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WORLD> Europe
Medvedev to tackle crisis, Georgia in speech
(Agencies)
Updated: 2008-11-03 14:16

MOSCOW -- The world financial crisis and the consequences of the war in Georgia will be the main topics of Russian President Dmitry Medvedev's first state of the nation speech this week, the Kremlin chief said on Sunday.

Russia's President Dmitry Medvedev (L) and PM Vladimir Putin meet at the presidential residence Gorki outside Moscow, October 29, 2008. [Agencies]

Speaking in a video blog posted on the www.kremlin.ru website, Medvedev said he would deliver the speech, a closely watched overview of Kremlin policy, on Wednesday.

"The crisis started in one of the biggest countries, the United States of America, and has unfortunately spread over the whole planet and every country is having to search for answers to it," Medvedev said in the blog.

Russian equity and bond markets have tumbled over the past three months as investors dumped Russian assets on concerns the credit crisis could stall a 10-year economic boom and undermine economic stability.

Russian officials say there will be no rouble devaluation and that the state's bailout packages will calm markets and help indebted Russian companies refinance their debts.

But investors are looking carefully to see what Medvedev will say about measures to tackle the crisis, which has hammered confidence in the domestic banking system and raised fears of nationalisations.

"Medvedev will certainly seek to deliver a message of calm for the domestic markets and to boost public confidence in both the rouble and the country's banking system," said Chris Weafer, a strategist at UralSib investment bank in Moscow.

"These are the two biggest priorities for his government right now," Weafer said.

Georgia

Medvedev said a major part of the speech would address the consequences of the war in Georgia, which is seen by Kremlin officials as a turning point for relations with the West.

"This document will include in it answers to a host of the most significant questions which stand before the country," he said in the blog, an innovation introduced since Medvedev took over as president from Vladimir Putin in May.

"I mean of course the situation with which the Russian Federation was confronted in August... I mean the Caucasus crisis. We cannot ignore its consequences, consequences not only for our country but also for the whole global world order."

The short war with Georgia was sparked when Georgia sent troops and tanks in August to retake the pro-Russian rebel region of South Ossetia.

Russia responded with a powerful counter-strike that drove the Georgian army out of South Ossetia. Moscow then recognised South Ossetia and another of Georgia's rebel regions as independent states.

Medvedev said the speech would cover ways to solve domestic social and economic problems and attempts to improve the armed forces.

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