Wednesday, January 28, 2009

Putin calls financial crisis a 'perfect storm'

DAVOS, Switzerland (AP) - Russian Prime Minister Vladimir Putin called the world financial crisis a "perfect storm" whose destructive powers were multiplied worldwide, and urged economic rivals to work together to find an exit route.

The sometimes combative Putin struck a sober tone in the keynote address at the World Economic Forum on Wednesday, where he was indirectly critical of the U.S.

"The pride is gone," said Putin, referring to Wall Street hubris. His own country has fallen hard over the past year, seeing its currency plunge and once massively rich magnates lose billions.

Putin said economists and politicians should always be ready for such a crisis, saying it was as inevitable as the Russian winter.

The crisis differs from the Great Depression of the late 1920s and the early 1930s because it "has affected everyone at this time of globalization," he said. "Regardless of their political or economic system, all nations have found themselves in the same boat."

He refrained from directly blaming the United States for the crisis - but pointed out that just a year ago at Davos, American delegates emphasized the U.S. economy's fundamental stability.

"Today, investment banks - the pride of Wall Street - have virtually ceased to exist," a fact that he said spoke louder than any public tongue-lashing.

Putin, often criticized for exerting state control over Russia's key industries, did not recommend a greater role for governments in response to the crisis - in fact, he said too much government involvement can be "dangerous."

"Excessive intervention in economic activity and blind faith in the state's omnipotence is another possible mistake," he said.

He stressed the need for better regulation of financial markets, but admitted that Russia's regulators failed to protect his country from crisis.

"We must assess the root causes of the situation, without hostility," he said, calling for "coordinated and professional efforts" among governments and industries worldwide to emerge from the crisis.

His measured comments on the economy stood in contrast to his tough tone on geopolitics. He compared Georgia's military effort to keep two breakaway provinces last year to the terrorists who attacked Mumbai, India a few months later. The Russian war with Georgia over the provinces strained Moscow's relations with Washington.

Putin also had a slight for neighboring Ukraine, insisting on the need for "fair" energy prices. A dispute over Ukrainian debt for Russian gas prompted a supply crisis that cut off much of Europe from gas during a winter cold snap earlier this month.


Quick, isn't he.


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