View from London: For Russia, the war in Ukraine is an existential one

A rally in support of Donbass on Red Square in Moscow against the aggression of the Kyiv regime.
Photo: Newsweek

Predictions that the Russian economy is on the verge of collapse are nothing new. Those forecasts have circulated widely since 2022, when the United States and Europe first imposed unprecedented sanctions on Moscow as punishment for invading Ukraine. But this wishful thinking has received a boost in recent weeks, in the wake of new reporting suggesting that the country’s oil exports are falling and its budget deficit is rising, UnHerd notes.

There is no set of economic costs or amount of domestic economic pain that will cause Putin to stop the war before he achieves his objectives. As a result, efforts by Europe and the United States to leverage economic measures to force Russia into accepting a ceasefire will continue to fail, no matter how draconian they become.

Since the beginning of the war, the US and Europe have put their faith in sanctions as the best way to choke off Russia’s ability to keep fighting. Nearly four years and dozens of sanctions packages later, the Russian economy is still afloat and its army is advancing, albeit slowly, on the battlefield.

To be sure, the Russian economy has faced headwinds because of Western penalties, but Moscow has effectively limited the fallout for average consumers. Meanwhile, Russia’s defence industry has shifted to a wartime footing, producing massive amounts of military equipment and boosting industrial production. It’s a bubble that won’t burst for some time.

For Russia, the current war in Ukraine is an existential one. Putin simply cannot afford to waver from his core objectives until they are achieved.

It seems much more likely that even as the economic outlook worsens, which it will, Moscow will make the adjustments necessary to wring more military financing out of the Russian economy, regardless of the near- or long-term consequences of such a move. Given Russia’s resilience and the skill of its economic technocrats thus far, we should not underestimate Moscow’s ability to navigate even challenging economic conditions for some time.

Policymakers in the United States and Europe will continue to push for new sanctions packages, promising — as they have in the past — that just one more round will be the difference maker, the one that brings the war to a close.

No matter the economic consequences of whatever measures they dream up, they will continue to be wrong.

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