Putin defends Russia crisis measures, stresses aid

MOSCOW (Reuters) - Prime Minister Vladimir Putin defended his handling of Russia's economic crisis on Monday, telling lawmakers a 3 trillion-rouble (61 billion pounds) aid package would ensure the country survived a "very difficult 2009."

"What should -- and must -- be said with all certainty is that Russia will overcome the crisis," a confident Putin said in a 65-minute report to the State Duma (lower house), his first as prime minister.

"The country will beyond all doubt keep its position as one of the largest economies of the world."

Russia's $1.7 trillion (1.15 trillion pounds) economy is heading into recession after a decade of rapid growth. Lower prices for oil, gas and metals exports and big corporate debts mean it is the worst affected so far of the world's big four emerging markets.

Putin, who left the Kremlin after eight years in 2008 to become prime minister, used the Duma appearance to show his command of policy and stress measures the government was taking to protect vulnerable citizens.

Addressing a chamber dominated by deputies from his ruling United Russia party, Putin reeled off dozens of statistics to back his argument that the worst of the crisis was over.

"It was a speech for popular consumption, an effort by Putin to show the government has control over the crisis," said Chris Weafer, chief strategist with Moscow-based investment bank UralSib. "The message was that while we're going to have a tough year, it's not going to be disastrous."

The only strong criticism came from the leader of the main opposition Communists, Gennady Zyuganov, who said Putin's speech contained nothing new.

"The poor will become poorer," Zyuganov said.

Putin concentrated most of his speech on listing what he said were the government's successes in improving public housing, health and education.

More than a million people have lost their jobs since the start of December and the rouble has lost around a third of its value against the dollar, provoking fears that the country's hard-won political stability might be at risk.

Putin said the current rouble rate would help local companies and predicted inflation would soon fall from the current level of 14 percent a year. But he rejected calls to raise personal income tax and also delayed a rise in payroll tax, saying the tax burden should be kept low in the crisis.

He also pleased investors by rejecting calls to freeze the tariffs charged by electricity, gas and rail utilities.

Russia's companies should take responsibility for cutting their own debts, rather than relying on the government, he said. Some $174 billion of corporate debt has been repaid or restructured over the past few months, he said.

Putin avoided mentioning foreign policy, which Russia's constitution reserves for the president, and did not refer to last week's Group of 20 summit in London, saying only that the financial crisis had started outside his country.

Among the government's achievements were building record amounts of public housing, raising the birthrate, providing accommodation for the armed forces, equipping schools with computers and boosting Internet access, the premier said.

Putin, who as Kremlin chief presided over the longest boom Russians have seen in a generation, must report to parliament under constitutional changes ordered by his hand-picked successor, President Dmitry Medvedev.

"This whole event was PR for Putin to show he is a leader, a competent boss who knows what to do in the crisis," said Olga Kryshtanovskaya, a sociologist and expert on the Kremlin elite.

Medvedev has criticised the government for its slow response to the crisis, though he has never directly criticised the man who groomed him to be president and who is still by far Russia's most popular politician. Polls show most Russians believe Putin, rather than Medvedev runs the country.