Amid increasing speculation the rouble's collapse could shake Vladimir Putin's grip on power, the man himself addresses his critics at his annual news conference - and admits it could take two years for Russia to emerge from its present crisis. Ciara Lee reports.
Under pressure to come up with a plan, Russian President Vladimir Putin gave his end-of-year press conference. But rather than outline moves to combat the country's deepening financial crisis, the leader first wanted someone to blame. (SOUNDBITE) (Russian) RUSSIAN PRESIDENT VLADIMIR PUTIN, SAYING: "Of course, the current situation is caused by external factors first of all, but we also understand that we have not done many of those things we planned to do and we said we would do to diversify our economy over the past 20 years." The Russian economy is heading into recession in what some have called a "perfect storm" of low oil prices and Western sanctions in the Ukraine crisis. The rouble has fallen about 45 percent against the dollar this year - and the fallout could be felt far and wide. Robert Haalver is from Baader Bank. (SOUNDBITE) (German) CAPITAL MARKET ANALYST FROM BAADER BANK, ROBERT HALVER, SAYING: "Russia is being hit hard and fast. If this carries on, Russia is going to go bankrupt and nobody in the West should gloat about this. Germany particularly will see its small and medium sized businesses suffer." Closer to home, some Russians have been hitting the shops. Prices are expected to surge because of the weak currency. Putin's grip on power so far remains resilient, with his supporters a plenty. But Charles Robertson from Renaissance Capital says the heat is on for Putin. (SOUNDBITE) (English) CHARLES ROBERTSON, GLOBAL CHIEF ECONOMIST AND HEAD OF MACRO-STRATEGY AT RENAISSANCE CAPITAL, SAYING: "It's a big step back for Russia. Russians have been through so many crises. They saw their savings wiped out in the early nineties. We had the 1998 crash with the default. 2008 another huge shock to the system. And yet for the last ten years Russians have been building up savings and Russia's just begun to build up enough cash that maybe it could fun its own growth. That's just been hit another blow in the last few months." Asked about the conflict in Ukraine, Putin said Moscow wants to restore political unity, but denied any link between the crisis and Russia's economic problems. (SOUNDBITE) (Russian) RUSSIAN PRESIDENT VLADIMIR PUTIN, SAYING: "We are ready to mediate here - to reach direct political dialogue and through these means and political methods to settle the situation." But the EU is not convinced. It says it's to keep sanctions in place as long as Moscow does not respect Ukrainian sovereignty.