The EU insists on sanctions against Russia and Putin is struggling to finance the new phase of the war in Ukraine. The weapon of economy acts constantly in Ukraine. Every day the conflict costs millions of dollars, on both sides. With one key difference. Behind Kiev are the resources of the whole West, behind Moscow are the resources of Russia, which before February 24, 2022 were huge and, despite extra EU gas and oil revenues and despite the support of China and the North, inevitably tend to tangle with the Time to exhaust Korea has been both clear and substantive at some stages.
The words coming from European leaders today serve to give substance to the efforts the international community is putting at the service of the Ukrainian resistance. The risk is to underestimate Russia’s military and economic capacity. But there seem to be signs that supporting what has turned from a blitzkrieg into a trench warfare is difficult. “Putin has already lost the energy battle, just as he is losing the political and moral war battle, and he is losing militarily, although Ukraine has not yet won,” said Josep Borrell, EU High Representative for Foreign Policy, speaking in Strasbourg at the plenary session of the European Parliament spoke. “We have approved nine sanctions packages and the tenth is in preparation, aimed at weakening the Russian economy,” he reminded.
The words of the President of the European Commission, Ursula von der Leyen, are eloquent. “We are trying to undermine Russia’s ability to maintain its war machine. With nine packages of sanctions already in place, the Russian economy is in recession”. But “to keep the pressure up” on Moscow, “we propose a tenth sanctions package with new trade bans and export controls on Russian technologies.” In particular, he added: “We propose export restrictions on more electronic components used in Russian weapons such as drones, missiles and helicopters.”
The real picture of the Russian economy remains shrouded in uncertainty related to the lack of objective and certified data. A problem within a problem for Moscow, if you consider that the way of financing markets not excluded by international isolation, the eastern ones, must also be able to count on common figures. The issue was also raised several times directly by the governor of the Central Bank of Russia, Elvira Nabiullina.
According to recurring rumors in the international media, Putin is trying to accumulate resources by cutting public spending wherever possible and collecting taxes and dividends from state-owned companies. But every operation, on both fronts, clashes with reality. The quality of life is deteriorating and public spending, even when kept to a minimum, serves social stability. Taxes can be levied if there is someone who can pay them, and dividends can also be “seized” but must first be earned. State-owned companies are not faring very well given the drastic reduction in their reference markets, nor can fertilizer and coal producers, natural targets of new taxes, be pressured indefinitely.
Sanctions and the money factor can weigh just as much and more than guns. Especially if Putin’s difficulties in supporting the war machine grew to the point of sacrificing everything else. (by Fabio Insenga)