Russia funds its war through a dual system: the official defense budget and a covert bank financing scheme. Putin’s narrative of economic resilience is unraveling as financial instability mounts. 2/
Off-budget financing through forced bank loans equals $210-250 billion, matching the size of the defense budget. 3/
Corporate debt in Russia surged 71% ($415 billion or 19.4% of GDP) since mid-2022, with 70% going to war-related sectors. 4/
Central Bank forced to raise interest rates above 21% to combat inflation caused by preferential lending scheme. 5/
Russian banks operating under eased regulations, leading to aggressive lending without proper liquidity buffers. They required to provide below-market-rate credit to state-designated companies. 6/
22%+ Gazprom borrowing, other high borrowing costs creating financial distress among regular companies. Rostec CEO Chemezov warns expensive credit is damaging the weapons export business. 7/
State privatized credit scheme amounts to about 20% of Russia 2023 national output. Western sanctions have blocked Moscow access to $300 billion in reserves. 8/
Potential bailout could cost half of Russia’s 2024 federal budget, threatening future military funding. 9/
The risk of bank collapses looms large, reviving Russian fears of worthless deposits from past crises. Putin now faces a stark choice: continue the war in Ukraine or safeguard his grip on domestic power. 10/
The West must sustain sanctions and assert its resource superiority to exploit Russia’s financial weaknesses. Sanctions relief should be categorically off the table until a comprehensive peace deal, including reparations, is secured. 11X
Strongest terms possible.
All Australian embassies around the world will stop buying Russian vodka forthwith.
Kev Rudd said it doesn’t bother him because he only serves the best French Burgundy and champagne.
The war with Ukraine has been accompanied by a deficit from the very beginning. Not only of people or equipment, but also of meanings. And a recent interview with Vasily Yakemenko demonstrates this. Today we will discuss it and also see what meanings pro-war thinkers are trying to find in what is happening.
It was investigated to the wazzo, the CVR recording is definitive, they decided to do a VFR landing at an airfield that had no ILS capacity, and the airport was completely fog bound. They knew this, and even pressed on, at decision height with no visibility.
It was “get there-itis” because the president was onboard. Potentially made worse by an Airforce general onboard.
If you take the view the Russia convinced the pilots to be suicidal, then you might have a case.
100% true, but … Hitler delayed the assault by 2 months so he could deal with Serbian impertinence, meaning winter struck just as they were approaching Moscow (and had taken Stalingrad). But for some arrogant hubris, could have gone the other way.
