor] all
they like, but one should bear in mind that overall their policy is
right. The Central Bank is not the only one responsible for the
economic situation in the country.

DMITRY PESKOV: Another presidential press pool old-timer, Alexander
Gamov of the Komsomolskaya Pravda. Is there anything you would like to
ask?

ALEXANDER GAMOV, KOMSOMOLSKAYA PRAVDA NEWSPAPER: First, I have
something to say. Mr President, I believe many people were looking
forward to seeing you here at this news conference. Many were trying
to predict your mood, because this would largely set the mood for the
entire country. You are here, and you already smiled several times, so
thank you for your optimism. We hope everything will happen just the
way you said it would.

Over to my questions. Since 2008, we have been talking about the need
to get rid of our oil addiction and restructure our economy to make it
more efficient. However, the developments of the past few days have
shown that we did not manage to achieve this.

We are still addicted, and nobody knows how long this will last. Could
you say openly what you personally think: will we be able to use this
crisis for to our advantage, lose our addiction and rebuild the
economy? I realise that this would take time.

And my second point. In your Address to the Federal Assembly, you
named, to the welcoming applause of the country and the business
community, a whole list of concessions that have long been suggesting
themselves. However, there is the danger in Russia, as you well know,
that all important and useful resolutions, including presidential
ones, get lost in the excessive red tape and general slack.

Are you confident that this time you statements, your resolutions will
be implemented and your optimism will be supported with real action?

VLADIMIR PUTIN: As we all know, only an insurance policy can give you
confidence. The main insurance for us here is the right macroeconomic
policy and reserve funds for resolving social issues. This is the kind
of insurance policy that would give us confidence.

As for excessive red tape, I can say this: there must be some people
from the European Union here. If you ask them about red tape in
Brussels, they will tell you all about it. Our bureaucracy is child's
play compared to theirs.

The problem does exist, however, and it is not about red tape. Do you
know what it is? I said at the very start that I would say a few
things and we might as well end the news conference. It looks like
that was no joke.

This is not about decisions getting bogged down in red tape. It is
about the foreign economic situation forcing economic entities to
invest, say, in energy resources, the chemical industry or metals. So
regardless of all the Government's attempts to fine-tune the
instruments of taxation and benefits for businesses that are not
involved with raw materials, this is a very complicated process,
because the budget does not usually have the required funds.

We have been using all these instruments for several years already. We
are trying to create more favourable conditions for the development of
production, but it is moving forward with difficulty. Especially when
one can make large profits by investing in energy resources. As you
may know, at least 80 percent of all applications to the Government
(believe me, this is true) have to do with getting access to some
field rather than investing in some high technology area. Why is this?
Because the returns there are fast and big.

I am coming to your question. If the situation changes, then life
itself will force us to invest in other industries. And this gives me
optimism, strange as it might seem. True, in some ways it would be
more difficult. True, we would have to resolve social issues at any
cost and meet the targets set in the social section of the 2012
Presidential Executive Orders.

Can we do it? Yes, we can. However, at the same time we need to make
use of the current situation to create additional conditions for
developing production and economic diversification. I hope that the
current state of affairs will make this possible.

ANDREI KOLESNIKOV, KOMMERSANT NEWSPAPER: Mr President, in early 2012
in one of your pre-election articles that were later documented as
Executive Orders of May 2012, as we all know, while describing the
situation at the time you quoted Alexander Gorchakov [19th century
Russian diplomat]. You said, "Russia is concentrating."

Can you say what is happening to the country now? What is it doing? Is
it still concentrating, or maybe the time has come to de-concentrate,
to finally relax?

VLADIMIR PUTIN: We must work. Little has changed in this sense.
Moreover, the current conditions are pushing us to move forward. I
keep tackling it from different perspectives, and I see you and your
colleagues keep raising the same issue. We must work, and the external
conditions are forcing us to become more efficient and to shift to
innovative development.

What does the future of our economy require? We have to create
favourable conditions for business, to ensure freedom of
entrepreneurship, we need to guarantee ownership rights, to stop using
law enforcement agencies to chase those we do not like and use those
instruments for competition. We need more benefits for production
facilities; we need to develop those regions of the Russian Federation
that require special attention, like the Far East.

Are we doing this? We are. However, in my Address I spoke of an entire
programme of action. I am referring here to 4-year tax holidays, to
3-year inspection holidays for those companies that have no record of
any serious violations, to benefits for small businesses. We must
carry on with the concentration and support it with real efforts.

VLADIMIR KONDRATYEV, NTV TELEVISION COMPANY: Mr President, we recently
marked the 25th anniversary of the fall of the Berlin Wall. You
witnessed the event when you were still working in the German
Democratic Republic. A lot has been achieved, perhaps not exactly what
we hoped for, and we had great hopes, but there have been certain
achievements. It was thanks to your persistence that Russia was once
close to a visa-free travel agreement with Europe.

In this anniversary year, a new wall appeared within a matter of
weeks. It is not made of concrete, but it is no less obvious, a wall
of alienation, suspicion, mutual mistrust and mutual reproaches. Where
can this cooling lead us? Some go as far as speaking of the beginning
of a new Cold War. Will we be living in a divided world or is there
any possibility to resume dialogue and cooperation?

VLADIMIR PUTIN: You just said the Berlin Wall fell, but some new walls
are being put up now. I will respond, and I hope you will agree with
me.

It is not now that this happened. You are an expert on Germany and on
Europe. Didn't they tell us after the fall of the Berlin Wall that
NATO would not expand eastwards? However, the expansion started
immediately. There were two waves of expansion. Is that not a wall?
True, it is a virtual wall, but it was coming up. What about the
anti-missile defence system next to our borders? Is that not a wall?

You see, nobody has ever stopped. This is the main issue of current
international relations. Our partners never stopped. They decided they
were the winners, they were an empire, while all the others were their
vassals, and they needed to put the squeeze on them. I said the same
in my Address [to the Federal Assembly]. This is the problem. They
never stopped building walls, despite all our attempts at working
together without any dividing lines in Europe and the world at large.

I believe that our tough stand on certain critical situations,
including that in the Ukraine, should send a message to our partners
that the best thing to do is to stop building walls and to start
building a common humanitarian space of security and economic freedom.

Since I have mentioned Ukraine, I have to give the floor to our
colleagues from Ukraine. Go ahead, please.

ROMAN TSYMBALYUK, UKRAINIAN NEWS AGENCY UNIAN: I have two short
questions, if I may.

VLADIMIR PUTIN: Go ahead, please.

ROMAN TSYMBALYUK: My first question concerns the punitive operation
you have launched in eastern Ukraine, which is mostly spearheaded
against Russian speakers. It's an open secret that it is Russian
servicemen and Russian militants who are fighting there. Question: How
many Russian servicemen and units of equipment have you sent there,
and how many of them have been killed in Ukraine? What would you as
the Commander-in-Chief say to the families of the Russian servicemen
and officers killed there?

And my second short question, if I may. We had a president called
Viktor, who is now hiding in Russia. He had imprisoned the number one
on the Batkivshchyna list, Yulia Tymoshenko. She has been released,
but now the current number one on the party list is in prison, this
time in Russia...

VLADIMIR PUTIN: What? Say it again please?

ROMAN TSYMBALYUK: The number one on the list of Yulia Tymoshenko's
party, Batkivshchyna, is currently in a Russian prison. I have a
question: On what conditions will you release Ukrainian pilot
Savchenko, Ukrainian film director Oleg Sentsov and at least 30
Ukrainian prisoners of war whom you are keeping in various prisons in
Russia? Thank you.

VLADIMIR PUTIN: Let's begin with the second question, and then I will
certainly answer your first question.

The question about Ukrainian citizen Savchenko and the conditions for
her release. I have an open and, as far as I can see, a clear position
on this issue. You can see in this audience the colleagues of our
journalists - they are also your colleagues - who have died in the
line of duty in southeast Ukraine. I want to stress that they did not
take part in fighting for any of the sides, and they were unarmed. It
is the duty of all state agencies, including the military ones, to
protect their lives and health and to give them an opportunity to do
their professional duty which is to provide objective and full
information, at least as they see it. It is a fact that has been
recognised in the civilised world. They have been killed. According to
our law enforcement agencies, Ms Savchenko called in artillery fire
via radio. If it is reliably established during the pretrial
investigation and the subsequent trial that she was not involved and
is not guilty, she will be released immediately. But if they prove
that she was indeed involved in the journalists' murder, a Russian
court will issue a proper ruling, as I see it, and she will serve her
sentence in accordance with the verdict. However, no one has the right
to hold anyone guilty of a crime on account. I mean that Russian
legislation includes the presumption of innocence. So we'll see how
the pretrial investigation proceeds, and what conclusions the Russian
court will make.

As for the other servicemen you have mentioned, we don't consider them
prisoners of war. They are in detainment in Russia, and they are being
investigated on suspicion of involvement in terrorist activity. This
is all I can say on your second question.

Now to the first question, about responsibility. In Russia, like in
any other presidential republic, it is the president who is
responsible for everything. And responsibility for military personnel
rests with the Commander-in-Chief. Let me remind you that in Russia
this is one and the same person.

***All those who are following their heart and are fulfilling their
duty by voluntarily taking part in hostilities, including in southeast
Ukraine, are not mercenaries, since they are not paid for what they
do.*** [Emphasis added.]

Russian public opinion holds that what is now happening in southeast
Ukraine is actually a punitive operation, but it is conducted by the
Kiev authorities and not the other way around. The self-defence
fighters of the southeast were not the ones who sent troops to Kiev.
On the contrary, the Kiev authorities amassed their military forces in
the southeast of Ukraine, and are using multiple rocket launchers,
artillery and fighter jets.

What is the problem here and how it can be solved? I'll try to answer
this question as well. The problem is that after the government coup
(and no matter how others call it and what is being said in this
respect, a government coup was carried out in Kiev by military means)
part of the country did not agree with these developments.

Instead of at least trying to engage in dialogue with them, Kiev
started by sending law enforcers, the police force, but when that
didn't work out, they sent in the army, and since that didn't work out
either, they are now trying to settle the issue by using other
forceful methods, the economic blockade.

I believe that this path has absolutely no future whatsoever and is
detrimental to Ukraine's statehood and its people. I hope that by
engaging in dialogue - and we are ready to assume the role of
intermediaries in this respect - we will succeed in establishing a
direct, political dialogue, and by employing such methods and
political instruments we will reach a settlement and restore a single
political space.

ANTON VERNITSKY, CHANNEL ONE RUSSIA: Mr President, ***are the current
economic developments the price we have to pay for Crimea? Maybe the
time has come to acknowledge it?*** [Emphasis added.]

VLADIMIR PUTIN: No. ***This is not the price we have to pay for
Crimea... This is actually the price we have to pay for our natural
aspiration to preserve ourselves as a nation, as a civilisation, as a
state.*** [Emphasis added.] And here is why.

As I've already mentioned when answering a question from your NTV
colleague, and as I've said during my Address to the Federal Assembly,
after the fall of the Berlin Wall and the breakup of the Soviet Union,
Russia opened itself to our partners. What did we see? A direct and
fully-fledges support of terrorism in North Caucasus. They directly
supported terrorism, you understand? Is that what partners usually do?
I won't go into details on that, but this is an established fact. And
everyone knows it.

On any issue, no matter what we do, we always run into challenges,
objections and opposition. Let me remind you about the preparations
for the 2014 Olympics, our inspiration and enthusiasm to organise a
festive event not only for Russian sports fans, but for sports fans
all over the world. However, and this is an evident truth,
unprecedented and clearly orchestrated attempts were made to discredit
our efforts to organise and host the Olympics. This is an undeniable
fact! Who needs to do so and for what reason? And so on and so forth.

You know, at the Valdai [International Discussion] Club I gave an
example of our most recognisable symbol. It is a bear protecting his
taiga. You see, if we continue the analogy, sometimes I think that
maybe it would be best if our bear just sat still. Maybe he should
stop chasing pigs and boars around the taiga but start picking berries
and eating honey. Maybe then he will be left alone. But no, he won't
be! Because someone will always try to chain him up. As soon as he's
chained they will tear out his teeth and claws. In this analogy, I am
referring to the power of nuclear deterrence. As soon as - God forbid
- it happens and they no longer need the bear, the taiga will be taken
over.

We have heard it even from high-level officials that it is unfair that
the whole of Siberia with its immense resources belongs to Russia in
its entirety. Why exactly is it unfair? So it is fair to snatch Texas
from Mexico but it is unfair that we are working on our own land - no,
we have to share.

And then, when all the teeth and claws are torn out, the bear will be
of no use at all. Perhaps they'll stuff it and that's all.

So, it is not about Crimea but about us protecting our independence,
our sovereignty and our right to exist. That is what we should all
realise.

If we believe that one of the current problems - including in the
economy as a result of the sanctions - is crucial... And it is so
because out of all the problems the sanctions take up about 25 to 30
percent. But we must decide whether we want to keep going and fight,
change our economy - for the better, by the way, because we can use
the current situation to our own advantage - and be more independent,
go through all this or we want our skin to hang on the wall. This is
the choice we need to make and it has nothing to do with Crimea at
all.

YEVGENY ROZHKOV, VESTI ROSSIYA-1 CHANNEL: Good afternoon, Mr President.

First of all, the Crimea issue is more or less clear. The only
question perhaps is how much we will have to eventually invest in its
development after the difficult Ukrainian past. The most urgent
question for me is about eastern Ukraine, which is now calling itself
Novorossiya. How do you see the future of that part of Ukraine? Do you
believe in the success of the Minsk agreements? Do you think they will
help reconciliation? And how are we going to further help Donbass?
Will it be humanitarian aid, as it is now, or something else?

VLADIMIR PUTIN: I think I answered a part of your question in my
response to your Ukrainian colleague. We assume that the crisis will
be resolved sooner or later. The sooner the better, of course. This is
the first point.

Second, it should be addressed and settled by political means, and not
through pressure, no matter what type of pressure, whether an economic
blockade or the use of armed force. And, of course, we will help the
people, as we are doing now (as you may know, a tenth humanitarian
convoy has been sent). After all, we should proceed from the
fundamental principles of international law and from people's right to
decide their fate on their own.

It was not by chance that I... It's not just a casual phrase, when I
said that peace should be restored and problems should be resolved by
political means. We proceed from the assumption that a common
political space will be restored. It's hard to say at this point what
it would look like, but I think we should strive for this. The problem
is, however, that both sides need to strive for this. Both! And people
living in Ukraine's southeast should be respected. Economic ties
should be restored.

It is a fact that much of Ukraine's power industry burns Donbass coal,
but up until now they aren't buying this coal. We were asked to
influence Ukraine's southeast, Donbass, to make the miners agree to
supply coal. We did that, but they are not buying it. Why? Because
they've closed all the banks and are unable to make payments. Our
colleagues told me yesterday: We are ready to pay and have transferred
a prepayment. I've made inquiries and found that there is no
prepayment. They allegedly wired the money to the miners' bank cards,
but the cards are not working! And this is how it is with each issue.
Nevertheless, there is no other way but a peace settlement.

As far as the Minsk agreements are concerned, it's a very important
part of this, and we want them to be complied with because, first, the
initiative for the Minsk meeting came from me and from Petro
Poroshenko. I have no doubt that he is striving for this. But he is
not the only one over there. We have been hearing statements from
other officials, who advocate basically a war to the end. The
implication is that all of this is likely to lead to a continental
crisis. We hear many bellicose statements. I still think that
President Poroshenko is oriented towards settlement. But concrete
actions and steps are needed.

Should the Minsk agreements be implemented or shouldn't they? Yes they
should! Let me repeat: I was one of those who initiated them and we...
I'll say an important thing. Look, I'd like everyone to hear this. Our
representatives in Minsk signed a memorandum in September and there
were protocols to it that defined the disengagement line. The
representatives of Donetsk didn't sign those protocols. That's the
problem. They said at the very start: We can't.

When we tried to insist - I'll be frank with you about this, since the
public needs to know these things - they told us that they can't leave
these villages (there were three or four disputed villages), because
their families live there, and they can't risk their children, wives
and sisters being killed or raped. This is the most important thing.
However, the Ukrainian officials did not withdraw their troops from
the areas that they were supposed to leave, such as the Donetsk
Airport, either. They're staying there.

Are you aware of the latest developments? The self-defence forces
allowed them to rotate their troops at the airport. They took them to
a bathhouse and sent them some food. This may well put a smile on your
faces, but, on the other hand, this is a positive development.
Perhaps, in the end, people will be able to agree on things among
themselves. Everyone is insisting on exchanging prisoners of war. I
believe that they should all be exchanged unconditionally. But life is
more complicated than that. When these lists became available, it
turned out (in any case, that's what the Donbass self-defence fighters
told us), that the lists from Ukraine include people who have been
detained not in connection with the hostilities in southeastern
Ukraine, but somewhere in Kherson or Odessa. These lists must be
checked. Nonetheless, we insist and I believe that we need to get
these people back home to their families for the New Year or
Christmas, regardless of all other circumstances.

Yesterday, they agreed to exchange 30 people. Representatives of the
self-defence forces went to the exchange location, and a
representative of the Kiev authorities said, "No, we are not going to
proceed with the exchange until the next meeting in Minsk." Well, you
can do that, of course, but it would be nice if they could let go at
least 30 people ... But these are details. Anyway, it would be a
positive move, including in terms of implementing the Minsk
agreements, which is an important and necessary process.

An agreement was reached to hold a videoconference today or tomorrow.
First, there will be a dialogue during this videoconference, but the
next step should be made at a meeting in Minsk. There's another
important thing. It's essential for the Kiev authorities to keep their
end of the bargain. There was an agreement on adopting an amnesty law.
It is nowhere to be seen. They keep telling us that a law on special
status was passed, but it couldn't be implemented, this law, do you
understand that? Because the law could come into force and actually
become effective only after the other law had been adopted - about the
disengagement line. It has not been adopted so far. This compilation
has to stop. If Ukraine wants to restore peace, tranquillity and its
territorial integrity, the people who live in certain regions of the
country must be respected and a straight, open, and honest political
dialogue must be maintained with them. It must be a political dialogue
without any pressure. I hope that in the end everyone will go down
that path.

VERONIKA ROMANENKOVA, TASS: Thank you. This year, it became clear that
energy diplomacy has become a key factor in geopolitics. How justified
is Russia's turning to the East and the gas contracts it has signed
with China and Turkey?

Have all the pitfalls of these projects been considered? Many still
doubt that the Chinese contract will be profitable, while the
potential Turkish Stream will leave Russia dependent on Turkey. Do you
have anything to say here?

VLADIMIR PUTIN: No, I don't. These things are so obvious that it would
be impossible to argue. I often hear comments about Russia's turn
towards the East. Now, if you read American analysts, they also write
about the United States' turn towards the East. Is this true? Partly,
yes. Why? Is this political? No. This stems from the global economic
processes, because the East - that is, the Asia-Pacific Region - shows
faster growth than the rest of the world. New opportunities open up.
As for energy, the demand for resources is racing in leaps and bounds
in China, India, as well as in Japan and South Korea. Everything is
developing faster there than in other places. So should we turn down
our chance? The projects we are working on were planned long ago, even
before the most recent problems occurred in the global or Russian
economy. We are simply implementing our long-time plans.

About the Chinese contract - it is not a loss-making project. It
enjoys privileges on both sides - on both sides, I must stress. This
is true. China offered some benefits as well. I will not go into
details right now - these benefits aren't extraordinary or anything;
the Chinese government simply decided to provide some support to the
project participants. We, in turn, agreed to do the same. So the
project definitely became profitable. Definitely.

Moreover, we have agreed on a pricing formula, which is not much
different - if at all - from the one applied to our European
contracts, except for the specific regional market coefficients. This
is regular practice. In addition, it will help Russia, which will
receive and accumulate gigantic resources at the project's initial
stage, to begin connecting our Far Eastern regions to the gas
distribution grids, not just to export gas through the pipeline. This
will allow us to make the next  - a very important - step. We will be
able to link together the western and eastern gas pipeline systems and
promptly rechannel resources back and forth when needed, depending on
the international market. This is very important. Without it, we would
never be able to connect Eastern Siberia and the Far East to the gas
distribution system. So this project holds many potential benefits.
Not to mention that it is a huge construction site that will create
jobs and generate tax income at every level, and revive Russia's Far
East and the entire region.

About Turkey. The Turkish economy is also growing and requires
additional energy resources as much as the APR. We built the so-called
Blue Stream pipeline many years ago, and now our Turkish partners are
considering increasing the supplies to the Turkish market. Should we
refuse?

We have reached all the key agreements with them, which cover the
pricing formula, supply schedule and other aspects. We more or less
understand their requirements, and we will certainly sell them what we
have and what they need. Of course, we will do this.

Will a so-called European hub be built on the border of Turkey and
Greece? This is not for us to decide. The decision largely depends on
our European partners: Do they want stable, guaranteed and absolutely
transparent energy supply from Russia, which they badly need, without
any transit risks? Great! Then we'll start working, and the pipeline
would reach Macedonia via Greece, go on to Serbia and to Baumgarter in
Austria. If they don't want this, we won't do it. The thing is that
there is no cheaper and more reliable supplier than Russia, and there
won't be any in the near future.

GRIGORY DUBOVITSKY, RIA NOVOSTI: Mr President, I'd like to go back to
the situation on the currency market, which changes from one day to
another and is a great concern for millions of Russians. Many experts,
including you, Mr President, have said the current situation could be
blamed also on currency profiteers. Concrete companies and individuals
have been named. Can you give us those names? Are they Russians or
foreigners? And why can't they be stopped? Are they too strong? Or are
we too weak?

I have a second question on the same subject, if I may. Do the Central
Bank and the Government plan to peg or devalue the ruble?

VLADIMIR PUTIN: This is what our Ukrainian partners did, quite
unsuccessfully. Are you asking if we plan to force our companies, our
main exporters, who receive revenues in foreign currency, to sell it?
They would just buy it back the next day, as it happened in Kiev and
as it happens in other countries.

The next step in this case should be to set a limit on the purchase of
foreign currency on the domestic market. We won't go this far, and so
the Central Bank and the Government are not planning, quite correctly
as far as I see it, to limit our exporters in this field.

This doesn't mean, though, that the Government should not act through
its representatives on company boards. After all, these are our
largest energy companies. They are partly state-owned, which means
that we can influence their policies, but without issuing any
directives or restrictions. This we won't do.

As for the so-called profiteers, it is not a crime to play on the
currency market. These market players can be foreigners or various
funds, which are present on the Russian market and have been operating
quite actively there. Or they can be Russian companies. Overall, as I
said at the beginning of this meeting, this is an accepted practice in
a market economy. Profiteers always appear when there is a chance to
make some money.

They don't show up to steal or to cheat but to make some money in the
market by creating favourable conditions, by pushing, for example, as
was done in the beginning of this process, like, in this particular
case, the Central Bank of Russia was pushed to enter the market and
start selling gold and foreign currency reserves in the hope of
intervening and supporting the national currency.

But the Central Bank stopped, and it was the right thing to do.
Perhaps it would have been better if it had been done earlier and in a
tougher way. Then perhaps it wouldn't have been necessary to increase
the rate to 17 percent. But that is a different matter. A matter of
taste, so to speak. Although it is still rather significant. It is
true. So, I told you who they are.

You know, two days ago I had a friendly telephone conversation with
some of them and I asked, "So why are you holding back?" By the way, I
didn't make them do anything. "Our loan payments are due soon," was
the reply. Then I say, "I see. OK, if you scrape the bottom of the
barrel, can you enter the market?" He took a minute and replied:
"Well, I guess we have three billion dollars." They have three billion
in reserves. See what I mean? It is not 30 kopeks. And this is just
one company.

So if each company has three billion, in total it is not 30 but 300
billion. Still, we can't force them. Even top management of the
companies with state participation must anticipate what will happen
and ensure the stability of their companies. To this end, the
Government must work very closely with them and ensure, along with the
Central Bank, foreign currency and ruble liquidity whenever it is
necessary.

VIKTORIA PRIKHODKO, MOSKOVSKY KOMSOMOLETS NEWSPAPER: Good afternoon,
Mr President. The number of beds in hospitals in several regions, and
mainly in Moscow, is decreasing. Therefore, the number of staff is
decreasing. What do you think about that? And will a similar
experiment be carried out in other regions? People are concerned that
as a result of the reform they will not be provided with the right to
medical aid that is guaranteed by the Constitution. Thank you.

VLADIMIR PUTIN: You know, you are talking about a major issue in our
life at present, one of the fundamental issues I would say. Education
and healthcare must always be within clear sight of the state and the
regional governments. In this case, it is the Moscow Government.

Naturally, we must see, understand and react precisely to what is
happening in a particular professional community. Any changes that
occur must be introduced in cooperation with representatives of the
medical community - in this particular case. If the Moscow Government
skipped this stage for some reason, it is a mistake that must be
corrected. What should guide us in the first place when working on
issues like healthcare and education? We should be guided by people
who use the healthcare and education services. Millions of people are
waiting for the healthcare industry to improve. Our citizens,
consumers of healthcare services are those, whom we must think about
first of all. What are people saying? They are not pleased with the
healthcare. This is despite all the efforts. We must analyse what's
going on and what should be done to improve the situation.

I won't assess what the Moscow authorities have done now. They acted
within their competence. We're saying that our healthcare is expensive
but not very efficient. In many cases beds are used not for treating
patients, but for improving their health, especially in the autumn and
winter. Probably, this is not bad but the bed space is not designed
for this.

We must make our medical aid high-tech, as is being done at good
clinics, by the way in this country as well. So, for four or five days
a person receives intensive therapy in a hospital and then completes
his treatment at an outpatient clinic. How much time do people spend
in a hospital bed at the moment? I don't want to make a mistake but on
average it's not four or five days but much longer. Moreover, the city
of Moscow believes that the bed capacity is excessive by about 30
percent. Of course, something has to be done about this. Why? Because
if we keep it the way it is we will have to pay for land, electricity,
heating and the like. These are inefficient costs. They are not used
for treating people; just inefficient expenses. It's better to spend
the funds on improving the quality of medical care, equipping
hospitals and outpatient clinics with modern technology, and on
training medical personnel.

I'm now referring, as I see it, to the reform of healthcare as a whole
rather than actions of the Moscow authorities. But I think what they
have done recently is correct on the whole. First, they launched a
dialogue with the medical community. Second, they made a decision on
additional compensation for released doctors. If I'm right, they are
paying up to 500,000 rubles to medical specialists, 300,000 to the
nursing staff and 200,000 to auxiliary medical personnel.

Moreover, they are drafting a programme for retraining specialists.
Doctors may attend upgrade courses at the expense of the city from two
or three months to two years. Naturally, the city needs to decide who
will work and in what position but this cannot be done without
consulting the medical community. I'm hoping that the city of Moscow
will act carefully, very carefully, without hurting anyone. The main
point is that they should not forget the most important principle of
not only a doctor but of all transformations in healthcare - do no
harm.

NATALYA GALIMOVA, GAZETA.RU: Good afternoon, Mr Putin. Speaking to the
Federal Assembly after the referendum in Crimea you used the
expression "a certain fifth column and national traitors." You didn't
specify whom you meant but thanks to you the term "fifth column" has
again become part of the political vocabulary.

Since then, your supporters have labelled those who oppose the
authorities the fifth column. To whom were you referring when talking
about national traitors and the fifth column, and where, in your
opinion, is the line that separates the opposition from the fifth
column?

Finally, do you feel personally responsible for the revival of this
term, which increases hostilities and divisions in society? Thank you.

VLADIMIR PUTIN: I do not feel any responsibility whatsoever in this
respect. Everything I do is aimed at consolidating Russian society,
not dividing it. If you think it did happen, I believe you. It's
probably the way things really are. Maybe you have an even more acute
feel for it than I do. However, in my public statements I have to be
more cautious. I'll think about that. That said, we can't mask the
truth indefinitely and sometimes it is our duty to call the things by
their names. This is an extremely complex issue. I'll be totally
frank: answering your question isn't easy, since we're walking a very
fine line here. It would probably be very challenging to come up with
an academic definition of where the opposition ends and the fifth
column begins.

This very year, and by the way the year 2014 is the Year of Culture,
we celebrated the anniversary of Mikhail Lermontov, the genius of
Russian poetry. We all remember his lines. We remember what he wrote
about the Borodino battle: "By Moscow then we die // As have our
brethren died before." But he also wrote: "Farewell, farewell,
unwashed Russia, // The land of slaves, the land of lords, // And you,
blue uniforms of gendarmes, // And you, obedient to them folks."

Was he an opposition activist? Of course he was. He was an opposition
activist. As you may be aware, and probably a lot of you know, when he
wrote "The Death of a Poet" on the death of Pushkin, one of his
relatives saw the text and asked Lermontov to soften it a bit.
Lermontov was so infuriated, that he actually made it even more bitter
and edgy. The poem ended with "And your black blood won't wash away //
The poet's sacred blood."

He was definitely opposing the authorities, but I think he was also a
patriot. This is very fine line. After all, he was an officer, and a
very brave and courageous one, who wasn't afraid to get into the line
of fire in the country's interests. By the way, in the last movie by
Nikita Mikhalkov, such officers, who actually brought these efforts to
their logical end, the revolution, were later killed by
revolutionaries. Maybe if they could get a second chance, they would
not have done what they did from the outset to destroy Russian
statehood.

After all, the line that separates opposition activists from the fifth
column is hard to see from the outside. What's the difference?
Opposition activists may be very harsh in their criticism, but at the
end of the day they are defending the interests of the motherland. And
the fifth column is those who serve the interests of other countries,
and who are only tools for others' political goals.

POLINA DANILOVA, STUDENT NEWSPAPER OTKRYTKA, THE INSTITUTE FOR THE
HUMANITIES AND INFORMATION TECHNOLOGIES (IGUMO): Good afternoon. This
year the institute joined the nationwide Gifted Children programme. We
have created an online platform for identifying and supporting the
gifted children in all Russian regions. This helps foster a feeling of
patriotism, social responsibility to the country and also
professionalism. It's important that it is not a commercial but a
social project that is implemented by young people and for young
people. And now I'd like to ask my questions. Will these socially
significant projects receive federal assistance? Mr Putin, are you
personally ready to support our initiative? We really hope for your
assistance and support. Thank you for your answer in advance, and
please come to IGUMO. We know that you'll like it. Thank you.

VLADIMIR PUTIN: Just a second, how do you plan to implement this in practice?

POLINA DANILOVA: We have launched the Gifted Children portal in trial
mode, and will open it to the public in February. It is a professional
online venue where children will be able communicate on professional
issues. It will have...

VLADIMIR PUTIN: So they will communicate there, but what will you do?

POLINA DANILOVA: There will be 25 categories, from which they can
choose what they like and what is interesting for them. They will
interact, share opinions and learn about contests they can participate
in.

VLADIMIR PUTIN: I see. Yes, this is a very good and important initiative.

I wish you success. Of course, we'll try to support the largest
possible number of projects in this field, including yours. I'll ask
my colleagues to collect information about what's being done and
where, and how we can help you.

As you know, I have recently said in my address [to the Federal
Assembly, that there would be scholarships for gifted children, the
school graduates who enroll at universities, additional scholarships
paid by the government until they graduate from their universities. As
for what I personally can do, I'll tell you a secret. It concerns a
small project I initiated after the Winter Olympics, a permanent
winter sports training centre for children in the Imereti Valley. This
project has been launched. But the next thing I'm going to say... The
Minister of Sport is probably listening to this broadcast. I hope he
won't faint at hearing what I'm about to say...  I want to change this
project. I want this centre, which is a big and very impressive
building right on the Black Sea shore... First, it should be a
non-governmental project, and, second, there should be two other parts
aside from the children we have been bringing from the country's
children's sports schools. I mean that we should additionally bring
children from the nation's physics and mathematics schools and from
music schools. This children's centre should consist of three parts -
sports, music and mathematics. I have great hope that in the course of
this work... Currently there are 200 young athletes from all over the
country and they will stay for 21 days. The same arrangement should be
applied to children from music schools and from physics and
mathematics schools. This will help us and the specialists who will
work on the ground to choose the most gifted children, to get a good
look at them, to work with them almost  individually, and to help them
at the next stage to find themselves at a university or in life. So,
we will move together in this direction. Thank you very much.

ALEXANDER YUNASHEV, LIFE NEWS: Good afternoon, Mr Putin. A year ago,
you pardoned Khodorkovsky. He promised you then that he would not
engage in politics. But today he declares almost presidential
ambitions. My question is: do you have any regrets?

VLADIMIR PUTIN: And where will he run for president? (Laughter)

ALEXANDER YUNASHEV: My next question is this. Is he a political
opponent or  an opponent and a patriot into the bargain? How do you
see it?

VLADIMIR PUTIN: Well, do you have one question or two?

ALEXANDER YUNASHEV: I have three.

VLADIMIR PUTIN: Three! What will the others do while we debate all
this until the morning?

Well, Mr Khodorkovsky did ask for a pardon, at least he sent a
relevant petition and seemed to have no intention to engage in
politics. But when I was considering the pardon, I didn't proceed from
what he could or couldn't do, or whether he would or wouldn't engage
in politics. It's his choice and he has the right to do it like any
other citizen of the Russian Federation, provided he conforms to the
necessary criteria, including for top positions in the country. Well,
God help him! Let him work. As for me, I took my decision out of
humanitarian considerations. He said in his letter that his mother was
gravely ill. You know, mother is sacred. I am not being ironic. And he
had almost served out his term in prison. Did it make any sense to
keep him there, bearing in mind that he wouldn't even have a chance to
say good-bye to his mother? That's what it was all about, and he said
as much in his letter. I have no regrets and I think I did the right
thing.

PAVEL PCHYOLKIN, CHANNEL ONE: Mr Putin, my question is about the
Olympic Games and about sports and politics. The Olympic Games and
their success both in terms of their organisation and the athletes'
performance was one of the most spectacular events of this year. It
was a huge project. We could hope for a multiplication effect in the
economy. After all, we've built an immense infrastructure, made
enormous investments and demonstrated that this country is capable of
implementing projects on this scale.

Don't you think that Russia did not have a chance to benefit from the
Olympic Games because of the tragedy in Ukraine?

And one more question. We are now preparing to host the 2018 FIFA
World Cup. It's quite an expensive event that requires a lot of
investment. In the wake of the sanctions, falling oil prices and the
falling ruble, will Russia be capable of hosting the World Cup at all?

VLADIMIR PUTIN: First, let me talk about the Olympics. I think we
achieved everything we wanted in the preparation of and the hosting of
the Olympic Games. We achieved even more than we dreamt of. We won the
Olympics for which I would like to give special thanks to our Olympic
and Paralympic athletes who are the real heroes of the Games.

Regarding Ukraine, it's true, the Games were just coming to a close
when these tragic events began to unfold. But it was not our fault. We
did not start the coup. It had nothing to do with us. I wish it had
never happened, but it did.

Speaking about whether we are pleased with the Olympics, of course we
are pleased. By the way, we can see this from what is happening with
the facilities. As you probably know, in many countries the Olympic
facilities are just left empty after the Games. Completely empty.
Between the seasons our facilities are more or less empty too.

But we planned some efforts in advance and built the Formula 1 track
there. Then the Olympic Park hosted the World Chess Championship and
some other events. Let me see. I think you know that the facilities
are all booked up starting in December and until the end of February.
I'm certain that they'll be very busy until the end of the alpine
skiing season. Totally. What does this mean? It means that Russians
now have a year-round centre for health and recreation, for both
winter and summer sports.

Besides that, we'll continue to host major competitions in bobsleigh
and other sports. I just mentioned in another response that we'll be
developing children's sports. There is now a children's ice hockey
team in Sochi. It's a great team. It loses sometimes but it's a young
team and it wins sometimes too. The team has great fans. I remember
Governor of the Krasnodar Territory Tkachyov told me, "We don't need a
team. We don't have a hockey culture. We want football. Nobody will be
interested." I visited the stadium just recently, a month ago, and it
was full. Ten thousand people! Full house. We must say thank you to
the fans. Generally, ice hockey fans are quite civilised. They come to
the games with their children, wives, with their entire families. It's
great. The facilities will be developed further.

Speaking of the World Cup - yes, it is expensive but let me remind you
that unlike many other countries that even refuse to host major
competitions - do you know how these countries are different from
ours? The number of people doing physical fitness and sports per 1,000
population is much higher there than in Russia.

Why is that? This is partly due to the poorly developed sports
infrastructure. If we want to live longer, if we want our people to be
healthy and go to skating rinks instead of liquor shops, then skating
rinks must be available. We need to create new football fields, hockey
rinks and fitness centres. Importantly, people should spend their
money on gym memberships rather than on partying with friends. We need
to create a culture where people practise physical fitness and sports.
Then, the life expectancy in Russia we will be more than the current
70-71 years.

In this regard, we need to hold such events as the World Cup, because
the number of children playing football will increase dramatically.
Among other things, this infrastructure will be built not just in
Sochi, but in more than 10 other Russian cities paired with the
development of transport infrastructure, the healthcare system, etc.,
as was in Sochi. It's just another way of investing in Russia, and
this money will be well spent.

KSENIA SOBCHAK, DOZHD TV CHANNEL: I have two questions for you, if you will.

First, while everyone is concerned about the developments in Ukraine,
there are events unfolding in the Chechen Republic that concern us.
Namely, Head of the Chechen Republic Ramzan Kadyrov has de facto
announced that Russian laws and the Russian Constitution do not apply
in the Chechen Republic. He has publicly stated that there would be
certain reprisals regarding relatives of people accused of terrorism
who have not yet been convicted in court. In this regard, I would like
to get an answer from you: as a lawyer and the guarantor of the
Constitution, will you protect the citizens who have been left
vulnerable, in fact, to pre-trial reprisals? Their homes have been
burned, and the only human rights organisation in Chechnya was
subjected to searches and even set on fire. What do you plan to do
about this?

VLADIMIR PUTIN (to Dmitry Peskov): Why did you give her the floor?

DMITRY PESKOV: I'm sorry about that.

KSENIA SOBCHAK: May I ask my second question now?

DMITRY PESKOV: Ms Sobchak, let's show some respect for others and have
one person ask one question.

VLADIMIR PUTIN: Ok, since you have the floor, go ahead and ask your
second question. What is it about?

KSENIA SOBCHAK: I would like to clarify for myself and our audience
this fine line between the fifth column and the opposition. Things are
now clear with Lermontov, but it would be nice to sort things out with
the present. Mr Putin, once you publicly stated that there was a
bullying campaign against my father at some point in time. I think
today, the term "bullying" has come back into our lives.

I'm referring not only to the harassment of Makarevich, the
allegations about invented friends of the junta (I know these people
and I'm sure that many of them are true patriots of their country), or
all the epithets like "yid Banderites" heard on federal channels. I
get the sense that federal channels are deliberately fanning hatred in
Russian society. Take for instance the episode about a crucified boy
from Slavyansk that was shown on the first federal channel where the
state has a controlling stake. This episode was considered... It was
proved to be false, but nobody apologised for it. Aren't you afraid of
such hatred in our society where some people are so strongly pitted
against others? And what are you going to do to reduce this hatred? Do
you think that people are still being divided into allies of yours and
Bandar-logs?

VLADIMIR PUTIN: Bandar-logs exist, of course. Kipling said this, not
me. As for the main topic, let's start with the first question.

I'm referring to what Kadyrov said about the relatives of terrorists,
their homes, expelling them from the republic and so on. Naturally, I
can have only one view on this: in Russia everyone must obey the
existing laws and nobody is considered guilty until this is proved by
court. This is the first point.

Second, I've already said that life is complicated. I'll tell you
something from the practical experience of counterterrorism units.
Generally - I won't say always - the relatives of people who commit
acts of terror know about them in the overwhelming majority of cases,
if not more. But this does not give anyone the right, including the
head of Chechnya, to resort to extrajudicial reprisals. I absolutely
agree with you on this.

Moreover, the relevant law-enforcement agencies are now conducting a
preliminary investigation into this. It is necessary to find out who
burnt down houses and killed them (relatives of the terrorists)
because they were wearing masks.

As for Kadyrov's statement, it could have been simply emotional, and
then someone seized on it. I understand the emotions because 14 police
officers were killed in this act of terror. It all started with the
murder of traffic policemen. It wasn't in a firefight. These people
were savagely shot point-blank and many died later on. All in all, 14
were killed and 38 wounded, some of them seriously.

As you know, thousands took to the streets to demonstrate. Under the
circumstances, the head of the republic made some emotional
statements.

I'm sure that these remarks fully lived up to people's expectations.
But he had no right to say that. And it would be absolutely correct to
verify the facts. To repeat, apart from public remarks and the
subsequent actions, including actions to destroy these residential
buildings, a probe should be conducted to establish what really
happened. Maybe someone took advantage of that and did it. Maybe not.
And then the law enforcement agencies will need to respond
appropriately. At the same time (and you know this very well),
unfortunately or fortunately, such methods are used in international
antiterrorist practice. They are most actively used in Israel. But
this is not all. This is not about Israel. We saw that after 11
September, torture was legalised in the United States. How can that be
explained? Furthermore, it was not only legalised, but a methodology
for using torture was developed! So life is complicated and diverse,
but we must follow the law. I agree with you there. If we go outside
the law, it will only lead to chaos. We'll investigate the facts and
respond appropriately.

Now regarding what you described as persecution campaigns. I just know
- I learned about that when I came to Moscow. Even before that, I had
suspicions that persecution was organised against your father.
However, when I came to Moscow, I found direct evidence of it. Even
then it seemed strange to me that after Anatoly Sobchak acquired a
dismal 100 square metre flat, two criminal cases were opened against
him within a week: They don't open [criminal cases] for months, but
now two were opened within a week. Then, during an election campaign,
the fact that criminal cases were initiated was included in leaflets
that were dropped over Leningrad from airplanes. Of course, it was a
clearly orchestrated campaign, and it was organised by certain
government officials in the struggle against him. I would like to
assure you that there has been no organised persecution of people who
disagree with our actions, say, in Ukraine or in Crimea or on some
other domestic political issues. None of the official power bodies, no
official government representatives are doing this. If there is some
reaction from the public, from the people who disagree with this
position, the people who have encountered this today should understand
that they cannot monopolise the right to make sweeping accusations,
that there are people who disagree with their position and that they
will also face accusations. It's important to learn to react to this
properly. It is unnecessary to make such a hue and cry, shouting from
the rooftops: Help, I'm being harassed! Reaction should also come from
the public domain.

As for the government bodies, let me reiterate that there were no and
won't be any attempts, instructions or efforts to stigmatise anyone.
Unlike Russia, this is not the path chosen by, say, our European
partners. For example, Gazmanov, Valeria and Iossif Kobzon were banned
by Latvia's Foreign Ministry from entering the Latvian Republic. This
is an example of an official position of a government body. The
Russian authorities never have adopted or will adopt such a stance.

ALEXEI ANISHCHYUK, REUTERS NEWS AGENCY: Good afternoon, Mr Putin. In
the last year Russia has been engulfed in what could be called one of
the gravest crises in its contemporary history. It all started at the
end of 2013 with the developments in Ukraine, followed by a
deterioration in relations with the West, reminiscent of the "cold
war", and in recent days we have been witnessing an acute currency
exchange crisis, which could grow into a financial and economic
crisis. The risks are there. I know all too well that you often tend
to blame some external forces for everything. I also know that some in
the Russian elite, from your inner circle, who are the most
well-informed people in Russia, despite all their public statements,
tend to lay the blame for some things on you as the person who has
been in charge of taking all the key decision in Russia for the last
15 years...

VLADIMIR PUTIN: What are the names?

ALEXEI ANISHCHYUK: Unfortunately, I can't tell you. They usually talk
on condition of anonymity. But lately such statements could be heard
in their conversations with reporters.

My question in this respect is the following: To what extent are you
confident that your inner circle unconditionally supports you? Do you
see any risk of a government coup or even a palace coup? You have
stated on a number of occasions what you would do in case of an
"orange revolution" or, God forbid, a "red revolution." But do you
have a plan in the event of treachery in your inner circle or a palace
coup?

Thank you.

VLADIMIR PUTIN: Regarding a palace coup, I can assure you that we
don't have "palaces," so a palace coup isn't really possible. The
official presidential residence is in the Kremlin, it is well
protected, which is an important factor for the stability of state
institutions in Russia.

But this is not what stability is all about. It's actually based on...
There is no other stability as solid as the support of the Russian
people. I don't think you have any doubts as to whether our key
foreign and domestic policy initiatives benefit from such support.

Why is this happening? Because people feel deep down inside that we,
and I in particular, are acting in the interests of the overwhelming
majority of Russians.

As for the question of who is to blame and who is not for the
developments in Ukraine that kicked off the series of cataclysms we
are currently witnessing, you know very well what I think. I have on
many occasions said that a coup was committed and that it was a big
mistake. Eastern Europe, our neighbours, including Ukraine, is not a
banana republic, not even North Africa or Somalia, where you can stage
a coup using some special tools, militants, or people who are unhappy
with government policies. You are saying that I'm accusing someone.
No, I'm not accusing anyone, I'm just stating a fact.

Without going into details, I will say a few words about our
discussions on this account with our partners. You may be aware of the
agreement between the opposition and the Ukrainian government of 21
February. The agreement was signed by the three foreign ministers of
Germany, Poland and France as guarantors of the agreement. Do you
follow me? We had talks with the leaders of the United States, who
kept telling us, "Yanukovych should not use force no matter what." He
didn't and what he got was a coup. We are now being told, "What could
we do? The situation got out of control, which is called an excessive
act in criminal law." I beg to differ. If that's an excessive act,
then what were you supposed to say, even if you weren't able to stop
these radicals who broke into the presidential administration and took
over the Government building? You should have told them as follows,
"We do want to see you in Europe, we do want you to sign and ratify
the association agreement, you are indeed part of the European family,
but if you act this way, you will never be part of Europe, and we will
never support you. Go back to the agreement of 21 February, form a
national unity government and start working together."

I'm sure that if that was their position, there would be no civil war
in Ukraine with its many casualties. Our colleagues have adopted a
different stance. From giving out cookies during the Maidan protests,
they moved on to political and economic promises. By the way, the
Ukrainian people need the money, but no one is going to do this on
their own, only through international financial institutions.
Therefore, I believe that our position was completely justified and
objective from day one.

Now about the elites. You know, there is elite wine, there are elite
resorts. There are no elite people. You know what the Russian elite
is? It's a worker. A farmer. Someone who carries our entire country on
his shoulders. Has been carrying it for centuries, and will carry it
for centuries to come. All other levels, including elites and others,
are absolutely groundless. There are rich people and poor people, sick
people and healthy people. But they are all equal before the country
and before the law. There are rich patriots. You may wonder if that's
possible. Maybe, some are unhappy. Of course, what would they be happy
about? They are disgruntled. But the question is, how they are going
to get out of this situation. Always being dependent on someone,
always being on the hook?

One of our companies with offshore incorporation on some islands has
made a decision on the dividends. It's a legitimate company operating
in an offshore zone, a large company. A decision was made. Do you know
what happened next? As there were some people covered by sanctions
there, the local directors declined and said they could not transfer
money for dividend payments to them, and that they had to hold
consultations. "Who are you going to consult? You must pay, it's the
law." They said this was true, but that they would not honour the law.
They were told, "That's an outrage, we're going to take you to court."
And do you know what they did? I'll tell you: They resigned. This is
nothing but a circus act. They resigned, and the money cannot be
transferred without their signatures. Moreover, it's impossible to
appoint anyone to these positions because an order was issued not to
fill these vacancies. So, the money is hanging in midair.

If you are speaking about representatives of the Russian business
community, do they want to live this way? Most of them don't. Only a
powerful Russian state can become the main protector of Russian
citizens' interests, regardless of what they are doing, business
included.

MIKHAIL BAZHENOV, BUSINESS FM: Good afternoon. Mr President, in your
annual Address to the Federal Assembly, you said that there were plans
for an amnesty of capital. A week has already passed, but we have
heard no other details. I would like to ask about some details. When
will the amnesty start, how long will it last, and how much do you
plan to repatriate? And here is probably the most important thing: How
do you envision the mechanism of this amnesty? Will all capital be
repatriated, including illegal capital, or not? Or, perhaps, some
screening procedure will be introduced? And how would businesses
respond to the screening concept? Will they believe that it would be
possible to pass this procedure and to continue calmly doing business
in Russia? In the long run, what guarantees will they receive that
they will not have to answer any questions from law enforcement and
tax agencies, etc., after registering their businesses in Russia?
Thank you.

VLADIMIR PUTIN: I see. First, how much do we plan to return? We do not
set any capital repatriation targets at all. The repatriation of
capital is not the main issue. This is not a fiscal measure. This is
about legalisation. If a company wants to keep its money and assets
abroad, it is free to do so. This issue implies legalisation, so that
they come and register here. This is the most important thing. I want
to make this clear.

Second, I will personally see to it that there are no violations
regarding mechanisms and guarantees. And I want to warn all my
colleagues, including those from law enforcement agencies, that we
will take extremely tough action against those violating the principle
that I just mentioned.

As for screening, I believe that there should be no screening
procedures. Everyone wishing to come here, register and become
legalised here should have this right. I have noted many times that a
presumption of innocence exists with regard to criminal cases, and
everything is considered legal unless there is evidence to the
contrary.

Finally, I would like to say a few words about mechanisms. These
mechanisms have not been worked out so far, and we need to think about
this. The Government is working on this now. I believe that we need to
legalise not only offshore property, but also property that has been
registered, reregistered or hidden at front companies, by relatives,
or in some other way in Russia. Everyone should declare their property
once and for all, turn the page and proceed.

YEVSTOLIYA TARANDA, ARCTIC TV NETWORK: Good afternoon, Mr Putin. I
represent Yamal Region, and the Yamal Region proper. Many people are
sending their regards and words of support to you. Hang in there on
the external contour. I have a question about my region. People are
worried that the governors of Yamal and Yugra [the Khanty-Mansi
Autonomous Area] will no longer be elected. Are there enlargement
plans, and will these regions - Yamal, Yugra and the Tyumen Region -
be merged? You have been to our region more than once, and you know
about our conditions and specifics, and that we don't want this to
happen. What do you think on this issue? Will there be a single huge
federal entity from Kazakhstan to the Arctic?

VLADIMIR PUTIN: Let's talk about federal entities - please, sit down -
their merger and all other related issues. There is a federal law,
according to which regions can be merged only based on the free
expression of will of the people who live there. This is done
differently in different regions: It can be done through a referendum
or by decision of the given region's legislative assembly. No decision
should be forced on people from above; doing so is counterproductive.
At the same time, as everyone here knows, our productive forces are
distributed around the country extremely unevenly. As a result, one
region's revenue may differ from that of another region by 26 times or
even more, if my memory serves me. And people's living standards,
including healthcare, education and the like, also differ radically,
which is bad, overall.

However, I'd like to say again that this is a highly delicate matter,
especially when it concerns ethnic republics, and we must never force
any unification plans on people. Only people themselves can make the
correct decision based on their life experience and their
understanding of developments in the economy and social sphere.

Of course, there could be some pro-unification political forces, but
then there are also anti-unification forces... This should proceed as
openly as possible and with the public involved to the greatest
extent. Decisions must not be forced from above.

JOHN SIMPSON, BBC: Western countries almost universally now believe
that there's a new Cold War and that you, frankly, have decided to
create that. We see, almost daily, Russian aircraft taking sometimes
quite dangerous manoeuvres towards western airspace. That must be done
on your orders; you're the Commander-in-Chief. It must have been your
orders that sent Russian troops into the territory of a sovereign
country - Crimea first, and then whatever it is that's going on in
Eastern Ukraine. Now you've got a big problem with the currency of
Russia, and you're going to need help and support and understanding
from outside countries, particularly from the West. So can I say to
you, can I ask you now, would you care to take this opportunity to say
to people from the West that you have no desire to carry on with the
new Cold War, and that you will do whatever you can to sort out the
problems in Ukraine? Thank you!

VLADIMIR PUTIN: Thank you very much for your question. About our
exercises, manoeuvres and the development of our armed forces. You
said that Russia, to a certain extent, contributed to the tension that
we are now seeing in the world. Russia did contribute but only insofar
as it is more and more firmly protecting its national interests. We
are not attacking in the political sense of the word. We are not
attacking anyone. We are only protecting our interests. Our Western
partners - and especially our US partners - are displeased with us for
doing exactly that, not because we are allowing security-related
activity that provokes tension.

Let me explain. You are talking about our aircraft, including
strategic aviation operations. Do you know that in the early 1990s,
Russia completely stopped strategic aviation flights in remote
surveillance areas as the Soviet Union previously did? We completely
stopped, while flights of US strategic aircraft carrying nuclear
weapons continued. Why? Against whom? Who was threatened?

So we didn't make flights for many years and only a couple of years
ago we resumed them. So are we really the ones doing the provoking?

So, in fact, we only have two bases outside Russia, and both are in
areas where terrorist activity is high. One is in Kyrgyzstan, and was
deployed there upon request of the Kyrgyz authorities, President
Akayev, after it was raided by Afghan militants. The other is in
Tajikistan, which also borders on Afghanistan. I would guess you are
interested in peace and stability there too. Our presence is justified
and clearly understandable.

Now, US bases are scattered around the globe - and you're telling me
Russia is behaving aggressively? Do you have any common sense at all?
What are US armed forces doing in Europe, also with tactical nuclear
weapons? What are they doing there?

Listen, Russia has increased its military spending for 2015, if I am
not mistaken, it is around 50 billion in dollar equivalent. The
Pentagon's budget is ten times that amount, $575 billion, I think,
recently approved by the Congress. And you're telling me we are
pursuing an aggressive policy? Is there any common sense in this?

Are we moving our forces to the borders of the United States or other
countries? Who is moving NATO bases and other military infrastructure
towards us? We aren't. Is anyone listening to us? Is anyone engaging
in some dialogue with us about it? No. No dialogue at all. All we hear
is "that's none of your business. Every country has the right to
choose its way to ensure its own security." All right, but we have the
right to do so too. Why can't we?

Finally, the ABM system - something I mentioned in my Address to the
Federal Assembly. Who was it that withdrew unilaterally from the ABM
Treaty, one of the cornerstones of the global security system? Was it
Russia? No, it wasn't. The United States did this, unilaterally. They
are creating threats for us, they are deploying their strategic
missile defence components not just in Alaska, but in Europe as well -
in Romania and Poland, very close to us. And you're telling me we are
pursuing an aggressive policy?

If the question is whether we want law-based relations, the answer is
yes, but only if our national economic and security interests are
absolutely respected.

We negotiated WTO accession for 19 years or so, and consented to
compromise on many issues, assuming that we are concluding cast-iron
agreements. And then... I will not discuss who's right and who's wrong
(I already said on many occasions that I believe Russia behaved the
right way in the Ukrainian crisis, and the West was wrong, but let us
put this aside for now). Still, we joined the WTO. That organisation
has rules. And yet, sanctions were imposed on Russia in violation of
the WTO rules, the international law and the UN Charter - again
unilaterally and illegitimately. Are we in the wrong again?

We want to develop normal relations in the security sphere, in
fighting terrorism. We will work together on nuclear
non-proliferation. We will work together on other threats, including
drugs, organised crime and grave infections, such as Ebola. We will do
all this jointly, and we will cooperate in the economic sphere, if our
partners want this.

SAIDA ZHARKINOVA, MIR TV COMPANY, KAZAKHSTAN: Good afternoon, Mr
President. Saida Zharkinova from Kazakhstan. Naturally, my question
concerns integration issues. Starting from January 1, 2015, the
Eurasian Economic Union will become fully effective, and the three
countries - Kazakhstan, Belarus and Russia - will be joined by Armenia
and Kyrgyzstan. Is there a cause for concern with the current crises
in our economies? Do you think this common market could turn into a
common crisis?

VLADIMIR PUTIN: You know, Kazakhstan, as well as the Russian
Federation, is a gas and oil producing country, so regardless of the
integration under the Eurasian Economic Union, one way or another
Kazakhstan - as well as Russia - is facing an unfavourable scenario on
foreign markets. Will we be able to handle this situation? I have
already said that we will inevitably emerge from this situation with
positive results, due to global economic growth and demands for energy
resources, which we have now and will have in future, and due to the
fact that our economies, one way or another, will adapt to the low
prices for energy resources.

But what is at the core of the proposal made by President Nazarbayev a
while ago, which we are successfully implementing, regarding
integration? It would be easier to do this together, providing free
space for transition of goods, workforce and capital. Of course, this
is easier through joint efforts. Moreover, during the existence of the
Customs Union, our trade turnover grew by 50 percent in recent years.
This is a serious objective indicator, and we will rely on the
positive achievements related to integration.

There is a woman from the newspaper Krestyanskaya Zhizn raising her
hand... We cannot do without farmers, considering this year's grain
harvest of 104 million tons. Let's congratulate our farmers once more
on this achievement and thank them.

SVETLANA SAMSONOVA, KRESTYANSKAYA ZHIZN NEWSPAPER, VOLGOGRAD: Good
afternoon. My question is about agricultural development, which is
impossible without resolving human resources issues. Let me give you
an example: we have a farmer in the Volgograd Region, Mikhail Rostov.
A man who worked for him, a turner, has retired, and he hasn't been
able to find a replacement for a long time. Mr Rotov offered an
adequate salary, by agricultural standards, as well as accommodation
and meals, but no one is interested.   This is a problem other farmers
face as well, especially in vegetable growing: no one is willing to
work hard, and farmers fear that very few people will be working in
the fields, for instance, next year. Farmers believe that this
workforce issue is a threat to national food security. Do you agree?
What can be done about this? How can the personnel problem be solved
in the agricultural sector?

VLADIMIR PUTIN: Needless to say, I share the concern of agricultural
producers over the difficulties of working under the current
conditions, but on the other hand I cannot but share the optimism of
those who believe that the clearing of the domestic market for our
producers is creating many serious opportunities for developing the
agriculture industry.

As for the personnel, we should think about this in advance, of
course. The state is thinking about it. I'm referring to the training
of middle- and high-skilled workers. We should use all of these
training opportunities. We have wonderful, simply wonderful
universities and vocational schools that train agrarians. Our
Agricultural Academy has become part of the big Academy and I'm hoping
that it will produce a positive synergetic effect for this important
branch of the Russian economy. Apart from everything else (we talked
with the Prime Minister about this yesterday), the Government has
decided to add about 20 billion rubles to the agriculture industry. So
next year, support to agriculture will be about 200 billion rubles and
I hope the agrarians will feel it.

It goes without saying that it is very important for us to make sure
that the funds received from the sale of a record (104 million tonnes)
harvest reach the agricultural producers and by no means land in the
hands of some middling go-betweens.

As for the personnel... Well, we must hire them in time. Food prices are
objectively and sometimes without a reason, still increasing, which is
not very good for consumers, but this is an opportunity for
agricultural producers. I hope that everyone will take advantage of
it.

ALYONA YEVTYAKOVA, GUBERNIYA TV CHANNEL, VORONEZH REGION: Mr
President, tell me please... In my region - it is now in the top ten in
terms of commissioning new housing - the percent of purchases with
mortgages has increased to 60 percent. Considering the current
economic situation, what will happen to mortgages, loans and the Young
Family programme?

If I may, I'd like to ask you another question - people won't forgive
me if I don't ask it - and I probably shouldn't go back to my city...
Tell me, please... When I was getting ready for the trip I asked my
acquaintances: what question would you ask Mr Putin? And all of my
aunt's friends said in unison: he is Russia's number one bridegroom!
Yes, that's it. A bachelor's life for more than a year. Does Mr Putin
have the time for a private life? If possible, please start from the
first reply. Thank you very much.

VLADIMIR PUTIN: Please pass on my heart-felt greetings to the friends
of your aunt. Thank them for such attention.

As for mortgages, this is a serious issue. This is indeed a very
serious issue. Now that the Central Bank's key interest rate is 17
percent, it is difficult to offer mortgages, if it's possible at all.

I must say that in the past few years the use of mortgages has grown
at higher rates than we expected. I'm afraid to make a mistake in
absolute figures but they were higher than expected. As for the
interest rate... It has changed - at first 9.5 percent, then 10 percent,
but people were still taking out loans.

Moreover, the Central Bank's key interest rate has been increasing
from the initial 5.5 percent throughout the year, but the mortgage
market did not shrink. Strange though it may seem, private banks did
not increase mortgage rates - they kept them down. I hope that this
time banks won't rush to review their mortgage rates.

Why? Because it is important for people, for delivering on our social
commitments related to provision of housing, as well as for the
economy, since some 30-35 percent of the proceeds from mortgage loans
are channelled directly into the construction industry, which has a
high multiplier effect for many other industries.

That said, there is no doubt that if this rate remains at this level
for some time, the Government and the Bank of Russia will have to come
up with some special tools to support the mortgage market, including
both mortgage rates for special categories of borrowers (I mean young
professionals and researchers, young families and servicemen) and
mortgage lending in general.

What are our options? Actually, there are several. But they all boil
down to one word: subsidies. There is nothing else we can offer. This
is a very important segment for the people and the economy. We must do
our outmost to preserve it, and I'm sure that we will succeed.

Why am I so confident? As we have already mentioned, and as I've just
reiterated, the key interest rate was raised to maintain macroeconomic
stability. This was the right thing to do, since it is by ensuring
macroeconomic stability that we will be able to preserve a healthy
economy. It is for this reason that I'm optimistic that sooner or
later this healthy economy will resume its upward trend.

As you know, while raising the key interest rate, the Bank of Russia
has maintained borrowing costs for small and medium-sized businesses
at 6.5 percent, while all other businesses working on so-called
projects, i.e. benefiting from project funding, have a rate of 9
percent. The only problem here is that the Government has yet to
propose relevant projects, but this is how it should work.

Let me remind you and the entire business community how this mechanism
works: if you have a sound, economically viable, profitable and
sustainable project, you can present it to a private bank, the lender
will have to receive approval from a Government commission, and this
commission must confirm that the project is actually efficient and
viable, after which the bank receives the necessary funding from the
Central Bank at a rate of either 6.5 or 9 percent. This goes for small
and medium-sized businesses and project financing. A similar scheme
could be created for the mortgage market.

As for your aunt, I've already sent her my greetings. Everything is
fine, don't worry. (Laughter) I recently had a conversation with a
friend of mine from Europe, who is a big boss there. After all that
happened last year, he asked: "Listen, is there love in your life?"
And I said: "What do you mean?" He said, "Is there anyone you love?" I
said, "Well, sure." "And does someone love you?" I replied "Yes." He
must have thought I was neglected. So he said "Thank God," and drank a
shot of vodka. So everything is fine, don't worry.

Yes, I still have a good relationship with Lyudmila. We see each other
regularly. And our children too, of course. I don't see them as often
as I would like to, but still, everything is fine.

Let's give the floor to the gentleman from Turkey and then to Georgia,
all right?

VLADIMIR MAMATOV, REPORTER NEWSPAPER: Good afternoon, Mr Putin.
Vladimir Mamatov, Reporter newspaper, from Kirov, which used to be
Vyatka.

DMITRY PESKOV: But you are not from Turkey.

VLADIMIR MAMATOV: Well, true, it's just happened... Thank you for the applause.

Compared to the global macroeconomic issues and my colleague's aunt,
my question is really insignificant. There was a question regarding
agriculture about a machinist, which I really liked. My question is
minor but still important. You see, my region produces kvass.

DMITRY PESKOV: Kvass?

VLADIMIR MAMATOV: Vyatka kvass.

VLADIMIR PUTIN: I'm guessing you had some kvass this morning.

VLADIMIR MAMATOV: Mr Putin, I wanted to bring some for you but
security wouldn't let me.

VLADIMIR PUTIN: You know what they say sometimes? I get a gift and
they ask, "Mr Putin, do you want to eat or drink it, or would you like
it to be checked first?"

VLADIMIR MAMATOV: So you don't have a taster. All right. The question
is, you see, we have been producing good kvass for a long time and
we've been making a lot of it.

VLADIMIR PUTIN: I can see that. (Laughter)

VLADIMIR MAMATOV: But the problem is neither Auchan nor other major
retail chains will buy it even though the taste and price are better
than Coke, Pepsi and whatever else they make. What should we do about
Vyatka kvass and the supermarket chains? Is there a way to get it on
the shelves?

VLADIMIR PUTIN: Well, you know, jokes aside, this is a very good
question. I don't know how unhealthy Coke is but many experts say it
is, especially for children. I don't want to offend Coke, it's their
business. But it is true we have our own non-alcoholic drinks (kvass
is non-alcoholic, right?), including kvass. Our water is also great,
and we clearly should promote it. You know, it cannot be done by fiat.
We can't force anyone out of the market or create unfavourable
conditions for the investors that came here and occupied a particular
niche. We can't do it. But we can and we will try to help you win back
the domestic market, which is rightfully yours. It is not an easy
process but we will try to help.

Now let's pass the microphone to the Turkish journalist.

FUAD SAFAROV, CIHAN NEW AGENCY: Mr Putin, you were recently in Turkey
on an official visit.

But it's odd: after you left, European bureaucrats rushed off to Turkey.

VLADIMIR PUTIN: Pardon?

FOUAD SAFAROV: European bureaucrats. By all appearances, they wanted
to convince Turkey to join the sanctions against Russia. Could you
comment on this? And what do you think about the prospects for
bilateral relations?

My next question is this. There is an unrecognised country, Northern
Cyprus, which has been exposed to European sanctions for the last 40
years. They expect Russia as a power to help solve the Cypriot issue.
Thank you.

VLADIMIR PUTIN: Let's start with the last question.

As far as Cyprus in general is concerned - both Northern Cyprus and
the Republic of Cyprus in the south - you know that we are trying to
take a balanced approach and to bring about a solution that would suit
both the northern, Turkish, and southern, Greek, parts of the island.

We have very good relations with Turkey. Accordingly, this in one way
or another applies to Northern Cyprus. I am not mentioning Greece,
because we have a special relationship with Greece, keeping in mind
our religious affinity. It's a specific and completely local issue,
but it's very important for people.

As before, we will seek a balanced solution without impositions from
the outside (this is very important) in order to let people come to
terms on their own. As soon as you interfere from the outside and
impose something, these agreements are always short-lived.

But still there is certain optimism: occasionally more optimism,
occasionally less. There are contacts and a certain liberalisation and
easing of requirements on the border. We will continue moving in this
direction.

As far as attempts to convince Turkey to join the sanctions are
concerned, I had no doubt about this. While on a visit there, I told
Mr Erdogan: "Perhaps we'd better not say certain things in public
right now. Why poke the bear? They'll come rushing in tomorrow." Well,
Mr Erdogan's a strong character. He could have avoided doing that. I
said: "Let's not announce certain things." He thought for a moment and
said: "No, we will." It's our Turkish partners' choice. He said: "We
have nothing to hide. We aren't going to steal anything from anyone;
we are taking care of our bilateral relations."

You know, there have been many tragic and dramatic episodes in our
history, as well as many good things, during the Atatürk epoch. In
this regard I'd like to say the following. In Europe, too, it was far
from an easy ride in relations between different countries and
peoples.

I think Germany and France, to mention just these two, are setting us
a very good example of relation-building under the current
circumstances. There have been so many wars between them! World War I,
World War II, 1870 and so on... But today they are members of a single
union and cooperate very effectively. We should emulate good examples.

Russia and Turkey have very many - I'd like to stress this -
coinciding regional interests. Moreover, a number of regional problems
cannot be solved unless Turkey joins in to help address them. This is
why we are highly interested in promoting our relations, and we will
do just that.

VLADIMIR PUTIN: We can't ignore Xinhua. There are 1.3 billion people
living in China.

FAN WEIGO, XINHUA NEWS AGENCY: Thank you.

Mr President, how would you describe Russian-Chinese relations in the
outgoing year and their prospects for the coming year? We know that
BRICS and SCO summit meetings will be held in Ufa next year. What do
you think about Russian-Chinese cooperation within these
organisations? Thank you.

VLADIMIR PUTIN: I'll begin at the end. I'd like to say that the SCO
was created following the collapse of the Soviet Union to resolve
border issues between China and the former Soviet republics. It proved
to be very useful and effective in this respect. We have had no
conflicts, thank God, and no problems to settle in bilateral
relations. There were many outstanding issues, but we have settled all
of them based on the principles of respect for the interests of China
and all the other SCO member states, including Russia. The SCO has
exceeded its initial mandate; it can do more than address the targets
for which it was created because it is increasingly in demand. This
would not have happened had the international community and the SCO
member states not seen that they needed to continue working together.
As you know, Iran, Pakistan, India and several other observer
countries have shown interest in working together with us. India and
Pakistan have filed applications to become full members. This issue is
on the table.

This is definitely influencing relations between the Russian
Federation and the People's Republic of China. As a country, China is
Russia's largest trade and economic partner. Our bilateral trade will
be about $90 billion this year. It has been growing despite global
economic problems, and I'm sure that it will continue to grow. Our
current priority is to diversify our trade and economic relations. We
have been moving forward in this area quite actively. I mean that we
are paying more attention to changing the structure of our trade by
increasing the share of high-tech products. As you know, we are
building nuclear power plants, and we will continue to do this, if
China is interested. We are working together in space exploration and
aircraft manufacturing, including planes and new heavy-lift
helicopters.

We are also working together in several other promising areas, but the
most important thing is that we have many common interests on the
international stage, such as international stability. We work very
closely in the UN and in the Security Council. The cooperation between
Russia and China within this forum is certainly an important element
in stabilising the international situation.

COURTNEY WEAVER, FINANCIAL TIMES: Courtney Weaver, Financial Times. I
have a question about Yevtushenkov. He was released yesterday. If
there's an actual lawsuit against him, and an actual criminal case,
why was he released immediately after he gave Bashneft to the state?
Is this is a sign that the rules of the game in Russia are changing?

VLADIMIR PUTIN: The Bashneft case has nothing to do with the revision
of privatisation because the court hasn't questioned the legality of
privatisation. The court called into question the transfer of the
property from Russian Federation ownership to regional ownership, not
the privatisation. I reiterate, this has nothing to do with
privatisation. The only thing the Investigative Committee suspected Mr
Yevtushenkov of doing was that, in their opinion, being aware of the
high price of the asset owned by the Russian Federation - and
according to the preliminary estimates of the Investigative Committee,
it was priced at about $5-7 billion - he bought it for $2 billion.
It's not that he deeply discounted the purchase price, but the fact
that by doing so he helped unauthorised owners - according to
investigators (after a number of iterations, the asset ended up in
private ownership, not even under the ownership of the Republic of
Bashkortostan) - launder their money, but the investigation has failed
to provide substantial evidence of this. So, the charges against him
were dropped. As for transferring the property from Sistema to federal
ownership, this has no relation to privatisation. I reiterate, this
only has to do with the allegedly illegal, according to the court,
transfer of federal property to regional ownership. That's all.

I hope that Sistema, which has done a lot for the development of
microelectronics and is very active in other areas, not just in fuel
and energy, will restore its position on the market and get beyond
this. We will discuss this later when I meet with business leaders
before the New Year. This is a regular meeting, and Mr Yevtushenkov
has also received an invitation.

DMITRY PESKOV: Mr Putin, what about Georgia? We promised.

VLADIMIR PUTIN: Yes, please go ahead.

TAMARA GOTSIRIDZE: I was about to conclude that you didn't want to
answer my question.

VLADIMIR PUTIN: No, no.

TAMARA GOTSIRIDZE: Georgian TV Maestro, Tamara Gotsiridze. What are
the prospects for Russian-Georgian relations? Does Russia believe
again that Georgia is a lost cause? Or can our relations reach a new
level, as the recent dynamics of Georgia's relations with the European
Union and NATO are more active than with Russia.

Is it time for the Russian and Georgian heads of state to meet? Is
there a basis and an agenda for that?

And one final question. What role can Russia play in conflict
resolution? Russia's recognition of two Georgian territories'
independence and the deployment of troops there leaves the conflict
unsettled. What can Russia offer in this regard?

VLADIMIR PUTIN: You know, as with southeastern Ukraine, the issue is
to come to terms with the people who live in these regions. At one
time I tried to convince Mikheil Saakashvili, who is now on the run,
and by the way, we have absolutely nothing to do with this. I'm sure
nobody is going to suspect us of being behind the situation where the
Georgian authorities are chasing him across the world like a rabbit.
That was not our plan. We have nothing to do with this. He can't even
get a work visa to the United States, as far as I know.

However, at one time, I kept telling him: "Mr Saakashvili, don't do
this. Don't start a military operation, no matter what." "No, no, I
will not," he promised. But he did. The result is well-known. It is
very difficult now to recover from this.

You know, I understand that this is the pain of Georgia, of the
Georgian people, and that it is a bleeding wound. But then everyone
remembers 1919. The situation was also very difficult at that time,
when, after the disintegration of the Russian empire, Georgia declared
the establishment of an independent state and Abkhazia said that it
wanted to stay in Russia. It was just the same, both the punitive
operation and hostilities. This has not been forgotten. You see, we
did not start this. We are always accused of every sin in the book,
accused of provoking something. We do not provoke anything. It's
simply the way it is, and it is necessary to come to terms with these
people. And we are prepared to contribute to this process. However,
after those warnings were ignored and hostilities began... Yes, Russia
has recognised the independence of these republics. We must face up to
reality.

Can anything be done in these conditions? I will tell you frankly,
this is very difficult. Nevertheless, at the first stage, relations,
direct contacts should be established. There should be some political
dialogue. It is wrong to reject everything out of hand. If this is
achieved, then we will do all we can to facilitate this process. As to
what results it will have, I cannot say just now.

What else?

TAMARA GOTSIRIDZE: About a meeting.

Yes, a meeting. You know, unfortunately, we have very few contacts in
Georgia. Practically no contacts at all. However, an internal
political struggle there is ongoing, we can see that. What we were
asked to do - namely, open the Russian market to Georgian goods - we
did all that, and we did it in return for Georgia's decision not to
impede Russia's accession to the World Trade Organisation, despite our
political disagreements. It was a very positive gesture on the part of
the Georgian leadership, and we responded to that gesture by opening
up our market.

We are prepared to move further in this direction. If the Georgian
leadership deems it possible, we will be glad to see any
representative of the Georgian administration in Moscow, whether the
President or the Prime Minister.

DMITRY PESKOV: Maybe our colleagues from Chechnya, because the issue
of Chechnya has been touched upon. Go ahead, please.

ALVI KARIMOV: Good afternoon, Mr Putin. I'm Alvi Karimov, press
secretary to the head of the Chechen Republic, a TV anchor and host of
the Dialogues programme, in which you took part and for which I'm very
grateful to you.

The sanctions and the hostility of certain countries towards Russia
are one thing, but it is frustrating that Slavic nations that we
always considered friendly have joined in.

In this context I'd like to ask you: Do you think Slavic nations -
Serbia, Poland, the Czech Republic, Bulgaria, Russia, etc. - could
establish some sort of friendly union, not necessarily even a formal
alliance (and I mean in the long term). Could they act in unison in
the international arena like English-speaking countries are doing now?

I have one more question. I'd like to say that Ms Sobchak is playing
fast and loose with the facts. Mr Kadyrov has never violated the
Constitution and will never tolerate such violations on the territory
of the Chechen Republic.

KSENIYA SOBCHAK: It's true that he made such a statement.

ALVI KARIMOV: I was silent when you shamelessly, brazenly lied.

KSENIYA SOBCHAK: I can back up what I said.

DMITRY PESKOV: Kseniya, nobody interfered with you asking a question.

ALVI KARIMOV: I'd like to ask the following question.  When the lives
of absolutely innocent people - traffic police, teachers and
journalists - are not respected, when your comrades-in-arms are
killed, when a traffic police officer who was simply doing his job is
killed, leaving behind four orphaned young daughters (two of them have
cerebral palsy) and a pregnant wife, and when the head of the republic
is one hundred percent sure that certain families stayed in contact
with the militants (not militants but terrorists, there aren't any
militants anymore)... When these families were asked to help bring these
people in, they wouldn't do it. They called them in the forest and
asked: "Hello, my dear son, have you been sleeping all right? Are you
cold out there?"

The head of the republic said that this is called "complicity in
terrorism" under the law. And he says that these people must be held
accountable. In your opinion, should we use the full arsenal of
resources and capabilities to prevent terrorists from threatening the
lives of hundreds and thousands of people? In this case, if the
measures had not been taken promptly, the number of victims would have
been 500, 1000 or even more. Excuse me for getting emotional.

VLADIMIR PUTIN: As for the victims and the families of the dead, I'm
confident that Ramzan will never leave his comrades-in-arms in the
lurch. If need be, we'll help them as well. This is the first point.
Second, as for complicity, all accomplices must be held accountable
but, of course, it must be done in compliance with the law. Let me
repeat, the preliminary investigation will reveal what really happened
there. But we should combat terrorism all along the line, and that
includes aiding and abetting - there can be no doubt about that. But,
I repeat, this should be done only within the limits prescribed by
law.

As for the Slavic countries, you probably know that they operate in a
tough economic environment, and are consequently subject to a lot of
pressure. Even the Russian economy is influenced by the foreign
economic landscape, and to a certain extent, by sanctions, let alone
those small countries.

They are highly dependent and face many challenges in ensuring their
sovereignty. However, I strongly believe that deep down, there is an
aspiration among Slavic nations to preserve cultural and spiritual, if
not political, unity. This aspiration is still there and will always
be there, it can't be uprooted.

NATALIA SELDEMIROVA, AUTORADIO: Good afternoon. Since the name of our
radio station has to do with automobiles, this is what I'll ask about.

First, I wanted to ask, when the response sanctions were introduced,
there were rumours about a possible ban on car imports. This has now
actually happened by itself: they haven't been banned, but cars are
not being imported due to exchange rate fluctuations. Is there a
theoretical possibility for such a ban to be actually introduced?

Second, it is not a coincidence that I brought this character with me
(holding a toy crocodile). You may not be aware that ordinary people
call tow truck services 'crocodiles'. The one I have here with me is
quite nice, but in real life this is a very dangerous predator. For
them, everything is potential food.

People are simply unable to handle these huge fines, which are often
groundless. When a person parks near his or her house, the car can be
towed away during the night. This is what happens in Moscow these
days.

A 3,000-ruble fine would be enough, but no, the car is towed away
anyway, so the driver has to pay even more. The unlucky driver spends
the next day running around the city. This is a multimillion-ruble
business, everyone knows it. Do you think that such extortion is fair,
especially in this challenging economic environment?

VLADIMIR PUTIN: As for car imports, it is true that when we came face
to face with this outrageous sanctions regime, the Government started
thinking about how to retaliate. One of the options was to ban imports
of new, as well as used cars. Why? Because all global brands have
already established manufacturing facilities in Russia, so a ban on
imports of ready-made machinery would have undoubtedly supported their
local operations, and, second, it would have been quite a severe blow
for countries that introduced sanctions.

But you are absolutely right, with the current exchange rate, this
makes no economic sense whatsoever, because the exchange rate has
already put things into perspective. We will stick to our decisions
and support manufacturers, including foreign companies that come to
Russia and agree to our condition that at least 50 percent of
components have to be made locally.

As for towing cars - it's probably too much of a good thing, but you
understand that pedestrians have rights as well as car owners, and
many of them are not happy that some streets - especially in downtown
Moscow - are so packed with cars that you can't even walk down them,
let alone drive. So the city authorities, I mean in Moscow, just like
in any other capital of the world, had to act to improve the
situation.

But I repeat, there can be too much of a good thing, and it should be
done within certain rules. The rules have to be publicly adopted, or
at least undergo public consultations before they are adopted, and if
needed, considered and approved by various public associations such as
the Moscow branch of the Russian Popular Front, the Civic Chamber, and
parliament members.

But once the rules are worked out, they should be observed by
everyone, including car owners and municipal authorities. But these
fines certainly should not be off the scale - they should correspond
to the average income levels. I don't know how big they are, but I
hope that they will be based on common sense.

I can see the title, Kaliningradka. Let's hear from Kaliningrad, it's
a very important region in Russia.

YELENA NESMACHNAYA, KALININGRADKA NEWSPAPER, KALININGRAD REGION: Hello
Mr President. Thank you for the chance to ask you a question.

Everyone knows that we are separated from the rest of Russia. It's
what we call ourselves - here's "us" and there's "big Russia."
Unfortunately, that's the way it is. We are surrounded by friends. At
least we consider them friends and often go to visit, but we often
hear news from that side that they are augmenting NATO forces,
reinforcing their defences near us and writing that we plan to attack
them. But I have a different question.

VLADIMIR PUTIN: So you're not planning an attack?

YELENA NESMACHNAYA: No, we are not. And I wanted to ask you this.

VLADIMIR PUTIN: Take it easy.

YELENA NESMACHNAYA: I have a different question for you. Will Russia
augment its forces in Kaliningrad Region? And one more question, if
you don't mind: what about the construction of the Baltiyskaya nuclear
power plant? People are worried about this too.

VLADIMIR PUTIN: The Baltiyskaya project is under construction, as far
as I know, work is on schedule, according to Sergei Kiriyenko's
reports. Our company Rosatom is very effective. All technologies used
in Russian projects and exported are at the so-called post-Fukushima
level, which means a higher safety level. I do not think any of our
rivals have this kind of safety technology. This is my first point.

Second, about your relations with your neighbours - I know that
interregional relations are indeed good and friendly, without
exaggeration. I have heard reports from municipal leaders and
Kaliningrad Region officials who said they were interested in further
developing such friendly cross-border relations. Many people from
Poland and Germany travel to Kaliningrad, and Kaliningrad Region
residents often go to neighbouring regions.

I think we should put fears aside and continue to develop collaboration.

I can see a poster over there saying "Veterans." We should always give
people who want to speak about this the opportunity to. Please, go
ahead.

ALEXEI IVANOV, NOVAYA ZHIZN: Good afternoon, Mr President. Alexei
Ivanov from the city of Kirillov in Vologda Region.

Mr Putin, next year we will be celebrating the 70th anniversary of
Victory in the Great Patriotic War. War veterans are very grateful to
you for their improved living conditions.

But there is a category of people who worked behind the frontlines
during the war. These home front workers made a huge contribution to
the common cause, to our victory in the Great Patriotic War. Are you
and the Government planning to improve living conditions for this
category?

Thank you.

VLADIMIR PUTIN: We always assume that both home front workers and
veterans deserve special attention from the state. I am keenly aware
of the issue you've raised. But let me repeat that when we made the
decision - I personally made it - to more rapidly provide better
housing to Great Patriotic War veterans, we thought there would be
tens of thousands of cases. But when we started doing it, there turned
out to be hundreds of thousands of people. And the figure was
constantly growing. It was completely unexpected both in terms of the
social and budget impact.

Therefore, we must first complete what was planned for the veterans.
We must, of course, think about the home front workers who, with their
selfless labour, made victory in the Great Patriotic War possible.

I am being very careful about what I say here because we must
calculate every step before making public statements in front of the
whole country, especially in the current conditions.

I can see a red sign over there. That humble young woman is probably
sitting there without any hope of being noticed, please.

LIANA NALBANDYAN, SOBESEDNIK: Good afternoon. Thank you for noticing me.

This year you've enjoyed extremely high ratings and popularity among
the public. In a recent poll, Russians voted you man of the year in
politics. The runners-up only got 2 to 4 percent, so there was a huge
gap. Does this total pre-eminence and, therefore, loneliness in
politics bother you? Thank you.

VLADIMIR PUTIN: I'm never bored. There's no need to worry about that.
You know, I have spoken about this a lot. And this is not something
permanent, so you need to have a serious attitude. What does having a
serious attitude mean to me? It means doing your work, working hard
and never thinking about how to maintain your ratings. As soon as you
start thinking about ratings they will immediately start to fall
because you start going through the motions instead of actually
working.

So far, this way of working has never failed me. I hope to stick to it
in the future and that it will continue to have positive results, not
so that they will be recorded on paper, but for the benefit of the
nation and people. This is the aim.

Now, young lady with the shawl, please.

YEKATERINA VINOKUROVA, ZNAK.COM: Thank you, otherwise my boss would
have killed me.

VLADIMIR PUTIN: Wow. Is that the kind of free media that we have?

QUESTION: Mr President, I would like to pick up on a topic that my
colleagues started, the fifth column and enemies of Russia. I would
like to ask you whether you consider certain categories of people to
be Russia's enemies, namely heads of state corporations who first ask
to borrow trillions from the budget, then purchase iPhones for
millions, who dump bonds on the country's market but never fail to pay
themselves bonuses in the millions. The officials, even some in your
inner circle, who live in palaces considering that our elderly women
are counting kopecks to buy bread. The heads of state-controlled TV
channels who show videos about crucified children, who hurt our image
in the West and your personal image, hinder negotiations, and sow
discord. The politicians who during these months of extreme tension
for us all - and I believe, for you as well - openly called for Russia
to launch a war of aggression, which would be a crime. The law
enforcement officials who are uninterested in any of this but who
organised a group of investigators to look into an alleged painting
theft by Alexei Navalny's supporter, even though the artist claims
there was no theft, which, again, only harms our image in the West.
And the last one: Mr President, what is Igor Sechin's annual salary?

Thank you very much.

VLADIMIR PUTIN: Well, I don't know Mr Sechin's salary. Frankly, I
don't even know my own salary - they just give it to me, and I put it
away in my account. As for Mr Sechin - honestly, I cannot say. I know
that people who work in our large companies make good money. But we
have to compare what they make to the salaries earned by their
colleagues in similar large companies all over the world, not to the
average salary in our country (although this should be kept in mind as
well).

Because Mr Sechin works there now, but tomorrow we may bring in a
foreign specialist. But to bring in a foreign specialist... I don't want
to make it sound like we are going to dismiss Mr Sechin. He will
continue working, and he has been pretty diligent and effective, he
has proved to be an effective manager. But I am not speaking about him
now. I am saying that we can bring in foreign specialists at certain
companies but we cannot pay them a salary different from what we pay
our specialists. This has to be correlated with the sector and
globally. I'm sorry but such populism is inappropriate.

But, of course, aspects of social justice should be observed. As for
example - it can be seen in so-called golden parachutes, that's for
sure. And I agree with the State Duma deputies and the Government that
such golden parachutes must be eliminated. Other countries are doing
this as well, and it should continue.

Now with regard to officials from my inner circle. There are no
officials in my inner circle, and I hope there will never be any. They
are all colleagues, but I do not build close relationships with
anybody nor do I intend to. There is a certain state function that is
almost impossible to perform effectively with a close personal
relationship. I realised this, I understood it long ago, and so I seek
to maintain a certain distance with everyone, but also be sympathetic
and work with the full understanding of the responsibility involved.
Of course, these officials could be constantly harassed, but don't
forget that their effective performance is crucial for the fate of
millions of our citizens, for their social and economic wellbeing.

Are there any indications of some people going overboard, so to speak,
in what they do? Maybe there are. This happens always and everywhere.
It is essential to look into this. If the media pay attention to it,
this is the best method of fighting all sorts of excesses, including
with regard to the opposition. You have mentioned some of these
people. Everyone is entitled to have an opinion. Everyone has a right
to state his position, but I repeat, within the bounds of the law,
without rocking the country and monopolising the right to tell the
ultimate truth.

Iran? Okay, on Iran.

RAJAB SAFAROV, DELOVOI IRAN: Mr Putin, exactly a year ago, here in
this hall, you said that Iran is our neighbor, our top priority
partner. I'm quoting you...

VLADIMIR PUTIN: Thank you for your faith.

RAJAB SAFAROV: You said that "we intend to develop relations with this
country in all areas, and this is our fundamental choice."

However, a year has passed, and in reality trade turnover has
declined, and there have not been any particular contacts that would
lead to specific, wide-ranging agreements. Iran is not being invited
to join the SCO. Iran is not a member of the Eurasian community. Iran
is not party to major energy projects. The oil contract that was
signed at the start of the year has not been implemented.

Furthermore, I act on the assumption that trade turnover this year is
less than 0.5 percent of Russia's trade with other countries.

Paradoxically, no one in Russia is responsible for this situation. Not
one official, not one statesman is responsible for the declining trade
turnover with Iran. Maybe you should consider appointing presidential
or governmental authorised representatives for countries that are of
key importance, for trade turnover and the development of trade and
economic relations.

And one final point. A great deal depends on the performance of
ambassadors. Should their performance be looked at from a different
angle?

If an ambassador fails to ensure at least a five percent increase in
trade and economic relations within one or at most two years, maybe he
should be replaced. I believe that much depends on our relations with
Iran. You promised to visit Iran last year, but you haven't. You
promised to sign a large economic agreement with Iran, but this hasn't
come about either. Has something changed in your strategy, or is your
team not implementing your instructions? Thank you.

VLADIMIR PUTIN: First, ambassadors. Of course, it is one of the
ambassador's duties to work to promote interstate relations, but
increasing trade is not on his agenda. If we act upon your
recommendations, we'd soon run out of ambassadors.

As for the efficiency of diplomatic missions, it should be determined
by the foreign minister or, ultimately, myself, based on Foreign
Ministry reports. We will certainly have a look at the efficiency of
our embassy [in Iran], including thanks to your prompting, but on the
whole we are satisfied with its operation.

As for trade, it has indeed slumped. We discussed this issue with the
Iranian President and have taken action to improve its structure and
volume.

But it doesn't depend on us alone, but also on the global economic
situation. These are purely objective processes, because Iran is a
gas-producing country and its economy is largely connected with the
global oil and gas sector.

We see that energy prices, the price of oil, are falling. People
wonder why this is happening. Is this some collusion between Saudi
Arabia and the United States to punish Iran, or to influence the
Russian economy, Venezuela, etc.?

Maybe, but then maybe not. Maybe it is a battle between the producers
of traditional energy resources and shale oil. And the price of oil,
which is rapidly approaching its prime cost, may fall some more,
everything will collapse, and then the oil price will start climbing
again. But we cannot be sure.

Can US interests coincide with the interests of the main energy
producers? Yes, certainly, because the US administration is not
worried about private companies' investment in shale oil. The priority
for them is the overall level of prices.

But if prices are kept down, companies will stop investing in
hard-to-recover reserves and new deposits. And eventually prices may
grow so high against the backdrop of global economic growth that it
will be bad even for industrialised countries. Many people understand
this.

By the way, our Chinese friends understand this very well. They are
not interested in very low oil prices that will last for a long time.
But Iran depends on this and nothing can be done about it. We are
looking for ways of diversifying our cooperation with Iran, we'll
continue doing this, and we are doing it sincerely.

We achieve success in some areas and fail in others. We are working on
machine building, aircraft construction and are looking for other ways
of diversifying the oil-and-gas sector. As for the contract you've
mentioned, you are not right in saying that nobody here is in charge
of it. Our energy minister has been to Iran more than once and has
invited our partners here.

This was a very complicated search for a compromise, a mutually
acceptable solution, and eventually we found it. There were many
difficult calculations, truly a host of problems, but we resolved them
on the whole. Both sides should display their will, and these
contracts, including those on oil, should be beneficial for...

After all, the Government won't be selling Iranian oil. This will be
done by the relevant companies, but the contracts must be beneficial
for them. This is not easy, but we are sincerely interested in this
and we will do this - we'll look for ways of enhancing our trade.

Of course, we'll work with our Iranian partners and friends on a
settlement of the Iranian nuclear programme. I think we are about to
resolve this issue. In my opinion the Iranian leaders are very
flexible.

In general, I do not even understand why the final agreements on the
Iranian nuclear programme have not yet been signed. I hope this will
be done in the near future and if this happens we'll see considerable
changes in our economic relations.

A trip to Tehran is quite possible for me. We'll discuss this via
diplomatic channels and choose a convenient time for our partners and
for me. I've been to Tehran...

A trip is not an end in itself. When I go to Tehran, what will we do
there? Meet the President. But I've just met him, and more than once,
and we'll continue staying in contact.

If we see that a special trip is necessary, we'll have no
restrictions. We don't have any restrictions linked with any outside
pressure. We promised to build a nuclear power station and we've done
it.

We've just signed the contracts on our further cooperation and we'll
do this. So, this is a strictly technical issue. We'll work on it.

There is a woman there, the word "Mom" is written on her poster. Go
ahead, please.

OLGA PANINA, OTKRYTAYA ROSSIYA: Thank you very much, Mr Putin. I chair
the national public movement Union of Russia's Mothers and I'm a
mother of many children.

Here is my question. The media reported recently that a draft law on
reviving the title of Mother Heroine in Russia has been submitted to
the State Duma. This title implies certain preferences in pension
support and lump sum payments.

Here is my question. Would you support the initiative to restore this
honorary title? If so, could you ensure that a draft law to this
effect is adopted in the near future, or could you spearhead this
proposal?

Thank you.

VLADIMIR PUTIN: You know my take on all demographic issues: supporting
families, large families, women who want to have children (no matter
whether its a second, subsequent or the first child)... This is a very
important issue which has both financial and moral dimensions. So I'm
ready to support anything related to supporting families, mothers and
children.

When the maternity capital benefit was introduced, you may recall that
I said back then that this benefit was expected to provide financial
and moral assistance to women. And I'm confident that Russian men
understand it. What I see is that this decision has been praised by
both men and women. Men have to assume a lot of responsibility, but we
love our women. For this reason, men support such measures, and will
continue doing so in the future. Let me reiterate that we will seek to
find additional opportunities and come up with new solutions for
ensuring that women feel our moral support.

Let me check at what stage this draft law is. I don't see any problems
whatsoever that could prevent this initiative from moving forward.

You know, we have already been working for three hours, so we should
probably finish this conference shortly. I'll take three more
questions...

On TV, please.

NADEZHDA PESHEKHONOVA, 2-TV COMPANY: We represent  the Volgograd-1 TV
station in the city of Volgograd.

There was much talk about the need to create independent public
television, but at the same time a law that bans advertising on pay
channels comes into effect on January 1,  2015. Do you think that this
law runs counter to the efforts to promote open, independent
broadcasters, since the available stations are funded from various
budgets and can't be regarded as independent?

I have a personal question: we are a cable TV channel. We are not a
pay channel, but we do have to pay cable companies for accessing their
networks. Even our lawyers are unable to say whether this law will
affect channels such as ours.

Thank you very much.

VLADIMIR PUTIN: You know, I may not be able to provide you with a
complete insight into this issue. What I can say is that this
situation is underpinned by purely economic factors. In the current
economic environment the advertising market tends to shrink. So we
have a decision to make whether to support federal networks directly
from the federal budget (which is quite a complex issue, since we have
a lot of other commitments, including paying out pensions, benefits,
etc., the army - you name it, everything that is directly linked to
the budget), or to enable them to benefit from the shrinking
advertising market.

This was not our decision or proposal, and was not initiated by
government authorities. These decisions were taken by representatives
of the media - more specifically, the management of these channels.
For better or worse, the reasoning here is that if cable TV channels
exist, they can't be shut down, but they have to learn how to make
money themselves, that is, to transition to a fee system. And it's up
to viewers to decide if they are willing to pay for it or not.

SAFIYE ABLAYEVA: Good afternoon. I represent the first Crimean Tatar
television channel, ATR, Simferopol, Crimea.

This past spring, you signed an executive order on the rehabilitation
of the peoples deported from Crimea - however, local authorities are
not making any real effort to implement this order. Why do you think
the order is standing idle? Thank you.

VLADIMIR PUTIN: I don't think it's standing idle, that's why. First,
it cannot be rescinded either by local authorities or anyone else. We
have announced the political rehabilitation of all peoples who were
repressed - Crimean Tatars, Germans, Greeks, Armenians, Bulgarians -
all those who were repressed. In my opinion, this has serious
political and moral significance.

But there is more to it. We also announced - and this was adopted at
the federal level, since you mentioned the order - that all major
languages spoken at the peninsula - Russian, Ukrainian and Crimean
Tatar - are now official, which is unprecedented in the history of the
Crimean Tatar people. This is also a serious thing that concerns the
feelings of the Crimean Tatar people and their seeing themselves as
full citizens of the Russian Federation. And, of course, this all must
be steadily implemented at the regional level.

But there is even more to it. The most important thing, of course, is
the issue of land legalisation. I am aware that this is complicated
and that Crimean Tatar people aren't the only ones living in Crimea. I
know that far from everyone agrees with this decision and say that if
they constantly legalise land taken by squatters, order will never be
established.

But I believe - and I ask those living in Crimea to hear and
understand me - repressed peoples are a separate matter, and the state
owes much to them. This chapter should be closed, and after that we
can say that everyone is equal and the law has to be followed.

Regardless of an individual's nationality or ethnicity, everyone has
to follow the law. And, of course, local authorities must find
solutions that are acceptable to everyone and that would allow them to
implement the law to the letter. I know this is under discussion in
the Crimean parliament, and if there is not any final decision yet,
there should be. That's the second thing.

We are working on a programme that will provide economic and social
support to Crimean Tatars and other repressed peoples: building roads,
kindergartens and other public services.

Unfortunately, this cannot be arranged overnight, but it doesn't mean
the issue has been forgotten. Why can't it be done overnight?
Certainly not because of lack of money (although financing is always a
problem, even in the most abundant years there's never enough for
everything), but because it requires more detailed planning. We have
to decide where to build what, how many, and so on. But we will do it
eventually.

The final question - how about one on the economy. We started with the
economy, and we'll finish with it as well.

ALEXANDER KOLANDER, DOW JONES: Mr Putin, you said the ruble is falling
and economic problems are emerging because of the declining price of
oil. But the ruble began weakening in 2013, investment flows began
shrinking even before that, and members of the Government responsible
for economic matters spoke about economic problems even before the
ruble began falling. The situation is similar to having a cold - a
healthy person can go on ignoring the symptoms, while a sick person
suffers much more from the same cold.

Don't you think that the economic problems are the result of the
personnel decisions as well as domestic and foreign policy moves of
the last two or three years? Do you think you are personally
responsible for these moves, for the weakened ruble and economic
problems?

And the last question - have you made a decision about running for
another term, and will this decision depend on the ruble rate and the
economic situation?

VLADIMIR PUTIN: It depends on the overall result of our performance -
the president, the Government and the Central Bank. I would say it is
too early for anyone to make any decisions about running in 2018
presidential elections. We must work our hardest for the sake of and
in the interests of the Russian people, and then look at the results
of this work and at the public sentiment to decide who should run in
2018. That's first.

Second, the head of state always bears responsibility for everything
that happens in the country, as do officials throughout the government
hierarchy. I have never tried to evade responsibility and I am not
going to start now.

Finally, as for mistakes with personnel and so on - everyone makes
mistakes. In general, I would repeat that personal accountability
should be increased - all Central Bank and Government officials should
be responsible for the work entrusted to them. At the same time, I
believe that most administrative bodies, including the Government and
the financial authorities, are coping with the issues facing Russia
today.

I said this at the start, and I would like to repeat this in
conclusion: we are indeed going through a difficult period. The
difficulties are caused by a range of objective and perhaps subjective
circumstances - meaning that certain steps could have been taken
faster and more resolutely.

Overall, I think that the Central Bank and the Government are pursuing
the right policies. This gives us grounds to believe that we can
achieve the social targets set out in the 2012 executive orders and
overcome the current problems in the medium term, if not in the near
future, by maintaining macroeconomic stability and a healthy economy
and by using available reserves.

I have already said why it will happen - because the economy will
eventually adjust to low energy prices and will start to diversify.

And second, even if energy prices remain low or continue to decline,
there will come a time when energy prices will resume growing again
when the global economy and the demand for energy grow.

I'm absolutely confident that this will happen. But how will it
happen? We will see how the authorities - the financial and managerial
sectors and the Government - perform and evaluate them accordingly.

We can be absolutely sure that the worst will pass, and that we will
overcome this very difficult situation, emerging from it stronger
domestically, in the global economy and on the international stage. We
have the necessary resources to meet our social commitments, to
strengthen our defences, and to modernise the army and the navy, and
we will definitely use them to implement our plans.

But our biggest priority is to guarantee people's wellbeing, to adjust
pensions to inflation despite declining budget revenues. Can we do
this? We certainly can. Next year, we will adjust pensions to actual,
not estimated inflation.

We will focus our attention on the social wellbeing of our people in
the upcoming period. And I'm confident that we will achieve all
targets.

Thank you very much. Happy New Year!


December 18, 2014, 15:20Moscow

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Peace Is Doable

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