Putin won't back down, lauds Crimean accession as 'landmark in national history'

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In his New Year address to the nation, Russian President Vladimir Putin thanked Russians for their "invariable readiness to defend Russia's interests, to be with it both in days of triumph and in times of trial".

Russia is struggling to avoid a recession next year having been hit hard by the steep fall in oil prices and economic sanctions imposed by the US, EU and their allies over Moscow's alleged role in the Ukraine unrest.

The Russian currency has hit an all-time low in 2014 and has declined more than 50 per cent since the start of the year.

A defiant Russian President, in his New Year's address on Wednesday, lauded the decision by Crimea to "reunite" with Russia.

"It has found its reflection in our fraternal aid to the residents of Crimea and Sevastopol, after they made the firm decision to return to their native home. This event will remain a landmark in national history," said Putin.

He did indicate that Russia would need to brace itself in facing its worst economic crisis since 1998, when the country defaulted on its debt.

"In the coming year, we are facing quite a few tasks and the year will be as good as we make it, depending on how efficient, creative and effective each one of us is. There are no other recipes. We need to implement all our plans - for our own sake, for the sake of our children, for the sake of Russia," urged Putin.

Putin has blamed the economic problems on external factors, principally the West but has also pointed out that "internal mistakes" have played their part in the downturn.

"The hardships we are facing are not only external, they are caused not only by the sanctions restrictions or by restrictions linked with the objective international situation, they are also caused by our mistakes that have been made over the years," Putin was quoted by news agency.

The Russian Foreign Ministry has said restoration of Russian-US relations is possible only if Washington is ready to conduct a dialogue with Moscow as an equal partner.

"We drew on the fact that restoration of bilateral relations would be possible if Washington showed its readiness to conduct a dialogue on the principles of true equality, and mutual respect for each party's interests," a Ministry statement said this week.

Relations between Russia and the EU has also deteriorated amid the Ukrainian crisis, as European leaders criticized Moscow for its alleged role in backing the separatist rebels in eastern Ukraine.

Over the past few months, the EU, the US and their allies have imposed several rounds of sanctions targeting Russia's banking, energy and defense sectors, as well as a number of high-ranking officials.