You're reading: Putin says Russia ready to handle euro debt crisis fallout

MOSCOW - Russian Prime Minister Vladimir Putin, preparing for a return to the Kremlin, urged Europe on Thursday to deal resolutely with its sovereign debt crisis and said Moscow was better prepared to cope than it was before the global crash of 2008.

In his first speech to investors since announcing last month that he would return to Russia’s presidency, Putin also said he would stick to a responsible fiscal course and seek foreign investment to drive Russia’s "new industrialisation."

Opening his speech, Putin said the greatest cause for concern was the euro-zone debt crisis, which should be overcome with "clear, well thought-out steps".

Putin also said there would be no upheaval in Russia after the March 2012 presidential election which he is almost certain to win.

"Changes are undoubtedly needed and they will happen. But it will be an evolutionary path. We do not need great upheaval — we need a great Russia," Putin said.

Putin, who turns 59 on Friday, said Russia was in a better position to cope with the fallout of the slowdown in global growth and sovereign debt problems faced by the developed economies of the West.

"I will say straight away that Russia is better prepared than it was in 2008 for different scenarios," Putin said. "We have built up serious experience, a reserve of durability — in the economy and in the financial sector."

Putin sought to reassure investors concerned by the resignation of Finance Minister Alexei Kudrin, a fiscal hawk who had expressed concern that the public finances were becoming overly dependent on high oil prices.

Kudrin’s departure came at a time of sharp falls in Russian stocks, bonds and the rouble. Putin said Russia had sufficient funds to keep the exchange rate of the rouble under control.

"We have half a trillion dollars in reserves," Putin said. "Their volume is sufficient to control the situation in the foreign currency market."

He said the government was aware that some Russian companies were near margin calls on their debt and pledged help. "We are ready to provide support," Putin said. "But only to the effective ones."

BALANCED BUDGET

Putin said that maintaining fiscal discipline and low public debt would remain government priorities, and promised a balanced budget by 2015. He also urged his audience to invest in Russia.

He said the budget could yet post a surplus next year if oil prices turned out to be higher than the "conservative" estimates in the government’s fiscal plans.

"Our strategic goal is diversification of the economy. And to change its structure we need to open the way for thousands of new projects and business ideas," Putin told investors at the conference, organised by state-controlled bank VTB .

"For that we need investment, both direct and portfolio. This should become the main resource for the new industrialisation of Russia," Putin said.

Russia should, in the next few years, raise the share of capital investment in the economy to 25 percent of GDP, Putin said. Investment is now around 20 percent of GDP, less than half the level in faster-growing China.