Putin: Western sanctions could backfire

MOSCOW — Russian President Vladimir Putin has warned that Western sanctions against his country could backfire.

Speaking in an interview with German ARD television broadcast yesterday as he was attending the Group of 20 summit in Brisbane, Australia, Putin said that cutting Russian access to capital markets would hurt Western exports.

"If the resources of our financial institutions are cut off, they can extend fewer loans to the Russian companies that work with German partners," he said. "Sooner or later, it will begin to affect you as much as us."

He also said the sanctions could hurt some Russian banks, leading them to demand repayment of multibillion loans they have given to Ukraine, damaging its economy. Putin cited Russia's state-controlled Gazprombank, which he said issued loans worth $3.2 billion to Ukraine before being hurt by Western sanctions that barred it from borrowing in capital markets.

The United States and the European Union have targeted Russia with sanctions over its annexation of Ukraine's Crimean peninsula and Moscow's support for a pro-Russian insurgency in Ukraine.

The Western sanctions have badly hurt the Russian economy, sending investors fleeing Russian markets and causing the ruble to nosedive.

Putin acknowledged that the sanctions have hurt the Russian economy, but sought to put a brave face to that, saying that the Western punishment would encourage Russia to ease its dependence on oil and gas exports.

"The comfortable life, when all we had to do was produce more oil and gas, and to buy everything else, is a thing of the past," Putin said. "Now we must think about producing goods ourselves, not just oil and gas. "

He voiced hope that the Ukrainian crisis will end and Russia-West ties will improve, adding: "We want to have normal relations with our partners, including in the United States and Europe."