TODAY: Putin says sanctions make peace with Ukraine less likely; Russians support direction of economy; half of Russians see a Putin personality cult; Central Bank considering ‘stress scenario’ of lower oil prices for longer; less bureaucrats, more wages; foreign mass media ownership bill signed into law; Yankauskas house arrest extended.

President Vladimir Putin said that the pressure of Western sanctions ‘complicate[s] dialogue’ on the issue of Ukraine, further distancing the possibility of making a peace settlement with Kiev.  The compliance of Western companies in following sanctions and avoiding cooperation with Russia, he added, will damage their reputations, making it ‘difficult to recover’, and causing other countries think twice about investing in the U.S. banking system.  Sergei Ivanov refuted rumours that sanctions have split Putin’s inner circle, and insisted that, despite the economic damage caused, sanctions have had a ‘positive psychological effect on the public opinion’; an estimated 62% of Russians believe that the economy is going in the right direction.  Analyst Vasily Kashin says technology export sanctions will only boost cooperation between Russian and Chinese technology industries.  The unwillingness of foreign banks to engage with Russian projects is delaying financing for the South Stream gas pipeline project, according to Gazprom.  Prime Minister Dmitry Medvedev says U.S. President Barack Obama must have an ‘aberration in the brain’ for having called Russia a threat to humanity.  Putin will be a guest of honour at a military parade in Belgrade today, but the country’s sights are set on Europe.