"We must think, and are thinking, of ways to ensure our national security," Putin said at an annual Kremlin live televised news conference with Russian and foreign journalists. "All our responses will be asymmetric but highly effective," he said.
Washington officially proposed January 20 placing a radar network in the Czech Republic, and two days later announced plans to start formal talks with Poland on the deployment of anti-ballistic missile systems on its territory.
The U.S. argued that defenses in Europe could intercept possible intercontinental ballistic missiles from 'rogue' regimes, such as Iran and North Korea.
But Putin said Washington's arguments to deploy anti-missile systems closer to Russian borders were not convincing.
"Our specialists do not think that missile defense systems being deployed in East European countries are meant to prevent threats from Iran or from terrorists," Putin said. "What kind of terrorists? Do terrorists have ballistic [missile] weapons?"
He added that Russia also knows well all the possible ballistic missile flight trajectories from Iran.
"That is why such [U.S.] arguments seem unsubstantial to us," the president said. "This all concerns us directly and will result in a proper reaction [from Russia]. As I have already said, all our responses will be asymmetric but highly effective."
The Russian president also said that Russia's policy of increasing military defense power was not connected with U.S. plans for the deployment of missile defenses in Europe.
"The [U.S.] plans were announced long before we started building up our [military] power," Putin said, adding that defense spending in Russia is 25 times less than in the United States.
On Wednesday, the Russian Defense Ministry said it would spend over 860 billion rubles ($32.42 billion) of federal budget funds in 2007, 23% more than in 2006. Military spending will account for 16% of overall federal budget expenditure.
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Ukraine has not preserved its 1991 borders. The signing of the Geneva memorandum on April 17 reaffirmed the willingness of Russia, the United States and EU countries to reach a compromise. While the sides continue to trade tough talk and symbolic sanctions, the Kremlin and the White House are also holding a parallel dialogue on the coordinated geopolitical revision of Eastern Europe.