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russia blames us for global financial crisis

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    Medvedev blames US for global financial crisis
    Sebastian Alison and Maria Levitov
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    Bloomberg

    MOSCOW — Russian President Dmitry Medvedev said yesterday it was “time to act” to create a new global economic system and blamed the US for the worst financial crisis since the 1930s.

    He also declared he would expand Russia’s military presence in Europe, “to counter or neutralise the US’s missile shield in Czech Republic and Poland”, extend his term in office and beef up the Kremlin’s authority.

    Radical reforms were needed, Medvedev told Russian legislators yesterday in a speech broadcast live on state TV.

    The US, the European Union and the BRIC countries — Brazil, Russia, India and China — should work together to create an economic system that would be “more fair and more secure”, Medvedev said in his first state of the nation address since succeeding Vladimir Putin as president. “We must radically reform the political and economic systems. Russia, at all events, will insist on this.”

    Medvedev’s calls for a new global order come after the worst month for Russian investors in a decade. The 50-stock RTS index dropped 36% last month, the biggest monthly decline since the government devalued the rouble and defaulted on domestic debt in 1998. Foreign investors have withdrawn about $140bn from Russia in the past three months, according to BNP Paribas.

    Medvedev, a former corporate lawyer and close Putin ally, took over as president in May. Putin, now prime minister, served two four-year terms as president. Before Putin endorsed Medvedev to succeed him, there had been speculation the presidential term could be extended to allow the former KGB spy to stay in office.

    “While creating a bubble to ensure its own growth,” the US didn’t co-ordinate its economic policy with other countries and failed to ensure appropriate safeguards, Medvedev said.

    A “local” crisis had turned into a global one because of US actions, leading to “a fall on the markets of the whole planet”, he said.

    “We will overcome the consequences of the global financial crisis and will come out of it even stronger,” Medvedev said.

    “Much has already been done to protect our economy from external risks,” he said, citing the more than 200-billion roubles pledged in emergency funding measures, including 50-billion roubles in loans for companies to pay off debt to foreign banks. “Today, the most important thing is to realise these measures. Every rouble should be spent effectively.”

    Medvedev began his address by blaming the US for Russia’s five-day war with Georgia in August, which followed attempts by Georgian President Mikheil Saakashvili to take by force the breakaway Georgian region of South Ossetia.

    “The barbaric aggression against South Ossetia” was encouraged by the US, and Russia’s military response was used as an excuse to send warships to the Black Sea by the North Atlantic Treaty Organisation, Medvedev said. Russia would deploy Iskander missiles in its western outpost of Kaliningrad in response to plans by the US to build an anti-missile system in Europe, he said.

    Medvedev said Russia would electronically jam elements of the proposed US system and that Russia had scrapped plans to stand down three missile regiments.

    “Earlier, we had planned to decommission three missile regiments of a missile division deployed in Kozelsk and to disband this division by 2010. I have decided to refrain from these plans ,” Medvedev said.

    “Besides, to neutralise — if necessary — the antimissile system, an Iskander missile system will be deployed in the Kaliningrad region. Naturally, we also consider using for the same purpose the resources of Russia’s navy,” he said.

    “In the end, electronic jamming will be carried out from the territory of the same westernmost region, that is from Kaliningrad.”

    Parts of the US system are due to be deployed in Poland and the Czech Republic. The Kremlin said the system threatened Russia’s security. Washington said it was needed to protect from “rogue” nations, specifically Iran.

    Medvedev also proposed extending the presidential term to six years from four years yesterday, a step he said which was needed to deal with massive challenges facing the country.

    Medvedev also proposed increasing the powers of parliament over the executive and helping smaller parties win better representation in parliament.

    He said the government would have to explain its policies every year to parliament. “(I propose) an increase of the constitutional terms of the president and State Duma (lower house of parliament) to six years and five years respectively,” Medvedev said. He did not say when the changes would be implemented. But analysts said the decision would give future presidents the chance to rule for two six-year terms. With Reuters
 
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