December 20, 2018 / 9:40 AM / in 2 months

HIGHLIGHTS-Russian President Putin's end-of-year news conference

MOSCOW, Dec 20 (Reuters) - The following are highlights from Russian President Vladimir Putin’s annual end-of-year news conference on Thursday.

ON U.S. THREAT TO QUIT INF NUCLEAR TREATY

“We are essentially witnessing the breakdown of the international arms control order and (the start of) an arms race.”

“It’s very hard to imagine how the situation will develop (if the U.S. quits the Intermediate-range Nuclear Forces Treaty). If these missiles appear in Europe what should we do? Of course, we’ll have to ensure our own security.”

ON WESTERN SANCTIONS

“Russia throughout almost all of its history has been under some sort of sanctions... This is to do with the growth of Russia’s power and its ability to compete. A new player has appeared which must be taken into consideration.”

“Our economy has adapted to these external constraints... And look, there’s also some advantages to this sanctions story. In what sense? It has forced us to switch on our brains in relation to many things.”

ON UK-RUSSIA TIES, BREXIT

“It is in the interests of both countries, both governments to get out of this deadlock.”

“In terms of Brexit, if it is carried through to the end, I can understand the prime minister’s (Theresa May’s) position... There was a referendum after all. What can she do? She must enact the will of the people, expressed during the referendum.”

ON MEETING TRUMP SOON

“I don’t know if such a meeting will happen or not.”

“Will he be able to enter direct dialogue with Russia? I don’t know, you need to ask them.”

“We must normalise our bilateral relations, we are ready for this, as soon as the other side is ready too.”

ON MARIA BUTINA AND SKRIPAL POISONING CASES

On Maria Butina, accused in the United States of being a Russian agent of influence: “I don’t understand what she is supposed to confess to. She did not carry out any orders from Russian security services. I don’t understand why she was jailed, there are no grounds for it.”

On former Russian spy Sergei Skripal, who was poisoned in Britain with his daughter Yulia: “It’s good that he wasn’t killed... Thank God, Skripal is alive.”

“It’s simply an excuse to organise yet another attack on Russia. If there were no Skripals, they would have come up with something else, that’s clear to me.”

ON RUSSIAN CAPTURE OF UKRAINIAN SAILORS

“Provocations are always bad. A provocation aims to escalate the situation. Why do our Ukrainian partners need this development? They need to escalate the situation around the elections, to raise the rating of one candidate for the post. Did the provocation achieve its aims? In terms of raising ratings, maybe.”

ON CONFLICT WITH UKRAINE IN AZOV SEA

“We have an agreement from 2003... We are ready to stick to these agreements and not announce one-sided actions.”

“When it comes to military vessels, they have to be in touch with our border guards... In the context of martial law I find it difficult to imagine, how military vessels will roam around. But overall, we would like to normalise everything (in the Azov Sea).”

ON GROWTH AND THE ECONOMY

“Inflation remains at levels that we welcome... We will go outside the Central Bank’s 4 percent reference point somewhat.”

“We can’t create GDP growth for the breakthrough we need without changing the structure of our economy. That’s what our national goals are geared towards... to giving the economic structure an innovative character.”

“From 2021, the government is planning for 3 percent growth, even more perhaps.”

ON VAT RISE, INFLATION

“I expect that this (the increase in prices) will be a one-off... Recently, they (the central bank) decided to increase the (key) rate by 0.25 percentage points. There are pluses and minuses but this is done also to avoid an increase in inflation and prices. So in general I think that the decision (to raise VAT) was right.”

ON USE OF THE DOLLAR

“The volume of our gold and currency reserves in dollars has fallen.”

“De-dollarisation is exclusively to do with transactions in between economic agents, not citizens.”

“There has been and will be no (ban on the use of the dollar).”

“The exchange rate needs to be stable. And overall we have been managing to do this lately.”

ON GRAIN, AGRICULTURE

“We retain and have even grown our grain export potential to 52.5 million tonnes. We will fulfil all of our responsibilities and contracts.”

ON KURILS TERRITORIAL DISPUTE WITH JAPAN

“The U.S. base on Okinawa has been there for decades now... We don’t understand the level of sovereignty Japan has when such decisions are made.

“What will happen after a peace agreement is signed, we don’t know. But without an answer to this question, it will be very difficult for us to take any major decisions.”

ON ANNOUNCED U.S. WITHDRAWAL FROM SYRIA

“In terms of the victory over Islamic State, overall I agree with President Trump.”

“In terms of the withdrawal of U.S. troops, I don’t know what this is about. The U.S. has had a presence in Afghanistan for 17 years, let’s say? And almost every year it says that it is withdrawing troops from there. But they are still present there.”

“We don’t see any indication of U.S. withdrawing troops as of yet but I accept that it may be happening.”

ON PRIVATE MILITARY CONTRACTORS

“Everyone must remain within the bounds of the law... I repeat, they are not breaking Russian law and have the right to work and promote their business interests wherever they like in the world.”

“If this Wagner Group (name of Russian military contractor) is breaking any laws, the prosecutor’s office must give its legal opinion.”

ON UKRAINE SETTING UP ITS OWN CHURCH

“Undoubtedly it has a political rationale. Nothing good will come of it for religious freedom in general. And I’m most concerned about the division of property that will follow. It’s already happening, effectively. It could... get bloody.” (Reporting by Moscow bureau)

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