By Nina Bachkatov
On 18 July, the European Union approved its 18th package of sanctions against Russia, expanding the list of Russian banks excluded from the SWIFT system and imposing a third round of sanctions on companies involved in trading Russian oil above the newly lowered price cap of $45 per barrel—down from $60 previously set by the G7. The objective remains unchanged since the first wave of sanctions in 2022: to deprive the Russian state budget of funds for financing the war, and to weaken the economy to the point where elites or the broader population might pressure President Vladimir Putin to end the conflict—or potentially push him from power.
Yet, the challenge has always been to strike a balance between weakening Russia and protecting the EU’s own economic stability—an issue that has never been adequately addressed. This tension partly explains the difficulties in formulating each successive sanctions package.
Nevertheless, sanctions are having an impact, a fact acknowledged increasingly by officials and even by Putin himself. Speaking at the St Petersburg International Economic Forum in June, he dismissed claims that the war was devastating the Russian economy, famously quoting Mark Twain: “The report of my death is greatly exaggerated.” He cited continued GDP growth, low public debt and economic diversification as evidence of resilience under pressure. However, he also warned that the economy risked cooling too sharply after two years of war-driven expansion. Economy Minister Maxim Reshetnikov echoed the concern, cautioning that Russia was “teetering on the edge of recession,” while business leaders presented sobering figures from their respective sectors.
Continue reading “Inflation, Jobs, and Resilience in Russia”