AN EXULTANT President Vladimir Putin told tens of thousands of Russians, just outside the Kremlin walls yesterday, that the annexation of Ukraine's Crimean Peninsula was a move to protect ethnic Russians there and regain the nation's "historic roots".
Addressing a Moscow rally marking the anniversary of the annexation, Mr Putin also vowed to stand up to the West, which responded to the Russian move by slapping painful sanctions on the country.
The 62-year-old leader, who resurfaced earlier this week after a 10-day absence from public view that fuelled intense speculation about his health and hold on power, looked energetic and spoke forcefully to the enthusiastic crowd, which gathered just off Red Square near St Basil's Cathedral.
"We realised that it wasn't just about territory, which we have enough," he said. "It's about historic roots, about roots of our spirituality and statehood."
He went on to say that he continues to think that "Russians and Ukrainians are one people", and voiced hope that the Ukrainians would come to condemn "extreme nationalists" and the two nations could restore normal relations.
Fighting that flared up in eastern Ukraine between Moscow-backed separatists and government troops shortly after the annexation of Crimea has claimed more than 6,000 lives, according to the United Nations. Ukraine and the West have accused Russia of fuelling the mutiny with troops and weapons, accusations Moscow has denied.
The United States and the European Union have responded with economic and financial sanctions on Russia. Along with slumping oil prices, they have driven the Russian economy into a recession this year.
But despite the economic downturn and a sharp devaluation of the rouble, Mr Putin's popularity has remained strong at more than 80pc. He vowed that Russia will resist the Western pressure, and "overcome all the problems and difficulties they have tried to create for us from the outside".
He added, on a note of self-irony, which contrasted with the festive, proud mood of the rally, that "we will overcome the difficulties, which we have so easily created for ourselves in recent times".
It was not clear what Mr Putin meant, but Kremlin critics have held the president responsible for driving Russia into isolation with the annexation of Crimea and support for the separatists in eastern Ukraine. They said the Kremlin has made matters worse by banning most Western food in retaliation to the US and the EU sanctions, a move that helped fuel inflation and contributed to a plunge in living standards.
Earlier, Russia accused Ukraine of breaching a cease- fire agreement by assigning a special status to its easternmost regions as skirmishes continued in conflict areas. Ukrainian President Petro Poroshenko signed legislation yesterday that envisages self-governance for the rebel-held territories. Lawmakers also appealed to the United Nations and the European Union to send peacekeepers and passed a separate decree declaring some areas an "occupied" territory.
That move may undermine the peace process and lead to destabilisation, Russian Foreign Minister Sergei Lavrov said.
"This is an attempt to turn everything we have agreed upon on its head," Mr Lavrov told reporters in Moscow. The law "completely rewrites the agreements, or to put it more simply, violates them."
While the cease-fire negotiated last month in the Belarusian capital is largely holding, the sides are trading accusations of violations and blame each other for a lack of effort to achieve a lasting resolution.
Ukraine's bonds have dropped to record lows as the government scrambled to obtain foreign aid and started debt restructuring talks.
The note, due July 2017, traded at 40.5 cents on the dollar by 8:26pm in Kiev, after falling almost seven cents in five days. The hryvnia, this year's worst-performing currency with a 33pc plunge, weakened for a fourth day, losing 4.6 pc against the dollar, according to data compiled by Bloomberg.
Industrial production fell 22.5pc in February compared with last year.