Janis Kluge Profile picture
Mar 6, 2023 6 tweets 3 min read Read on X
1) New data on Russia's federal #budget in February is out. Some normalization after a high January deficit was expected, but the opposite happened. The deficit grew to 2.6 tn RUB, 1.7% of GDP after two months. Revenues in February 2023 were 1.8 tn RUB, expenditure 2.6 tn RUB.
2) Last year around this time, the Russian budget was firmly in positive territory. The January 2023 deficit was clearly not representative, but an additional deficit of 800 billion RUB in February shows it's not a one-off phenomenon.
3) On the revenue side, the problem for Russia's finance ministry are the very small oil and gas revenues. This will slightly improve in the coming months, as Russia will adopt a new formula to calculate taxes (based on a higher assumed oil price).
4) On the expenditures side, the war is forcing the government to pay upfront for weapons. This is supposed to lead to lower spending in December, but I believe that when I see it. Overall, it still looks like spending will be significantly higher than planned.
5) Important to take into account strong fluctuations month-to-month in Russia's budget, which happen for different reasons (seasonality, tax rules, one-off payments etc.). But based on today's data, Russia's government will need to borrow a lot more than planned for this year.

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More from @jakluge

May 5
Ein sehr gutes und wichtiges Gespräch zum Thema "Verhandlungen und Einfrieren" von @AliceBota und @MichaelOThumann. Es geht um die alten Mythen der Russlandpolitik, die gerade durch Wagenknecht und Mützenich eine Renaissance erleben, aber auch um die Verhandlungen von 2022. 1/6
Der Text von Charap&Radchenko ist dabei ebenfalls Thema. Michael Thumann berichtet von seinen Gesprächen mit Unterhändlern in Istanbul. Alice Bota beobachtet gut, dass alle russischen Äußerungen von den Autoren des Textes (geradezu ahistorisch) für bare Münze genommen werden. 2/6
Ganz zu schweigen von der (wie ich finde: unsäglichen) Überschrift des Artikels, die letztlich das einzige ist, was bei vielen hängen bleiben wird (und nebenbei Putins Propaganda bestätigt). Wirklich gut dagegen der Titel des Podcasts: "Dann halt einfrieren". 3/6
Read 6 tweets
Apr 16
The key problem I have with this piece is the assumption that Putin agreed to, or even cared much for, the Istanbul Communique at the time. The authors seem to have their own doubts (Putin agreed to debate the status of Crimea with Ukraine?).
1/4

foreignaffairs.com/ukraine/talks-…
The authors fail to point out that Putin didn't appear to be deeply involved in the process at the time and only began bringing up the supposed "almost deal" much later, with the rather obvious intention to discredit the West and improve his image with the Global South. 2/4
I also find the role of Chalyi... interesting. He appears to be a key witness of the "Putin wanted a deal" theory. While he was part of the negotiations, he was criticized in Ukraine for being too understanding of Russia (maybe that's why Kyiv hoped he could help negotiate?). 3/4
Read 6 tweets
Mar 13
Although it will take many more attacks on refineries to create a real gasoline shortage in Russia (and even then, Belarus has available capacities), it is an effective strategy for many reasons:
1.) A gasoline shortage would be a political nightmare for Putin, because it would..
.. be felt and discussed by everyone. Gasoline prices are political, even in Russia. Average Russians are not willing to pay a price for the war.
2.) Refineries are important for the military. Of course the military will not feel shortages, but refineries are legitimate targets.
3.) There are very few civilian casualties. High gas prices make people angry, but nobody will starve, freeze etc. due to the attacks.
4.) Attacks on Russian refineries don't lead to rising oil prices globally, as long as crude exports continue. The effect is felt only in Russia.
Read 5 tweets
Dec 17, 2023
Why won't the Kremlin agree to a compromise in Ukraine? The answer lies in Putin's motives. Initially, it may have been imperialism and a desire to control Ukraine. That was bad enough, and difficult enough to stop. But after the full-scale invasion began, the motives changed.
The reason is that the Ukrainian military exposed the weakness of Putin's regime. Russia was humiliated on the world stage. Since then, it is not about domination: Putin needs to destroy Ukraine and humiliate the West because they openly challenged him and exposed his weakness.
Putin can't let Ukraine get away with this. Throughout his time in power, he has carefully cultivated a reputation for destroying and humiliating those who openly challenge him. Crucially, this destruction must be a spectacle, shocking and demoralizing. Saving face is not enough.
Read 8 tweets
Sep 18, 2023
There are two dominant arguments in the Western discourse on Russia's war against Ukraine:
1.) Russia is weaker than it seems, the war and Putinism will go away once Ukraine kicks Russia out.
2.) Russia is stronger than it seems, so some kind of deal with Russia is necessary.
It is difficult to go beyond these lines of thought: If you point out Russian strength, there's an automatic suspicion that you want to porpose a deal with Russia, or that you're not loyal to the Ukrainian cause.
This is because the "Russia is tough" argument is often misused and distorted by pro-Russian voices ("Russia cannot be defeated") who want to stir up fear and hopelessness or suggest that there is no reasonable option but to give in to Putin. This, of course, is propaganda.
Read 5 tweets
Mar 23, 2023
What are the effects of #sanctions on the opinions of Russians about the West and the war? There is a naïve pro-sanctions view: Sanctions lead to economic hardship which is then attributed to the war and leads to anti-war sentiment. This is certainly not happening. 1/
There is also a naïve anti-sanctions view: Sanctions lead to economic hardship, which is attributed to the West's hostility and leads to a "rally-round-the-flag" effect and stronger support for Putin. This is also not happening. 2/
From my experience, there are two groups: The "enlightened group" of educated Russians, a minority, and the "loyal group" of Russians, the majority, who rather believe in Putin and the official line on foreign policy. Interestingly, the sanctions effects on both is complex. 3/
Read 19 tweets

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