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Putin Plays Down Cold War Threat as Ukraine Tensions Rise

May 25 (Bloomberg) -- Russian President Vladimir Putin discounted the threat of a new Cold War as Ukraine prepared for its presidential election, with the U.S. and its allies warning of retaliation if the Kremlin disrupts the voting.

Efforts to strengthen ties with former Soviet republics and push back against NATO expansion aren’t an attempt to revive the Soviet Union, Putin said at a meeting with media executives yesterday in his hometown of St. Petersburg.

The Russian leader has been softening his stance in the standoff over Ukraine, pledging to respect the outcome of today’s vote and work with the country’s new leader. That ran counter to other signals, including from Prime Minister Dmitry Medvedev, who last week said Russia was being pulled into a new Cold War with the U.S. and its allies.

“I wouldn’t want to think that this is the start of a new Cold War,” Putin said, adding that such a development wasn’t in anybody’s interest. “I don’t think that will happen. People try to stick us with that label, that we’re trying to recreate an empire, the Soviet Union, to subject everyone to our influence. That’s absolutely untrue.”

The U.S. and the European Union are threatening to target Russia’s economy with additional sanctions if the election is disrupted in Ukraine, where government forces are fighting pro-Russian separatists in the eastern regions. Medvedev in a May 20 interview with Bloomberg Television said the penalties were reminiscent of economic warfare used by the Soviet Union under Leonid Brezhnev.

Recession Risk

Sanctions already imposed over Russia’s absorption of the Crimean peninsula in March have pushed the economy to the brink of recession, with growth slowing to 0.9 percent in the first quarter from a year earlier and capital flight jumping to $50.6 billion in January-March, compared with $63 billion in all of 2013.

Putin defended the move to absorb the Black Sea peninsula as a reaction to the North Atlantic Treaty Organization advancing toward Russia’s borders and what he said was U.S. and EU support for the ouster in February of Ukraine’s Russian-backed president. The U.S., the EU and Ukraine haven’t recognized that Russia has a right to Crimea.

“We feel they were trying to talk to us from a position of strength and we acted on the same logic, giving an adequate response,” Putin said. “I hope that it is never, nowhere and in no way repeated.”

To contact the reporter on this story: Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Torrey Clark, Andrew Langley

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