Putin insists Russia will overcome ‘problems and difficulties’ caused by sanctions

Business

Vladimir Putin has admitted to “problems and difficulties” caused by sanctions after Russia’s invasion of Ukraine but suggested they would be self-defeating for the West.

The tightening squeeze on the Russian economy has prompted the rouble to plunge to record lows and ratings agencies to predict that Moscow will default on its debts.

But Mr Putin said the sanctions would result in tougher times for consumers in the nations imposing them and that Russia would solve its problems and emerge stronger.

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His defiant remarks came as more multinational companies from Goldman Sachs to Burger King sought to cut ties to the country in the face of global outrage over the invasion.

Earlier, Kremlin spokesman Dmitry Peskov admitted that Russia was “experiencing a shock impact” thanks to an unprecedented “economic war”.

Russian finance minister Anton Siluanov said: “Western countries are trying to create a shortage of everyday imported goods in our country, forcing the closure of successfully operating foreign-owned businesses.”

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Measures announced by western countries include a freeze on the Russian central bank’s reserves and the cutting off of major Russian lenders from the SWIFT global messaging system that enables payments, as well as personal sanctions against a string of oligarchs.

New data on Thursday showed that, with multinationals pulling out and container shipping giants such as Maersk and MSC suspending cargo shipments to and from the country, trade had slumped.

The figures, from supply chain tracking platform FourKites, showed import volumes for the week to 8 March were 40% lower than in the week before the invasion.

Kremlin. File pic
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A Kremlin spokesman admitted Russia was experiencing an economic shock

Mr Putin acknowledged that the impact of sanctions was being felt.

“There are some questions, problems and difficulties but in the past we have overcome them and we will overcome them now,” the Russian president said during a televised government meeting.

“In the end, this will all lead to an increase in our independence, self-sufficiency and our sovereignty.

“It is clear that at such moments people’s demands for certain groups of goods always increases, but we have no doubt that we will solve all these problems while working in a calm fashion.”

Mr Putin said that countries taking “unfriendly steps” towards Russia were “calling on their citizens to pull in their belts, dress warmer, and point to the sanctions that they are imposing against us as the reason for their worsening situation”.

The remarks came as new figures showed US inflation at a fresh four-decade high, a situation that looks likely to worsen as a consequence of the war and sanctions, including America’s plan to cut off Russian oil imports.

The Russian leader also noted that his country was a major producer of agricultural fertilisers and said there would be inevitable “negative consequences” for world food markets in response to western action.

Mr Putin said that Russia, a major energy supplier that provides a third of Europe’s gas, would continue to meet its contractual obligations.

However the Kremlin said earlier that it had banned exports of a list of items such as telecom, medical, automotive, agricultural, electrical and tech equipment until the end of this year.

Women walk outside a Burger King restaurant in Moscow, Russia, September 15, 2015
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Burger King said it was cutting off corporate support for its 800 restaurants in Russia

In addition to action by governments, western companies have been continuing to cut ties.

Major corporations from BP and Shell to Coca-Cola, PepsiCo and McDonalds have already announced that they are shutting up shop or planning to sell assets in the country.

On Thursday, Burger King said it was cutting off corporate support for its 800 restaurants in Russia.

Wall Street bank Goldman Sachs said it was closing its operation in Russia entirely.

Fast Retailing, owner of fashion chain Uniqlo, said it was temporarily closing its 49 stores, following a backlash over comments by its boss saying Russians had as much right as others to buy clothes.

Meanwhile, UK-listed Rio Tinto became the first major mining company to say it was cutting all ties with Russian businesses.

Japan’s Sony and Nintendo suspended deliveries of their gaming consoles.

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