Wednesday, October 01, 2008

Putin Lashes US for Economic Failures

The Russian Prime Minister Vladimir Putin lashed out at the United States today for what he said was its inability to deal with the financial crisis affecting the global economy.

In remarks unlikely to go down well in Washington, Mr Putin was especially critical of Congress's rejection of a $700 billion bank bailout – a rejection that hit Russian financial markets particularly hard.

“Everything that is happening in the economic and financial sphere has started in the United States. This is a real crisis that all of us are facing," the former president told a government meeting in Moscow.

“And what is really sad is that we see an inability to take appropriate decisions. This is no longer irresponsibility on the part of some individuals, but irresponsibility of the whole system, which as you know had pretensions to (global) leadership."

Highly leveraged Russian companies have been hit hard by the credit crunch, which has made it virtually impossible to secure borrowing abroad.

The main Russian stock indices are more than 50 per cent down from their May peaks, far outstripping losses on more mature Western markets, and trading has been repeatedly suspended over the past two weeks.

Analysts say foreign investor confidence has been hit by Russia's actions during the recent conflict in Georgia, as well as the Government's attitude towards Western energy companies trying to operate in Russia and other former Soviet states.

Mr Putin said today that Russia would allocate 175 billion roubles (£3.85 billion) of budget funds in 2009 to support the domestic financial market.

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