[ad_1]
Vladimir Putin needs petrodollars, and he needs them right now. Many analysts expected the Russian president to formally declare a state of war with Ukraine, a move that would allow Russia to fully mobilize its reserve forces.
But although Putin may want to send more troops Russiane in Ukraine, he does not canesi ta beje kete. Will the embargo just force it–revealed everywhereer oiles Russian from the European Union, qe to givee end wares? currentlyThe Kremlin has softened it moreehis propaganda.
Now he is not talking me ABOUT invasion of Kiev. Apparently the intent Putin’s only’s powerimi i regiont east of the Donbas. But even there, Putin does not e ka te secure victoryenafter Ukraine has launched the so-called Joint Forces Operation, qe includes its most trained military units, AND increasingly armed with advanced military equipment Western.
Ndes sanctuary Russia has lost much of its modern military equipment, and sanctions and strong western have it bere unable to rechargee its reserves. with moree few options nedisposoftionRussia po throws ne battlee tanks e old te Soviet era.
Methe only way see Putinof can tor compensate for the lack of equipment ne ground, it’s nepermit remitimit te more soldierswidower. But inclusion ne LUFT-e e young recruits, is an unpopular idea ne people, therefore Putin po paguan pay people to fight for Russia.
It is said that currently rekrutët GIVEN 3000-5000 dollars per month. But the latest decision to remove the age limit for army recruits, suggests that even the prospects for it gete aesalary that is higher thanhow average salary ne Russiano is attracting enough fighters.
Budget data recently published by Ministria ruse e FInanc, suggest se Putin not can afford moree DURINGe the rising costs of war. Se pari, tthe data confirm that war has been expensive. Shmilitary penalties have increased by almost 130 per sed last month, at 630 billion rubles ($ 10.2 billion), or 6 per sed of annual GDP on a proportionate basis.
The data also show that Russia had ne APRIL a fiscal deficit of more than 260 billion rublesshor 2.5 per sed of GDP se ratioed with annual figures. While global oil prices are very high, Russia sells its oil at a discount landing big – $ 70 a barrel for Ural crude oils last weeks, 30 per sed below market price – ne ae timee qe total output is expected to decline this year me 10 per sed.
Meanwhile, revenue other peApartWhat hydrocarbonswidower have fallen, running bere qe oil and gas taxes amount to more than 60 per sed of fiscal revenues, compared to less than 40 per sed one year ago. Putin’s dependence on petrodollars stands for then that declaring an embargo ABOUT about 90 per sed of Russian oil imports within the next 6-8 months, the European Union yes e hits Russia where it hurts verts.
Tashma is e sure that Putin will face a major fiscal crisis within a year, making it difficult continuation of his war in Ukraine, without speaking per canesine e fluffimit te ndoae PLACE other. By pthe problem is that the embargo will help Putin in ae periode short-term.
ownem the news of proclamationes se HIS, has already caused oil prices to rise. This is why Europe should tor fulfill its embargo on PETROLEUM Russian with additional and immediate measures. Ne kete rast spikasin 2 options. First – proposed by the economist Ricardo Hausmann immediately after the invasion Russianand that others have shown can be applied with FASTeif – is a high tariff on Russian oil imports.
This approach has moree SENSE from the point of view eCONOMICe. Every euro spent on Russian oil,helps Putin fund LUFT-ein him in Ukraine. Therefore nis part of the amount paid by buyers of Russian hydrocarbons, should be transferred to Ukraine as compensation, or stored in ae ACCOUNT BANKING special, until Russia t‘i demGSerbleje officially Ukraineenperdemet caused by the war.
But at a time when European households are facing high energy costs, POLITICIANet are note te interested te decide a tax te cloud over oilen. Perkete reasonthe Prime Minister Italian Mario Draghi has proposed an alternative solution:setting of a limitnew on PRICEne nates.
According to this proposal – which the European Council has instructed the Commission to assess – Western countries will pay a lower price for Russian oil and gas, and will impose secondary sanctions on third parties who pay more.
it measuree do te applies immediately – say, in nofthe veil $ 70 a barrel – and WILL to decrease by about $ 10 every month that goes on war. Eise evertse, qe Putin may refuse to sell oiln at this price. But, given that he is already quite desperate for t‘sold to China and India with landing to morfeand fact qe today’s energy prices offar exceed production costs, this there does not seem to be muche te symbolic acte te It happense.
Perkundrazimaybe Russia would continue to supply oil and gas to Western buyers at the limited price, while buyers like China and India, under threat of sanctions, would have no reason to payMoM more. This will te secure relief per customerst from high energy prices, and will significantly reduced te Russia’s income.
Some may pretendojne sand price constraints distort incentives, in this case, urgeenfor her launched widespread usee te resourceswidower renewable. But this argument only applies to a competitive market. In today’s oil and gas market, prices of far exceed costs and the global oil cartel OPEC + (qe It includes ALSO Russia)kane rene agreed only times The last qe to increasein production in July and August.
Large Russian company e gas, Gazprom, likely to kete cheated on prices in Europe even before the war. Such monopolistic behavior guarantees a limitzim te PRICEt. Another argument qe found often against a boundary ABOUT PRICEn, is that he can promote flowering of marketut black.
And this one is a real danger. Kcompanies POWER European have begun alreadye to combine Russian petroleum products with other – one “Latvian mixture” – to take advantage of lower prices, while claiming that e do not support officially makinerinePutin’s fighters.
Ne fact THESE company they are not breaking any law. If you will moving a kufi on PRICEn e naftes, it would be implemented. Given public outrage ndaj warsse Russiae neUkraineethe West ‘s commitment to secondary sanctionsbut also increasing investigations by supported citizens to open source te intelligenceswould be very difficult, in not impossible, trespassor of ae rule te such pa u ndegoing.Embargo qe has decided se most recently the EU against Russian oil will hurt Putin, but this will not te It happense very soon. THEREFORE Europe must set a border immediately ABOUT PRICEne oils and gast rus.
Shenim: Sergei Guriev, former chief economist of the European Bank for Reconstruction and Development(BERZH). currently is Professor of Economics at university Sciences Po ne Paris./bota.al
top channel
[ad_2]
Source link