Russia to get stronger nuclear navy, Putin says

SEVERODVINSK, Russia - President Vladimir Putin oversaw the start of construction of one of Russia's newest generation submarines on Monday and vowed to boost nuclear naval forces to safeguard the country's position as a leading sea power.

Warning that its navy would protect top energy producer Russia's interests in the oil-rich Arctic, Putin led the ceremony to begin building the submarine Prince Vladimir, named after the ruler who founded a precursor state to modern Russia.

Russian President Vladimir Putin speaks at a meeting during his visit to the Sevmash ship yard in the North Russian city of Severodvinsk July 30, 2012. Putin oversaw the start of construction of one of Russia's newest generation submarines on Monday and vowed to boost nuclear naval forces to safeguard the country's position as a leading sea power. Warning that its navy would protect top energy producer Russia's interests in the oil-rich Arctic, Putin led the ceremony to begin building the submarine Prince Vladimir, named after the ruler who founded a precursor state to modern Russia. [Photo/Agencies]

The vessel is the fourth Borei class submarine, designed to carry one of the country's newest and most powerful intercontinental nuclear missiles, the Bulava, or Mace.

"We believe that our country should maintain its status of one of the leading naval powers," Putin told a meeting of naval commanders and government officials at the sprawling Sevmash shipbuilding yard in northern Russia.

Invoking Cold War rhetoric, Putin took a stab at the United States nuclear submarine forces, which Moscow carefully watched across the Atlantic Ocean for decades.

"First of all we are talking about the development of the naval part of our strategic nuclear forces, about the navy's role in maintaining the strategic nuclear parity," he said.

Putin is working to make the submarines and the missiles they will carry a cornerstone of the Russian navy, which will receive nearly a quarter of the 20 trillion roubles ($621.31 billion) to be spent by the end of the decade.

After nearly two decades characterised by a lack of funding, Russia is pushing to modernise its fighting forces, and redesign its armaments.

Deputy Prime Minister in charge of the defence industry, Dmitry Rogozin, also said on Monday that Moscow was likely to ask state-controlled banks to finance 200-to-300 billion roubles annually in credits as part of the overall plan.

Rogozin said the move would leave more cash in state coffers as a safety buffer.

"We see what is happening in the world now, we see in what turbulences south European countries are, we see the problems in the euro zone," he said.

"That should not mean cutting spending assumed in the government armaments programme," he also said, adding Sberbank , Gazprombank, VTB and VEB were among potential creditors.