As of: February 15, 2024, 4:58 a.m
By: Bona Hyun
Comments
Press
Split
Russia is also making threatening gestures against Europe.
Putin is still running his “war economy” with confidence.
But his calculations don't always work out.
Moscow – Warnings about a horror scenario in the Ukraine war have recently been in the media.
NATO generals and military experts fear that the war could spread to the West.
This is what NATO Lieutenant General Alexander Sollfrank said in an interview with the British
Times
, and warned that NATO should now prepare for Russian missile attacks in Europe.
Germany could also be targeted.
But economists are giving the all-clear: if President Vladimir Putin goes to war against Europe, he would drive Russia's economy to ruin.
Moscow ruler: the Russian autocrat Vladimir Putin.
© IMAGO / ITAR-TASS
Russia cannot win the war in Ukraine – due to excessive military spending
On the one hand, Russia would have to accept much more military spending.
Bloomberg
explained that Russia's 2024 budget already includes massive investments in military spending.
Accordingly, the Kremlin government plans for the armaments sector to reach a value of six percent of gross domestic product (GDP).
According to the information, this corresponds to the equivalent of 112 billion US dollars (around 106 billion euros).
In December 2023, President Putin officially approved a significant increase in military spending and approved the draft budget, which earmarks around 30 percent of tax spending for the armed forces for 2024.
The signed budget plan, which spans the next three years, envisages a notable increase in spending, reaching 36.6 trillion rubles (€376.7 billion) in 2024, with an expected deficit of 1.595 trillion rubles (16.4 billion euros). EUR).
The allocation represents a significant increase in defense investment, with defense and security spending combined expected to account for around 40 percent of total budget spending next year.
If Putin goes to war against Europe, the economy could collapse
If Putin went to war against the West, Russia would have to spend a lot more money on military personnel and equipment.
This could have devastating consequences for the Russian economy.
A particularly large amount of money could flow to military personnel, because compared to the armed forces of all 27 EU member states, the number of people in Russia is much smaller.
According to Putin, 1.2 million people are to be drafted in the next wave of mobilization.
On the other hand, the EU states have a total of around 1.3 to 1.4 million soldiers.
Regardless of whether Putin could actually muster 1.2 million forces, the Russian army would still be too small to win a war against Europe, argues
Telegraph
author Andrew Lilico.
According to his calculations, Russia would have to either double or triple its current armed forces.
Another option would be to roughly double or triple military spending as a percentage of GDP.
Russia could be threatened with a Soviet trap: too much military spending
A doubling of military spending could raise it from six to 12 to 15 percent of GDP - the level that caused the Soviet economy to collapse in the 1980s.
A tripling would be even more devastating for the economy.
It has been shown in the past that increasing dependence on military investments had a fatal impact on the Russian economy.
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Around 400 employees would be affected
At that time, the Soviet Union expanded ministries and created thousands of administrative jobs.
“There were many people who depended on the war industry continuing to operate,” said economic expert Michael Rochlitz to
n-tv
.
These lobby groups are now being rebuilt through massive support for the war industry.
In fear of becoming unemployed, these people would then resist ending the war.
That is why economic growth based on war is not sustainable.
However, according to Russia expert Ben Aris, the Russian government is still a long way from the above-mentioned expenditure level, reports
ostexperte.de
.
Sanctions Impact – Russia will not be able to recover from this
On the other hand, it is not clear how long Russia can maintain its “war economy”.
“Russia’s economy is now almost completely subordinated to the goal of winning the war,” said economic expert Michael Rochlitz in an interview with
Merkur.de.
According to the independent Russian business magazine
The Bell
, there is no doubt that Putin can finance his war against Ukraine at least until 2025.
After that it could get more difficult.
In the past few days there have been reports of positive economic figures from Russia.
It was said that the economy was growing strongly, despite sanctions and the war in Ukraine.
But there are doubts about the numbers.
Statistics are part of warfare, reports Die
Zeit
.
The State Duma passed a law in February 2023 that allows the government to keep data secret.
The state could change the method of data collection if Putin does not agree with the numbers.
Putin's economy is suffering from the effects of the war in Ukraine
Russia's economy could already be feeling the consequences of the war more severely than it portrays.
The Ukraine war and associated multilateral sanctions are placing significant strain on the Russian economy, contributing to rapidly growing spending, a devaluation of the ruble, rising inflation and a tight labor market reflecting labor losses.
According to Lilico
, the oil embargo imposed by the West alone is costing the country
hundreds of billions of dollars.
(bohy)