On December 12, Russian President Vladimir Putin delivered the first speech of his term in office to the federal assembly—the Duma (parliament) and federal council. The speech was marked by nationalist propaganda, remaining deliberately vague on all important areas of foreign and domestic policy.

Putin spoke amid a deepening economic crisis and growing political tensions. His regime has been destabilised by geopolitical conflicts with the United States, particularly over US war threats against Syria and Iran, as well as by the economic crisis and anti-government protests.

Putin began his speech by warning that the coming year for Russia and the whole world would bring decisive changes, “perhaps even convulsions.”

Russia should remember with pride its role in World War I, he added: “Our ancestors called it the ‘great war’, but it was undeservedly forgotten; due to a series of political and ideological reasons it was practically eliminated from our historical consciousness and from history.”

Remarkably, Putin did not address the western powers’ preparations for war against Syria and Iran, which Moscow and Beijing have opposed. Putin said only that Russia must not only maintain, but expand its geopolitical position.

One reason for Putin’s deliberately vague stance is the differences which exist within Russian ruling circles over issues of foreign policy. In November Putin dismissed Defence Minister Anatoly Sergeikov and several top military officers including Chief of Staff General Nikolai Makarov. Makarov had recently threatened preventative war against the United States.

Putin noted the significance of the economic union Russia intends to establish with Kazakhstan and Belarus, which should serve as the basis for a “Eurasian union.” In the context of the Syrian conflict, US Secretary of State Hillary Clinton criticised the “Eurasian union” as an attempt by Russia to expand its geopolitical influence in central Asia and Eastern Europe under the cover of “economic integration”. She announced that the US would prevent this.

Trying to win over anti-government protesters, Putin noted the importance of “transparency”, “political participation” and “responsible government.” A few days before, he said the protest leaders were “clever people.”

At the same time he underscored in his speech that “political competition” must remain within the framework of the law, which his government has sharply restricted over the past year. He affirmed his support for a recently-enacted law designating organisations financed from outside Russia as “foreign agents.”

In the opposition movement, liberal parties supported by the US play a role, as well as the pseudo-left and far-right groups. The movement also enjoys political sympathy within sections of the ruling elite. Several prominent supporters of the protest movement sit in the federal assembly, before which Putin gave his speech.

The speech’s key theme was vehement nationalism and the defence of a strong state. Putin promoted the importance of “true patriotism”, which had as its goals the protection of the state and the interests of the nation.

He warned at the same time of nationalist “secessionist” tendencies threatening the existence of a “united Russia.”

Behind the invocation of the nation and state is the fear of a social explosion and a movement of the working class. The Kremlin is increasingly mobilising reactionary political forces and nationalist propaganda in order to attack and divide the working class.

One of the few concrete measures Putin suggested in his speech was more radical action against immigrants. Last summer the governor of South Russia Alexander Tkatschov, a Putin ally, suggested he would use Cossack militias against immigrants in his region. Then, last autumn, Putin expressed his support for a ban on headscarves in schools. The Medvedev government has presented plans for establishing work camps for migrants on a national scale.

Putin also said he wanted to expand the collaboration between the state and the Orthodox Church. He cynically claimed to detect a “lack of compassion and empathy” in society, and that “institutions” promoting these traditional values must be supported from the state.

Bourgeois commentators in Russia and the west criticised above all the parts of Putin’s speech dealing with economic policy. They complained that Putin was merely repeating things he and Medvedev had said over recent years—that the economy would be “modernised” and the dependence on exports cut. No actions had resulted from such earlier claims, however.

Behind the criticisms of Putin’s speech are demands for stronger and more decisive attacks on the working class. A typical comment in the liberal newspaper Nezavisimaya Gazeta at the end of November, “Europe imposes anti-crisis measures”, celebrated EU austerity policies. Experts and businessmen cited in the article warned Putin not to turn Russia in to a new Greece.

The Putin government is preparing a massive austerity program for 2013-15, as well as pension cuts. Putin did not deal with any of these reforms in his speech. The budget for 2013 to 2015 has been debated extensively within the ruling elite for over six months. There are sharp differences over military spending and the pension reform. Putin is no less committed to the imposition of austerity measures than his political opponents. The differences exist only over the tempo and the ways they are to be imposed.

Putin is conscious of the social powder keg upon which his government sits, and fears an escalation of social tensions. Putin’s ratings in the polls fell in the autumn to a ten-year low, whilst support for the Medvedev administration declined from 29 percent in May to just 9 percent in November, according to the Levada centre.

Recent months have seen a new wave of factory closures and mass layoffs; several businesses are close to bankruptcy.The situation of so-called “mono-cities”—small cities built around one factory in the era of Stalinist industrialisation—is especially precarious. There are officially 335 such cities, and over 10 percent of the population (14 million people) lives in them.

In over half of these cities, the unemployment rate is 2.5 to 4 times higher than the national average. Residents’ lives depend upon the factories, which employ most of the population and finance the city’s social and cultural life.

The mono-cities were affected by the 2008 financial crisis with particular severity. Several of the factories were only temporarily saved through state subsidies. In the autumn of 2009 there were large protests in the mono-cities.

This year the state support was sharply reduced, however, and by the beginning of 2013 it will run out completely. Media commentators have warned in this context of opposition in these towns.

In the Ural area several factories have already been closed down, provoking thousands of workers to protest the closures. Hundreds went on hunger strike after they had been laid off and had received no wages for several months.