Russia manages to remain a great military power despite decreasing its defense budget, while other countries keep pumping money into their armies, Vladimir Putin said, during his annual Direct Line Q&A session.

"We are probably the only great military power that is reducing its defense spending," the President pointed out. At around $48 billion, "Russia is just seventh in the world in absolute value" when it comes to the size of the military budget, he reminded his audience. "We are surpassed -sizably- by the US, which spends $720 billion dollars" and by other countries, including Saudi Arabia, UK, France and Japan, he said.

But despite all this, Russia not only manages to maintain military and nuclear parity, but also to "surpass our competitors by two or three steps," he said, adding that "it's something to be proud of. No other country has such state-of-the-art high-tech weaponry like ours. I'm talking primarily about our hypersonic missile technologies."

Russia's defense budget, which stands at 2.9 percent of GDP in 2019, will drop to 2.87 percent next year and to 2.8 percent in 2021, according to the head of state.
"The trend to reduce military spending is there," but defense remains an important expenditure for the state, he said, remembering a famous quote: "If you don't want to feed your army - get ready to feed someone else's."

Western economic restrictions have deprived the Russian economy of $50 billion, but the European Union has been hit harder, losing $240 billion since 2014, according Russian President Vladimir Putin.

Other countries also felt the impact of anti-Russian sanctions. The US, which does not have the biggest trade turnover with Russia, has lost $17 billion due to sanctions, while Japan lost $27 billion. "It affects the jobs in these countries, including the European Union. They lose our market," the Russian president stated.

Putin added that the West is unlikely to significantly change its attitude toward Russia anytime soon, so Russia must strengthen its economy to secure its "place under the sun."

Russia has managed to benefit from Western economic pressure, according to the president, as the country started phasing out imports and replacing them with domestically made products, even in sectors in which it did not have any experience. As an example, Putin said that prior to sanctions, Russia had never produced marine engines, but developed them out of necessity, with some even surpassing foreign analogues. The same applies to transport and power industry engineering, he added.

Russia will not reach any agreement with the United States on the future of Syria at the cost of Syria itself or Moscow's interests and principles, President Vladimir Putin has said.

A journalist asked Putin if there would be a "grand deal" with the US on Syria as the country begins to recover from years of hostilities and destruction.

"What do you mean 'a grand deal'? Sounds like some commercial act. No. We don't sell out our allies, our interests or our principles," Putin said.

He said that Russia is willing to negotiate a political transition in Syria with various stakeholders. "Can it be done? I believe it can, provided there is goodwill of everyone involved in the conflict."

Putin highlighted Turkey and Iran as Russia's immediate partners in resolving the Syrian crisis, but said countries like the US, Israel, Egypt, and Jordan have legitimate interests in what happens in Syria as do the European nations, which were hurt by mass migration triggered by it. "We have to work together on it," he stressed.

President Vladimir Putin has dismissed allegations by international investigators who have accused three Russians, one Ukrainian of using a surface-to-air missile, brought from Russia, to shoot down Malaysian Airlines flight MH17.

Asked whether he thought it was time for Russia to acknowledge responsibility for the shooting down of the plane, with the loss of almost 300 lives, Putin said there was nothing to acknowledge.

"Russia never avoids responsibility that is actually hers to bear. What we were presented as proof of Russia's guilt absolutely doesn't satisfy us. We believe it is no proof at all," he said.

"We have a version of our own, which we presented. But unfortunately nobody wants to listen to us. As long as we don't have real dialogue, we won't find the right answers to the questions about this tragedy and the deaths of people. We certainly mourn them and we believe such acts are intolerable."

It's hard to calculate Iran's response to a potential US invasion, Vladimir Putin has said, adding that assaulting the Gulf state could bring "disaster" to the entire Middle East region.

There are voices in the US calling for a military action against Iran, but hopefully, such a scenario will never come true, Putin admitted on Thursday. An all-out invasion of Iran could trigger "a disaster in the region" due to the spike in violence and, possibly, waves of refugees fleeing for safety. That aside, "anyone attempting to do this" would also pay a price, he cautioned. "It is hard to foresee what happens if military force is used."

Iran is a Shiite country and Iranians have a reputation as people that go to extremes if their country is attacked, according to Putin. "No one knows what those extremes will bring and it's hard to say who will be affected."

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