Russia admits it faces economic collapse over Putin’s war

The Telegraph

Russia admits it faces economic collapse over Putin’s war

Louis Ashworth – May 9, 2022

Russia economy war Ukraine sanctions oil energy Kremlin Putin - REUTERS/Shamil Zhumatov
Russia economy war Ukraine sanctions oil energy Kremlin Putin – REUTERS/Shamil Zhumatov

Russia’s economy has plunged into its worst crisis for almost three decades as the country is battered by Western sanctions, a leaked copy of the Kremlin’s own forecasts shows.

The Russian finance ministry is predicting a 12pc collapse in GDP this year, the biggest contraction since 1994 when it was shifting towards capitalism under Boris Yeltsin, the first post-Soviet president.

A collapse would wipe out around a decade of economic growth.

The leak will pile pressure on Vladimir Putin, who on Monday presided over a scaled-down version of Russia’s annual Victory Day parade marking the end of the Second World War in Europe.

Russia has been hammered by heavy sanctions following the invasion of Ukraine, which are about to be ratcheted up further as Brussels discusses a ban on oil from the country.

It has left the Kremlin teetering on the edge of a default after it last week narrowly avoided a failure to pay foreign debts for the first time since the Bolshevik revolution a century ago.

The Kremlin has yet to issue a public economic outlook, but the finance ministry’s figures – seen by Bloomberg – are more pessimistic than the central bank’s forecasts of a contraction between 8pc and 10pc this year.

The International Monetary Fund expects an 8.5pc decline. The dire figures emerged as Mr Putin appeared at a Victory Day parade in Moscow.

The president did not use a speech to formally declare war against Ukraine or announce a larger-scale mobilisation, continuing to refer to the conflict as a “special operation”.

Krishna Guha, an analyst at Evercore, said Mr Putin “is wary of risking domestic support for the war through mass conscription”.

Meanwhile, European officials are locked in talks over how to press ahead with a mooted buying ban on Russian oil and gas.

The European Commission is reportedly mulling offering more money to landlocked eastern European countries to build support for a ban, which is facing stiff opposition from Hungary.

Britain and the UShave already vowed to ditch Russian oil, and European countries are also seeking to wean themselves off gas supplies from Moscow. Russia’s central bank has repeatedly slashed interest rates in recent weeks after raising them at the onset of conflict.

The cuts, aimed at driving spending, came despite a surge in inflation to 17.7pc.

Speaking in late April, governor Elvira Nabiullina warned of a severe recession, soaring prices and severe disruption to Russia’s labour market. She said the Russian economy would likely then remain stagnant in 2023.

Official figures showed Russia’s economy grew by 3.7pc in the first quarter, but Ms Nabiullina said this was a temporary boost driven by people stocking up on the goods.

Russia’s economy shrank by 3pc during 2020, the first year of the pandemic, and 7.8pc in 2009 amid the global financial crisis. Business surveys suggest activity is continuing to contract as sanctions cause demand to dry up.

Bosses are increasingly pessimistic about the conditions they face as they whittle down work backlogs amid falling orders.

Companies are firing staff and trying to cut costs as they grapple with soaring cost inflation, according to the latest purchasing managers’ index data from S&P Global.

Several of the world’s biggest shipping companies are boycotting Russia, piling further inflationary and supply pressure on the country.

Survey data tracked by Goldman Sachs suggests Russian economic activity is stabilising at about 10pc below pre-invasion levels.

“Overall, mid-term developments will depend on how effectively Russia can substitute imports and redirect (energy) exports,” said analyst Clemens Grafe.

Russia is running out of precision-guided munitions and may struggle to replenish their stocks

The New Voice of Ukraine

Russia is running out of precision-guided munitions and may struggle to replenish their stocks, says UK Defense Ministry

May 9, 2022

Russia destroys residential buildings across Ukraine
Russia destroys residential buildings across Ukraine

Read also: Biden signs Lend-Lease for Ukraine, Ukrainian forces stopped Russian offense in Luhansk Oblast

“Russia will likely struggle to replace the precision weaponry it has already expended,” the UK MoD noted, adding that Russia’s invasion of Ukraine revealed shortcomings in the ability of Russian forces to conduct precision strikes at scale.

Read also: UK targets $2.1 billion in trade with new Russia sanctions

“Russia has subjected Ukraine’s towns and cities to intense and indiscriminate bombardments with little or no regard for civilian casualties,” the UK Defence Ministry concluded.

Read also: UK to provide Ukraine with another $1.6 billion in military aid, defense companies to increase production

At the end of April, the Financial Times reported that Russia was facing a shortage of precision-guided missiles.

Read also: Air defense forces shoot down two enemy missiles in central Ukraine

At that time, Russia launched more than 1,900 missiles into Ukraine, many of which hit residential buildings, instead of military targets.

Let’s not make same mistakes as past once Ukraine-Russia conflict ends-Macron

Reuters

Let’s not make same mistakes as past once Ukraine-Russia conflict ends-Macron

May 9, 2022

Closing event of EU’s Conference on the Future of Europe, in Strasbourg

PARIS (Reuters) – Europe must learn from its past mistakes and make sure no side is humiliated when Russia and Ukraine negotiate for peace, France’s president said after describing Vladimir Putin’s World War Two anniversary speech as “intimidation” and “warlike”.

Addressing massed ranks of service personnel on Red Square on the 77th anniversary of victory over Nazi Germany, Putin on Monday condemned what he called external threats to weaken and divide Russia.

Speaking to reporters in the European Parliament, Emmanuel Macron said the May 9 anniversary was marked by two different faces.

On the one hand, Putin had sought to “show force, intimidation” and deliver a “resolutely warlike speech”, while on the other the EU was working on deepening a peaceful project led by the people, Macron said.-

“I believe that this project of peace, of stability, of prosperity … (we) must continue to make it more democratic, more united, more sovereign,” he said.

However, he warned that while Europe was now helping Ukraine, there would come a point when Moscow and Kyiv would sue for peace and at that point neither side should be humiliated or excluded as had happened to Germany in 1918.

“We must have this standard because we know that the coming weeks and months will be very difficult,” Macron said, adding that the 27-nation European Union would continue to impose new sanctions on Russia.

(Reporting by John Irish; Editing by Ingrid Melander)

Hackers replaced Russian TV schedules during Putin’s ‘Victory Day’ parade with an anti-war message saying the blood of Ukrainians is on Russians’ hands

Business Insider

Hackers replaced Russian TV schedules during Putin’s ‘Victory Day’ parade with an anti-war message saying the blood of Ukrainians is on Russians’ hands

Mia Jankowicz – May 9, 2022

President Vladimir Putin viewed in profile on May 9, 2022, during Victory Day celebrations in Red Square, Moscow. St Basil's Cathedral can be seen in the background.
Russian President Vladimir Putin on Monday during Victory Day celebrations in Moscow’s Red Square.Mikhail Metzel/Sputnik/Kremlin Pool Photo via AP Photo
  • Russian smart-TV schedules were hacked on Monday with an anti-war message, the BBC reported.
  • The message highlighted Russian aggression against Ukraine, countering Kremlin propaganda.
  • The hack came the day Putin spoke at his country’s Victory Day military celebrations.

Russian television schedules were hacked to display an anti-war message as the country celebrated a national military festival on Monday, BBC Monitoring reported.

On-screen program descriptions were replaced with the hackers’ text when viewed on smart TVs, the outlet reported.

According to the BBC’s translation, the message read: “On your hands is the blood of thousands of Ukrainians and their hundreds of murdered children. TV and the authorities are lying. No to war.”

Major channels such as Russia-1, Channel One, and NTV-Plus were changed, the BBC reported.

Francis Scarr of BBC Monitoring — the branch of the BBC that follows mass media worldwide — tweeted a short video of a screen showing the TV schedules, on which every program showed the same description.

The hack came during Russia’s Victory Day celebrations, a national holiday and military parade overseen by President Vladimir Putin, which was being televised in Russia. The annual event celebrates the Soviet Union’s victory alongside Allied forces over Nazi Germany in 1945.

International observers previously speculated that Putin would use the event to further propagandize or toughen his stance around his invasion of Ukraine. But his Monday speech ended without the expected declaration of mass mobilization or war against Ukraine.

Putin’s justification at the outset of the February 24 invasion was that he was launching a “special operation” to “denazify” the country. His aggression is viewed by NATO and other Western countries as a war.

But under a near blackout of independent media and social-media platforms, most Russian viewers can access only Kremlin-controlled messaging about the conflict, Insider’s Connor Perrett reported.

The message in Monday’s hack runs deeply counter to Putin’s claims that his forces are in Ukraine to “liberate” Russian-speaking Ukrainians.

It is unclear who was behind the alteration of the schedules on Monday, but the hacker group Anonymous retweeted Scarr’s tweet with the message “Good morning Moscow” within hours of the hack.

In early March, Anonymous claimed responsibility in a tweet for the hacking of several state-controlled TV channels, whose programming was replaced with footage from independent networks, Radio Free Europe reported.

Russia ‘can’t make more’ tanks because of this key sanction, Biden official says

Yahoo! Finance

Russia ‘can’t make more’ tanks because of this key sanction, Biden official says

Ben Werschkul, Senior Producer and Writer – May 9, 2022

The West has hit Russia with a range of economic sanctions including a promise this weekend from the G-7 nations to reduce their dependence on the country’s oil. But one type of sanction, so-called “export controls,” has attracted less attention than other high-profile penalties like seizing oligarchs’ yachts.

Export controls ban companies from sending crucial products like semiconductors to Russia with the goal of gradually starving its economy. But a top Biden administration official told Yahoo Finance on Monday that certain export controls may hurt Vladimir Putin’s army in the immediate future.

“Because of the export controls we’ve already put in place, Russia’s top two manufacturers of tanks are no longer in business,” Deputy Secretary of the Treasury Wally Adeyemo said Monday. “Russia today has far fewer tanks than they had going into this invasion, and they can’t make more because of the action that we’re taking with sanctions.”

The White House says the controls have left Russia’s two major tank plants — the Uralvagonzavod Corporation and Chelyabinsk Tractor Plant — idle due to a lack of foreign components. And observers noticed fewer tanks than normal at the annual military parade on Moscow’s Red Square on Monday.

A child stands on a destroyed Russian tank, amid Russia's invasion of Ukraine, near Makariv, Kyiv region, Ukraine May 7, 2022. REUTERS/Mikhail Palinchak
A child stands on a destroyed Russian tank, amid Russia’s invasion of Ukraine, near Makariv, Kyiv region. (REUTERS/Mikhail Palinchak)

Meanwhile, images of destroyed Russian tanks felled by U.S.-made Javelin missiles have become a rallying cry for Ukrainians and their allies.

‘Make sure they have less resources to fight’

On Sunday, the White House announced additional export controls on items like wood products, industrial engines, bulldozers, and more to “further limit Russia’s access to items and revenue that could support its military capabilities.”

The EU moved in tandem with new controls on items like chemicals.

A senior administration official told reporters over the weekend that export control efforts had begun on specialized products like microchips and now “we’re broadening into industrial products that have a similar effect, we think, on Putin’s ability to prosecute his war ambitions.”

As Adeyemo told Yahoo Finance on Monday, the goal is to “reduce the resources to Russia in order to make sure they have less resources to fight their war on Ukraine.”

Economist Adewale
Adewale “Wally” Adeyemo is the Deputy Secretary of the Treasury. (Greg Nash/Pool via REUTERS)

The Export Administration Regulations (EAR) as laid out in U.S. government documents apply not just to items produced in the U.S. but also claims “foreign-produced items located outside the United States are subject to the EAR when they are a ‘direct product’ of” industries like U.S. technology, software, or manufacturing.”

The moves on export controls come as part of a host of new actions against Russia announced Sunday, including sanctions against Russian individuals and businesses and an attempt by G7 nations to stop importing Russian oil. The U.S. Commerce Department also said Monday that the U.S. would temporarily suspend tariffs on Ukrainian steel for one year.

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.

Putin did not want to display his aircraft at the parade

Ukrayinska Pravda

Putin did not want to display his aircraft at the parade

Roman Petrenko – May 9, 2022

The flying display part of the parade in Moscow has been cancelled allegedly due to the weather.

Source: Putin’s spokesman Dmitry Peskov, quoted by the Kremlin media

Details: On the morning of 9 May, before the start of the [annual military Victory Day] parade, it became known that there will be no flying display in Moscow this year.

It is interesting that in recent years the Kremlin has spent billions to disperse clouds over the Russian capital to hold the flying display part of the parade.

On 6 May, the Russian Defense Ministry said the parade would feature supersonic fighters, Tu-160 strategic bombers and, for the first time since 2010, a Doomsday IL-80 command aircraft capable of carrying Russia’s top leadership in the event of a nuclear war.

On the same day, 6 May, meteorologists already knew that it would rain on 9 May and “would need to actively influence the weather.”

It is not known whether the Kremlin is saving the money on not dispersing the clouds or is simply not ready for the flying display.

Russian military continues to struggle with poor morale, refusal to obey orders

The Hill

Pentagon: Russian military continues to struggle with poor morale, refusal to obey orders

May 9, 2022

Russian forces have not made any ignificant progress in Moscow’s new offensive in eastern Ukraine, a situation partly due to poor morale and some troops “refusing to obey orders,” a senior U.S. defense official said Monday.

“We still see anecdotal reports of poor morale of troops, indeed officers, refusing to obey orders and move and not really sound command and control from a leadership perspective,” the official told reporters.

The official later said “midgrade officers at various levels, even up to the battalion level” either have refused to obey orders “or are not obeying them with the same measure of alacrity that you would expect an officer to obey.”

Russian forces have struggled to make major gains in the Donbas region of Ukraine since beginning a new offensive in the area last month.

On top of dealing with morale issues that have lingered since the start of the war on Feb. 24, the Kremlin also is struggling to resupply its troops and move its weapons and equipment in muddy spring weather, the official said.

Still, Moscow continues to send operational battalion tactical groups (BTGs) into Ukraine, with 97 such groups in the country, up from 92 late last month, according to the official. Each BTG typically consists of about 700 to 800 soldiers.

“It’s not unusual for them to move a BTG or two out of the Donbas back into Russia for refit or resupply and then move them back in. That’s normal,” the official said.

However, Russia has added about five BTGs to Ukraine in a little more than a week, all sent to either the east or the south of Ukraine, they added.

Russian soldiers stuffed a Ukrainian man’s body in his car trunk with a weight-sensitive mine that detonated when Ukrainian soldiers moved it

Insider

Russian soldiers stuffed a Ukrainian man’s body in his car trunk with a weight-sensitive mine that detonated when Ukrainian soldiers moved it, Politico reports

Azmi Haroun – May 9, 2022

Russian soldiers stuffed a Ukrainian man’s body in his car trunk with a weight-sensitive mine that detonated when Ukrainian soldiers moved it, Politico reports
People dig graves in Bucha, Ukraine, on April 5, 2022.
People seen digging graves in Bucha, Ukraine, on April 5, 2022.REUTERS/Zohra Bensemra
  • Russian soldiers booby-trapped a Ukrainian man’s dead body in his own car trunk, according to Politico.
  • His wife discovered his body and later brought Ukrainian troops to help move him, fearing a trap.
  • When they tried to pull him from the trunk with a rope, the car “exploded in a ball of flames.”

Russian soldiers killed a Ukrainian army volunteer on the outskirts of Kyiv and left his dead body in his car trunk fitted with a mine that later exploded when Ukrainian forces attempted to move him, according to Politico.

Lyudmyla Kyrpach, the soldier’s widow, told Politico that she and her husband Oleksandr “did everything together.”

Kyrpach told the outlet that the day after the invasion began in late February, Oleksandr, a mechanic, organized volunteer fighters in his village of Kalynivka, near Kyiv.

By March 1, days after Russian troops had encroached on their village, Oleksandr’s friends set out driving to see if they could source more intel about Russian troop movements up close. She told Politico’s Christopher Miller that after they failed to return, he set out to find them.

“He said he would be right back,” Lyudmyla told Politico. Oleksandr never returned, and unable to sleep, Lyudmyla set out the following day with her friends to find him.

She noticed his sedan on the road, with the keys in the ignition but no passengers in the car, she told Politico.

Lyudmyla’s friend noticed that the trunk was riddled with bullets, per the report, and they opened the trunk to find Oleksandr’s dead body. Her friend pulled her away from the car in fear that the trunk could be booby-trapped, she explained to the outlet.

By March 4 they returned to the scene with Ukrainian soldiers.

According to the report, the soldiers tied ropes to his limbs and moved far from the car to pull slowly and see if the car was rigged. As soon as they pulled, the “car exploded in a ball of flames.” Russian soldiers had placed weight-triggered mine under Oleksandr, Lyudmyla told Politico.

“Lyudmyla picked up the pieces of the man she had spent decades with and placed them in a box,” Politico reported. Later, she buried him in the garden where they used to plant vegetables together.

In April, the Ukrainian Ministry of Foreign Affairs had stated that Russia’s attacks on civilians extended beyond artillery attacks, with officials saying they uncovered booby traps scattered throughout cities including Kyiv and Mariupol.

“The Russian Federation is in war not only with the Ukrainian Armed Forces but also fights against the civilian population of Ukraine, grossly violating the Law of war,” the statement said.“While retreating Russia’s military personnel is massively setting up booby-traps, banned by the international law, even on food facilities, private housing, and human corpses.”

Last month, Ukrainian authorities unearthed a mass grave in Bucha, near Kyiv, claiming that Russian soldiers killed and buried at least 360 Ukrainians in a 45-foot-long trench. Journalists who visited Bucha after Russian troops pulled out also reported bodies of civilians in their homes, on the street, and in the suburb’s glass factory.

Is another Russia even possible?

The New Voice of Ukraine

Is another Russia even possible?

May 7, 2022

Russian flag
Russian flag

One that will not unleash wars of aggression, will not sow destruction and death for the sake of asserting its imaginary greatness.

This “other Russia” is often associated with Russian liberals who oppose the Putin regime. Like Alexei Navalny, for example. But this is another dangerous illusion.

Realizing how dangerous and anti-human the Russian terrorist state is, many still do not realize the problem does not lie only with Putin.

Read also: More than 70% of Russians support war against Ukraine, according to survey

The invasion of Hungary was led by Nikita Khrushchev, Czechoslovakia and Afghanistan was led by Leonid Brezhnev, the killings of peaceful demonstrators in Tbilisi and Vilnius by Mikhail Gorbachev, the occupation of Georgia and Moldova and the bloody massacre in Chechnya were initiated by Boris Yeltsin.

Putin has used terror, assassinations and wars of aggression as public policy, based on the chauvinistic sentiments of the majority of Russians.

With a few marginal exceptions, the Russian opposition is as imperialistic as Putin.

The Russian public supported the annexation of Crimea, and share in the hatred of an independent Ukraine and the whole free world.

It is time to finally open your eyes and stop looking for “good Russians.”

Instead, it must be made clear that the Russian Federation is a multinational state. Much of its territory is not inhabited only by Russians, but by the native peoples who lived on this land for centuries.

Read also: Euthanasia for Russia

In fact, these are whole countries, with populations of hundreds of thousands and sometimes millions who are enslaved by the Russian Empire.

In the current Russian Federation, these enslaved nations have the formal status of autonomous republics. But in practice, Moscow pursues a policy of rigid assimilation and suppression of these people’s language, culture and religion. Their political and social movements are persecuted, key figures are imprisoned, killed or forced abroad.

It is these peoples of the Russian Federation that everyone should pay attention to who wants to see “another Russia.”

Russia’s recovery is possible only through repentance and its transformation into an ordinary nation-state. The people of the empire must be set free.

The struggle of the peoples of Ukraine, the Baltic states, the Caucasus, Central Asia and all the others buried the empire of evil — the USSR. The newest evil empire — the Russian Federation — must be buried in the struggle for the national liberation of Tatarstan, Bashkortostan, Ischkeria, Tuva, Sakha-Yakutia, Buryatia and other countries.

This process should not be feared just as the short-sightedly Western powers feared the collapse of the USSR. On the contrary, it should be encouraged.

Read also: Soviet identity is gone forever, but Putin doesn’t get it

By giving freedom to all enslaved peoples through national movements from within and strong pressure from without, Russia will finally be able to become free itself.

Only in this way, and not simply by replacing one tsar with another, can another Russia emerge.

Putin is ‘doubling down’ with new offensive by Russia’s flagging army because he can’t afford to lose

Business Insider

Putin is ‘doubling down’ with new offensive by Russia’s flagging army because he can’t afford to lose, CIA director says

Joshua Zitser – May 8, 2022

Russian President Vladimir Putin speaks during the Council of Lawmakers at the Tauride Palace, on April 27, 2022, in Saint Petersburg, Russia.Contributor/Getty Images
Putin is ‘doubling down’ with new offensive by Russia’s flagging army because he can’t afford to lose, CIA director says

Putin is convinced that “doubling down” will help Russia turn the tide in Ukraine, CIA director William Burns said.

Putin may redouble his efforts because he “doesn’t believe he can afford to lose,” Burns said, per CBS News.

Russia has failed to make ground in the Donbas region, and reports say military morale is low.

Russian President Vladimir Putin is set to redouble his efforts in Ukraine despite his army’s flagging offensive, CIA director William Burns said on Saturday, per CBS News.

“I think he’s convinced right now that doubling down still will enable him to make progress,” Burns said at the Financial Times’ Weekend Festival, CBS News reported.

The Russian leader is in “a frame of mind in which he doesn’t believe he can afford to lose,” Burns continued, according to CBS News.

Putin has already “staked a lot” on the second phase of the Ukrainian offensive, Burns added, which has seen Russia refocus its military efforts on the south and east of Ukraine.

Burns’ comment that Putin will double down comes amid reports of low morale among Russian soldiers and the Pentagon’s assessment, last week, that his forces are “behind schedule.”

Russia’s invasion of Ukraine is now concentrated primarily in the Donbas region. After 10 weeks, Russian troops have still failed to take control of any major cities.

Ukrainian resistance is stiff, with analysts telling BBC News that Ukraine’s military operation is turning into a successful counter-offensive.

Putin’s “biggest mistake” throughout the invasion, Burns said, was to “underestimate the Ukrainians.”

The Russian leader is now trying “to adapt some of the lessons from the failures of the first phase,” Burns said, per CBS News.

Some Western officials expect that Putin will make a big announcement on May 9, designed to show Russia’s strength ahead of the symbolic Victory Day military parade.

There are reports that he intends to formally declare all-out war on Ukraine, which Russia has so far referred to as a “special military operation.” Other reports indicate that Putin might introduce general mobilization.

“We don’t see, as an intelligence community, practical evidence at this point of Russian planning for deployment or even potential use of tactical nuclear weapons,” Burns said, per CBS News. He added, however, that “we can’t take lightly those possibilities.”