The Russian economy, including its military-industrial complex, is showing signs of exhaustion. Prices are skyrocketing, electronic components are missing, and labor shortages are desperate. Migrants from Central Asia often face a hostile reception and can hardly replace the tens of thousands of specialists who have left Russia. Is this why Putin’s regime is trying to stop the war against Ukraine, but on its terms, as Viktor Orban’s initiative suggests? Françoise Thom writes that it would be unfortunate if the West gave in to the pressures of peacemakers while the Moscow autocracy itself is on its last legs.
Do not imagine that his empire is everlastingly secured to him as a god. There are who hate and fear and envy him, Athenians, even among those that seem most friendly; and all feelings that are in other men can be found, we may assume, in his friends and allies. But now they are all cowed, having no support because of your sluggishness and indolence, which I say you must abandon right now. For you see the situation, Athenians, how arrogant the man has become, who leaves you not even the choice of action or inaction, but threatens and uses outrageous language, and, unable to rest in possession of his conquests, continually widens their circle, and, while we wait and delay, throws his net all around us. […] It is shameful, Athenians, to delude ourselves, and by putting off everything unpleasant, never to take action except in hindsight, while you refuse to understand that the way to conduct a war is not to follow, but to precede events: just as a general leads the troops, so a good politician must guide circumstances, in order to be able of always acting according to his will, without ever being forced to trail behind events….
Demosthenes, First Philippic
Recently, the media has been abuzz with rumors about possible peace negotiations between Russia and Ukraine. A series of consistent reports suggest that the Kremlin has decided to push for Ukraine to lay down its arms. The operation unfolds in two stages. In a speech delivered on June 14, President Putin presented his conditions for establishing a ceasefire: the withdrawal of the Ukrainian armed forces from the four regions most affected by the conflict in the east of the country, and the abandonment of its NATO membership application. These demands, obviously unacceptable to Kyiv, paved the way for a parallel phase of the operation.
Interior Minister Kolokoltsev allegedly used his participation in the police chiefs’ summit held in Washington on June 26-27 to bring a peace plan to the United States, the content of which was disseminated by Ukrainian journalist Dmitro Gordon and by the Russian Telegram channel Gosdoumskaya, which claims to have sources in the Kremlin. Here are the Russian conditions: Ukraine must fully evacuate the Luhansk and Donetsk regions. Russia will return to Ukraine the entire Kherson region and Zaporijia, including the Zaporijia plant and Enerhodar. Ukraine will have control over a 100km demilitarized zone along the Dnipro River to the Black Sea. Crimea will be a demilitarized territory under dual control, Russian and Ukrainian. Ukraine must commit not to cut off the water supply to Crimea. Ukraine must introduce a neutrality status in its constitution and commit not to join a new alliance; it must enshrine in its constitution the status of its armed as “peacetime armed forces,” with no more than 350,000 troops (150,000 in the Russian version); its armament will be limited by treaties (it must have no more than 125 aircraft). It will have to return to the treaty limiting long- and medium-range missiles. Russia raises no objection to Ukraine joining the European Union. The negotiations must involve Russia, Ukraine, the EU, China, and the United States. A ceasefire will occur at the start of these negotiations. The West will lift sanctions on technology transfers, the financial sector, and the gas and oil sector.
This time, the trap would be baited with tempting pieces of cheese: the return of two regions already annexed under the Russian constitution, the ambiguous status of demilitarized Crimea; the generous permission to join the EU, while in 2014, the mere proposal of a cooperation agreement with the EU caused an uproar in Moscow.
The plan is reinforced by the deployment of Moscow’s obedient pawn, Viktor Orban, who presides over the European Union and, behind the EU’s back, catapults himself as a “mediator” and embarks on a tour from Kyiv to Moscow, Beijing, and Mar-a-Lago (Donald Trump’s Florida residence). The aim of the maneuver is to exert pressure on the Europeans and bring them to join the Trump-Xi-Orban trio to force Ukraine into capitulation in line with Putin’s terms ; otherwise Europe is threatened with having to bear the financial burden of supporting Ukraine alone. After meeting with Putin on July 5, Orban sent a letter to Charles Michel, relaying the Kremlin’s message that time is running out for Ukraine and announcing a bloodbath if Ukraine continues to resist. In short, the EU should push Ukraine to agree to a ceasefire on Putin’s terms. In Europe, Orban’s dubious game has sparked a wave of disapproval. Charles Michel has said that he “completely disagrees” with Orban’s approach.
On July 11, Orban met Trump to “discuss ways to make peace” in Ukraine. He radiated optimism after the visit: “The good news of the day: he will solve the problem.” Indeed, the plan is simple: force Ukraine to cede the territories coveted by Russia by stopping the supply of weapons. Thus, thanks to Orban, Trump can already implement a parallel foreign policy in the United States, which heavily influences the EU and Ukraine — even before he is elected ! This shows how long the Kremlin’s reach is in our democracies, and how paralyzed they are by such impudence.
At the same time, the Kremlin has been activating its relays. A series of Russophile personalities, former ambassadors to Moscow and so-called experts, signed an op-ed in the Financial Times with the headline “Seize peace in Ukraine before it’s too late,” with this main message : territorial concessions are a “negligible price to pay” for Ukraine’s independence. And it is up to the United States to force Ukraine to “negotiate.”
As always with Putin, the carrot is accompanied by the stick: on July 8, Russia launched a savage bombardment of Ukraine, commented on the site of Tsargrad, the patriotic channel of oligarch Malofeyev: “The children’s hospital in Kyiv is no accident. It’s time to admit it […] Humanitarian considerations only benefit the enemy. Those who pity the enemy’s children do not pity their own. (…) We must realize a simple and frightening thing: there is no one on the other side. Not a single human being. Our missiles do not kill people. There is no one there. (…) We do not need to justify bombing a children’s hospital. We must say: if you want it to stop, surrender. Surrender. Then we might spare you.” The goal is not only to break the will of Ukrainians to resist but also to discourage the West from continuing their deliveries to Ukraine since Russia can “crush them like bugs,” according to the favorite expression of Kremlin propagandists.
Why this haste from Moscow if time is on Russia’s side? In fact, Russia is in a hurry because it is facing multiple difficulties that have a cumulative effect. In 2022, the West (including yours truly) was overly optimistic, expecting sanctions to quickly bring Putin’s Russia to its knees. It did not happen. In hindsight, it is possible to understand the three factors that have kept the Russian economy afloat. The first is the regime’s long preparation for Western retaliation measures. The second lies in the very nature of the Putinist state, poorly understood by the West, which acted to sanction it as if it functioned like ordinary states. Yet the Putinist state is an aggregate of mafia clans, accustomed to operating illegally for over 20 years. Russian oligarchs were well-versed in bypass circuits, offshore financing, “parallel imports,” and illicit exports long before sanctions were implemented. The third factor is the resourcefulness of Russian citizens inherited from the Soviet era: they have learned for decades to procure scarce goods through countless workarounds. The sanctions have revived these poorly forgotten traits of the homo sovieticus, as well as their infinite capacity to elude the encroachments of an increasingly intrusive state. But in the long run, these factors are not sufficient to prevent the accelerated regression of the Russian economy. Moreover, the West has also learned a lot, and the sanctions are increasingly targeted.
Despite official bravado and the disinformation campaign launched in the West, aimed at persuading our decision makers that the Russian economy is unsinkable, that war production can still be maintained indefinitely at this level for a long time, etc., Russian leaders are increasingly unable to hide the precariousness of their economy. The reserves accumulated during the prosperous years are running out. The Russian government is reduced to squeezing its own population. It has just introduced a progressive income tax. Levies are mushrooming: a divorce tax, a tourism tax, etc. According to Konstantin Samoilov, a Russian entrepreneur living in exile in Uzbekistan, labor shortages are desperate. One million IT jobs are unfilled, 1.6 million positions are vacant in the military-industrial complex, even though it has recruited 520,000 employees over the past two years. There are 152,000 police officers, 92,000 doctors, and medical staff missing. The Academy of Sciences estimates that the economy needs 4.8 million workers. On top of that the depopulation process of Russia is accelerating: in January-February 2024, it lost 226,000 residents, 40,000 more than in 2023. Alcohol consumption among Russians has resumed with a vengeance. Young people are turning once again to hard liquor. Mortality is increasing, and life expectancy is stagnating or even decreasing.
All this prompts the Russian government to pursue a policy of mass immigration. Some 700,000 Russian passports are issued each year (170,000 to Tajiks in 2023). Two million Uzbeks came to work in Russia in 2023. Immigration statistics are now classified. However, Alexander Bastrykin, the head of the Investigative Committee of the Russian Federation, recently gave figures, echoed by nationalist Dmitry Dyomushkin. Some 1,200,000 migrants arrived in Moscow in the first four months of this year and 800,000 in the Moscow region, 4 million for the whole of Russia (but Bastrykin did not provide figures for those who had left Russia).
This policy is causing growing unrest in Russian society. The residents of the Moscow suburbs say they are exasperated by the influx of migrants and the laxity of the authorities. Central Asian migrants receive Russian citizenship in three months (30,000 of them, after obtaining a Russian passport, were caught and sent to the front), while repatriated Russians have to wait for years. Russians are outraged that it is the poorest, the most destitute, and the least qualified citizens of Central Asia who end up in Russia: those who are not wanted in their own countries. The most qualified go to Dubai, while Central Asian doctors employed in Russian clinics do not speak Russian and use Google for their diagnoses. To cap it all, it is known that Palestinian refugees receive 36,000 rubles a month, twice the average pension in Russia.
Things have gone so far that the siloviki are stepping up. Interior Minister Kolokoltsev claims that hatred of migrants could lead to the collapse of the Russian state. Alexander Bastrykin said: “While our men fight on the front, migrants sow chaos at the rear.” Mass immigration is a threat to national security, they assert. Radicals expelled by the authorities of the Central Asian republics find refuge in Russia. Serious crimes committed by migrants increased by 32% in 2023. Islamic banks have been opened in Tatarstan. Enclaves populated by migrants from Central Asia are multiplying in the heart of Russia. There are hundreds of clandestine mosques in Moscow and its region.
In short, the issue of mass immigration is becoming potentially explosive in Russia, even if the siloviki, always cautious, merely blame the Duma, while Bastrykin suggests developing internal immigration, attracting provincials to cities like in Soviet times, a solution that is obviously not credible given the advanced depopulation of Russian provinces. A growing number of Russians blame President Putin because he seems to favor the “great replacement theory” (the term is now used in Russia) by sending Russians to be killed in his major offensives along the Ukrainian front, while he recently declared: “We are not against the increase in the Muslim population, on the contrary, we welcome it. Our Muslim republics have a very good birth rate, and we are pleased with that.” Dmitry Dyomushkin’s posts, mentioned earlier, show how reflections on the causes of immigration can have devastating consequences for the regime. Dyomushkin mentions several of them. First, corruption: thus, the Ministry of Construction is asking for hundreds of thousands of underpaid workers to carry out lucrative projects. Another cause, according to Dyomushkin: the backwardness of Russian industry and agriculture, their low productivity. Russia still uses German machine tools dating from 1945. The break with the West has only made things worse by exacerbating Russia’s underdevelopment. Kremlin leaders may boast about Russian sovereignty but the country has become even more dependent on foreign countries. Dyomushkin concludes that a great power policy cannot be pursued with an economy based on resource exploitation. Isolationism has never built an economy, concludes this hardline Russian nationalist.
Another potentially revolutionary phenomenon has been occurring since the botched mobilization of autumn 2022. Russia, which throughout its history has treated its soldiers as cannon fodder, both inexhaustible and almost free, is now forced to pay its soldiers, and even pay them handsomely. Yet these men theoretically gathered under the flags at a high price continue to be treated by most of their officers in the Soviet manner, like cattle easily replaced. This results in strong tensions, which explode when former mercenaries return to civilian life, theoretically privileged but hated and feared by those at the rear. Machiavelli has warned the Prince of the danger of enlisting mercenaries, and the Prigozhin affair only confirmed his sagacity: “The prince whose power relies only on mercenary troops will never be secure or peaceful; for such troops are disunited, ambitious, undisciplined, treacherous, bold against friends, cowardly against enemies; and they have neither fear of God nor loyalty to men. […] Mercenary captains are either good warriors or not: if they are, they cannot be trusted, for they seek only their own greatness, oppressing either the prince who employs them or others against his will; if they are not, the one who employs them is soon ruined.”1 This Russian mercenary system finds its limits. Regions, one after another, increase the amount for signing a contract, indicating that candidates are not flocking to recruitment offices. In some regions, a “Sponsor a friend and get a reward” program has even been launched. Volunteers are scarce, and the government will have to return to mobilization, with all the implications this will have on the labor market and the economy.
Indeed, the labor shortage inflates wages, which fuels inflation, another potentially destabilizing factor for the Russian regime. Certainly, foreign currencies are flowing in, but it is becoming impossible to finance imports from China, as Chinese banks avoid transactions with their Russian clients for fear of American sanctions. Recent data shows that 85% of Russian-Chinese transactions fail due to lack of financing. Moreover, China exploits its monopoly position in the Russian market: the price of imports from China has doubled or even tripled since the start of the war. Blogger Vladislav Zhukovsky has devoted several podcasts to inflation, showing that prices are spiraling out of control. In the last week of June, it tripled, reaching 0.66%, or more than 9% per year. The price of potatoes has increased by 91% since the beginning of the year, flour by 30%. In 2024, basic commodities have increased by 34%. On July 1, the price of gas increased by 11%. Mortgage subsidies have been removed. The cost of medical care has increased by 11.5% in 2024, medications by 13% since February. The price of gasoline has doubled. Train fares have increased by 37% in a year, air fares by 27% and more. Given the inflation, pensions have been falling since October 2023. Contracts with the Ministry of Defense are an indicator of inflation. They already offer more than 1.5 million rubles in some regions. The population is increasingly in debt, despite prohibitive interest rates. Mortgages have become inaccessible.
To this must be added the deterioration of infrastructure. During the winter many localities were left without heating. In July, 600,000 residents were without electricity (and therefore running water) in southern Russia for weeks when temperatures reached 50°C (122°F). Some 70,000 elevators are outdated. Aircraft are falling from the sky, and massive traffic jams paralyze the Trans-Siberian Railway.
It may be that Putin pays little attention to the clouds gathering on the horizon. He is sure to win when Trump is in the White House. But one might think that the siloviki around him see things differently. They understand that the “pivot to China” was a colossal mistake. Putin’s last visit to Beijing was humiliating for the Russian dictator. The Chinese, not satisfied with refusing to finance a new gas pipeline, demand that Siberian gas be sold at Russian domestic market price. What a contrast between these tough Chinese negotiators and the accommodating Europeans who refused nothing to the Moscow autocrat. The pivot to India is even less satisfying: Russia is full of rupees it can hardly use. Above all, the siloviki compare the successes of the first Putin decade with the setbacks caused by the military offensive against Ukraine. Here again, the contrast is striking: while the policy of subversion of Western countries has been a success, whose fruits are now in full sight with the pro-Russian far-right wave sweeping across Europe, armed confrontation and nuclear bluff have proven to be a costly fiasco and a quagmire from which Russia must extricate itself as quickly as possible to return to the infinitely more profitable policy of subversion and infiltration of Western democracies. Why worry about the government in Kyiv if the possibility of installing pro-Russian governments in France and Germany and blowing up the EU from within now seems within reach? The more promising the prospects in Europe, the more urgent it becomes to end armed confrontation in Ukraine. Economically, Russia is now desperate. Its priority is to quickly obtain the lifting of sanctions while carrying out its project of subjugating all of Ukraine.
Again, Viktor Orban, Moscow’s Trojan horse (who presides over the European Union for six months), hints at how the Kremlin intends to achieve its goals. Thanks to him, Russia has just acquired a wrecking ball at the heart of the EU : Viktor Orban took the initiative to associate his party, Fidesz, with the Austrian far-right FPÖ and the Czech populist liberals ANO of former Czech Prime Minister Andrej Babis. This group is called Patriots for Europe. It has been joined by RN deputies, and Jordan Bardella has been appointed president. The group has 84 MEPs, including the 30 elected from RN. It becomes the third-largest group in the European Parliament. The program includes opposition to military support for Ukraine, fighting “illegal immigration,” and support for the “traditional family.” Orban advocates “a European Union composed of independent nation-states and not […] a federation dominated by Brussels.”
This context explains Moscow’s renewed efforts to convince the West to force Ukraine to accept an amputation of its territory in exchange for an armistice. Moscow is counting on the demoralization of Ukraine in the face of NATO’s dithering. In April, when NATO Secretary General Stoltenberg declared that it was up to Ukraine to decide what territorial concessions it could make, Ukrainian journalist Dmitro Gordon pinned down Western cynicism: the West prevents Ukrainians from fighting by stopping arms deliveries, while hypocritically declaring that it is up to Ukrainians to see what sacrifices they can make for peace. In Kyiv, they already had a taste of Trump’s plan.
Westerners in favor of an agreement pretend to believe that, after all, a territorial sacrifice would be a small price to pay to save the rest of Ukraine. This ignores the implications of Moscow’s other demands: a disarmed Ukraine, having given up joining NATO, or better yet, banned from alliances; the lifting of sanctions against Russia. No question of reparations in the Russian project, nor trials of Russian war criminals. It is clear that the fate of the remaining part of Ukraine is predetermined. On the other hand, Russia generously allows Ukraine to join the European Union. The latter point is revealing: the Kremlin is now certain it can subjugate Europe thanks to the political decay of liberal democracies, which it has been working on for decades by pushing forward the extremes of the left and right.
As often, Medvedev loudly reveals the twisted plans hatched in Moscow: “A change of scenery in the United States can prompt the corrupt Ukrainian elite to resign itself to starting negotiations, taking a break in military operations. The question is: Can Russia take advantage of this? I don’t think so. Our country has repeatedly declared, on various occasions, that it is prepared to resume negotiations only on its own terms. They are simple — recognition of the results of the special military operation enshrined in the Constitution of Russia, and refusal to accept the ex-Ukraine’s entry into NATO. If this happens, a new third bloody Maidan will quickly begin in Kyiv, sweeping away the current junta and bringing an even more radical junta to power… So, paradoxically, conditions conducive to negotiations, or even capitulation, may arise. It will be much more difficult for the Western Alliance to help certified extremists. The West will have to publicly admit that hundreds of billions of their taxpayers’ money have been wasted. And the United States and its accomplices will force the Kyiv Nazis to recognize the results of the war. The ruling clique, led by a rag clown, will flee to the West or be torn to pieces by the crowd. On the ruins of the preserved part of the ex-Ukraine, a moderate political regime will be established. But that will not mean the end of Russian military operations. Even after signing the papers and accepting defeat, the remaining radicals, having regrouped, will sooner or later return to power, inspired by the Western enemies of Russia. It will then be time to crush the beast, drive a long steel nail into the coffin of the quasi-Bandera state, destroy the remnants of its bloody legacy, and return the remaining lands to Russia.”
As we can see, the Russians have not given up on their initial objectives. It would be unfortunate if the West fell for their schemes while the Moscow autocracy itself is on its last legs, and it would take just a bit of firmness, clarity, and will on the part of the West to get rid of a regime that poisons the international atmosphere and the political life of our nations to a degree that will be measurable the day this regime disappears. In particular, it would be urgent to make Kremlin leaders understand that sanctions will remain in place until the occupied territories in Ukraine are evacuated by the Russians. Will we falter at the last minute, once again saving the Kremlin autocrat in extremis by delivering a new prey to him? Will it be said of us, as Demosthenes said of the Greeks, that we have “abandoned everything, not by chance, nor by complacency, nor by ignorance, but by discouragement, believing everything to be hopeless”2?
She has a degree in classical literature and spent 4 years in the USSR from 1973 to 1978. She is an agrégée in Russian and teaches Soviet history and international relations at Paris Sorbonne.
