# ANALYSIS: Eighty Billion in Deficit: The Deadly Arithmetic of Putin's War

> On June 23, 2026, United24 Media reported that Russia's budget deficit had exceeded 80 billion dollars, despite Kremlin declarations of stability. This figure is not a triumphant announcement from Moscow's finance ministry — it is a reality that accounting data always ends up revealing, even when authoritarian regimes seek to conceal it. Putin's Russia spends far more than it e

- Author: Maxime Marquette
- Publisher: MadMax (https://mad-max.co)
- Section: Analysis
- Published: 2026-06-28
- Canonical URL: https://mad-max.co/en/article/analyse-quatre-vingts-milliards-de-deficit-l-arithmetique-mortelle-de-la-guerre

## Key takeaways

- Russia's budget deficit reportedly exceeded 80 billion dollars, while Bloomberg reported plans to add 4 to 5 trillion rubles in military spending in 2026.
- Falling energy revenues under sanctions and rising military costs drive the deficit, and regional governments reportedly face debt pressure.
- Government bond yields reached about 15%, and the Kiel Institute describes "structural exhaustion," with Q1 2026 GDP contracting 0.2%.
- The Economist is quoted as saying Russia's war economy "has problems but is not about to crash," and the author expects a slow degradation rather than a sudden collapse.
- The author argues that sanctions, including the proposed 21st EU package, Baltic pressure for an oil embargo, and Ukrainian adviser claims of a "dead end," should be maintained to accelerate this pressure.

## Introduction: the ruble facing reality

### A figure the Kremlin does not speak aloud

On **June 23, 2026**, **United24 Media** reported that Russia's budget deficit had exceeded **80 billion dollars**, despite **Kremlin** declarations of stability. This figure is not a triumphant announcement from **Moscow**'s finance ministry — it is a reality that accounting data always ends up revealing, even when authoritarian regimes seek to conceal it. **Putin**'s **Russia** spends far more than it earns to finance its war in **Ukraine**, and the gap is widening at a pace that even oil revenues can no longer fill.

Simultaneously, **Bloomberg** reported on **June 23, 2026** that **Russia** was planning to increase its war spending by **four to five trillion additional rubles** in **2026** — an unprecedented scale of military budget increase even by wartime standards. These two pieces of information, a growing deficit and rising military spending, compose a particularly revealing arithmetic: **Russia** is borrowing to fight, and it is intensifying the military effort precisely as its financial position deteriorates.

### The war economy as a strategy of political survival

To understand **Putin**'s budgetary choices, one must read them not as rational economic decisions but as political survival decisions. The war in **Ukraine** is not merely an imperial adventure — it is also an instrument of domestic political control, a national mobilization that justifies the sacrifices imposed on the Russian population and concentrates attention on the external enemy. Ceasing to fund the war would amount to admitting failure — a politically lethal option for a leader whose legitimacy rests on the promise of restored greatness.

This is why **Putin** will continue to fund the war even when economic logic would argue for stopping. The arithmetic of the deficit will not necessarily compel him to negotiate — he will first seek to tap other resources, constrain the central bank, borrow on domestic markets, cut social spending. This is not an economy that adjusts its military spending to match its revenues: it is an economy where military spending is the fixed variable around which everything else must adapt.

*An 80-billion deficit. To put it in perspective: that is the equivalent of Slovakia's entire annual GDP, swallowed into a budgetary hole. And Putin is adding 4–5 trillion rubles of additional military spending on top. This is not economics — it is budgetary blindness in service of a conquest obsession.*

## The anatomy of Russia's deficit

### Falling oil revenues, rising military spending

Russia's budget deficit of more than **80 billion dollars** results from a simultaneous compression of revenues and an explosion of expenditures. On the revenue side, Western sanctions on Russian oil and gas exports have reduced earnings from the energy sector — traditionally the main source of Russian state financing. The **European Union**'s sanctions, extended for an additional year through **2027** according to **Euromaidan Press** on **June 26, 2026**, maintain continuous pressure on Russian energy exports.

On the spending side, military costs have exploded. Maintaining, equipping, paying, and treating the wounded of an army engaged in a conflict of this intensity costs hundreds of billions of rubles per month. Recruitment bonuses, increased to compensate for heavy losses and attract new soldiers, alone represent tens of billions. Real-time equipment modernization, replacement of material losses, accelerated ammunition production — all of this translates into budget deficits that accumulate month after month.

### Regional Russian debt as a warning signal

The Russian federal budget deficit is one thing. The debts of Russian regions are another, perhaps even more revealing of the tensions the war creates on the economic and social fabric of the country. According to information relayed on **June 22, 2026**, Russian regions are drowning in debt because of the war. These regions, which have their own tax resources but also depend on federal transfers, find themselves in difficulty because the federal government, to finance the war, is reducing these transfers while imposing additional costs — treating wounded soldiers, supporting families of killed soldiers, economic reconversion related to sanctions.

This pressure on the regions is particularly significant because it directly affects the daily lives of Russian citizens: degrading infrastructure, reduced public services, delays in social payments. These regional pressures constitute a factor of potential discontent that **Putin**'s regime must manage carefully to prevent dissatisfaction from becoming a political force.

*Russian regions going into debt while Moscow finances the war: this is precisely what economists call "crowding out" — the displacement of productive public spending by military spending. This mechanism contributed to the fall of the USSR. Putin knows it, and he cannot stop it.*

## The 4–5 trillion additional rubles: a very high-stakes gamble

### What this sum concretely represents

Four to five trillion additional rubles — at the exchange rate of summer **2026**, approximately **40 to 50 billion dollars** of additional military spending for the year. To put this in perspective: it is roughly the total annual defense budget of **Spain** or **Poland**. Added to Russia's already massive military spending — estimated at approximately **6 to 7%** of **GDP** before this supplement — this increase brings the Russian war effort to levels not seen since the **Cold War**.

This budgetary choice reveals a fundamental strategic decision by **Putin**: he is playing the long-war card, betting on his superior economic endurance over the **West**. If Western democracies tire of supporting **Ukraine** before the Russian economy capitulates, **Putin** can hope to win through exhaustion what he cannot win militarily. This strategy of endurance is all the more plausible for resting on political control regimes more tolerant of economic sacrifice than liberal democracies.

### Russian government bonds in free fall

The reaction of Russian financial markets to the plans to increase war spending is telling. According to information from the Russian press on **June 22, 2026**, **Russian government bonds** fell following the announcement of military budget increase plans, with yields reaching approximately **15%**. This yield level is extremely high and reflects a significant risk premium that investors demand to hold Russian public debt.

Yields at **15%** on sovereign bonds signal that markets judge the default risk to be significant, or at the very least that future inflation will be high enough to erode the real value of these bonds. For the Russian government, financing the deficit at such high rates is extremely costly: interest charges accumulate, creating a vicious cycle in which today's debt ends up financing yesterday's interest rather than tomorrow's investments.

*Sovereign bonds yielding 15%: this is the signal from a market that no longer trusts the Russian state's long-term solvency. This is not a truth that Kremlin propaganda can hide indefinitely. Markets have a brutal way of imposing reality even on dictatorships.*

## The Kiel Institute and the diagnosis of "structural exhaustion"

### A term that says everything that needs to be said

The **Kiel Institute**, one of Europe's most respected and widely cited economic institutes, introduced into its analysis of the Russian economy the concept of "**structural exhaustion**." This term is not trivial: it describes an economy that is not merely facing correctable cyclical difficulties, but suffering from a degradation of its very fundamentals — human capital, productive investment, industrial fabric — under the prolonged effects of war and sanctions.

Macroeconomic data confirm this diagnosis. Russia's **GDP** in the first quarter of **2026** contracted by **0.2%** according to data cited by the **Foreign Affairs Forum** on **June 23, 2026**, and the **IMF** revised its annual growth forecast down to **0.8%**. These figures, which may seem modest in absolute value, represent a significant deterioration in the context of a war economy supposedly overheating from military spending. They reveal an economy that consumes its capital without renewing it.

### The false signals of military-driven growth

The Russian economy posted positive growth rates during the early years of the war, primarily thanks to the explosion in military spending that stimulated industrial production in the defense sectors. This phenomenon had led some analysts to relativize the impact of sanctions and to speak of the "resilience" of the Russian economy. The **Kiel Institute** and **The Economist** of **June 22, 2026** bring an essential nuance: this growth was largely artificial, fueled by non-productive military spending that consumed the country's economic capital without creating lasting wealth.

The comparison with historical war economies is instructive. The **USSR** maintained an appearance of economic power until very late in the **1980s**, thanks to misleading statistics and intensive mobilization of resources in the military industry. But beneath the surface, the fundamentals were deteriorating: consumption of physical capital without replacement, innovation deficits in civilian sectors, depletion of natural resources with little replacement. **Putin**'s **Russia** is following a similar trajectory.

*"Structural exhaustion" of the Russian economy: this term from the Kiel Institute is what I would call an honest diagnosis. Not a victory cry ("the Russian economy is collapsing!") nor a condescending relativization ("Putin has the means to hold on"). Reality is between the two: slow degradation, without immediate collapse, but without any exit.*

## The Economist and the nuanced verdict

### "Problems but no crash": unpacking a formula

**The Economist** of **June 22, 2026** offered a particularly balanced analysis of the Russian war economy with its headline: "Russia's war economy has problems but is not about to crash." This nuance is important and intellectually honest. Claiming that the Russian economy will collapse in the short term would probably be inaccurate — **Russia** still has reserves, non-negligible hydrocarbon revenues (even reduced by sanctions), and a state willing to exercise economic repression on the population to maintain the war effort.

But "not about to crash" does not mean "doing well." The **West** that waits for a spectacular Russian economic collapse before changing strategy risks waiting a long time. The degradation is real and cumulative, but it is slow. What should guide Western policy is not the wait for a miraculous collapse, but the pursuit of long-term pressure — maintained and reinforced sanctions, continued support for **Ukraine** — that accelerates this degradation without anyone being able to expect immediate spectacular results.

### Duration as a strategic factor

The real strategic question posed by the economic analysis is not "will the Russian economy collapse?" but "**who will hold out the longest?**" **Russia** can prolong its capacity for war for years yet, accepting progressive deterioration in living standards, growing macroeconomic imbalances, and the exhaustion of human capital. The **West** can support **Ukraine** indefinitely — if the political will is there — without enduring the same economic pressures.

But "political will" is precisely the uncertain variable. If Western democracies tire of supporting **Ukraine** before the Russian economic degradation compels **Putin** to negotiate, the Russian endurance strategy will have worked. This is **Putin**'s bet: not to win militarily, but to survive economically until the Western coalition fragments under the pressures of its own public opinion.

*Duration is Putin's strategic weapon. He has forty years of power experience, no electoral constraints, and a population conditioned to economic sacrifice by decades of authoritarianism. Facing him are democracies with four-year electoral cycles and public opinions that grow impatient. Patience is a weapon, and Putin has more of it than we do.*

## Western sanctions: effective, insufficient, necessary

### The 21st European package and its implications

On **June 27, 2026**, the Finnish press reported that the **European Union** was proposing a **21st sanctions package** against **Russia**. This figure — twenty-one successive packages since **2022** — illustrates both the persistence of Western economic pressure efforts and the limits of their immediate effectiveness. If twenty packages have not compelled **Putin** to negotiate, why would the twenty-first?

The honest answer is that sanctions have a cumulative and delayed effect. Each additional package closes new circumvention routes, expands the perimeter of sanctioned actors, and makes it more difficult for **Russia** to access the technologies, components, and financing its war economy needs. The effect is not immediate, but it is real. **Euromaidan Press** on **June 26, 2026** noted that the **EU** was maintaining its "complete economic wall" against **Russia** through **2027**, covering trade, banking, energy, and cryptocurrencies.

### The Baltic oil embargo push and the pressure on Moscow

The **Baltic states** are actively pushing for an acceleration and reinforcement of the oil embargo on **Russia**. The **Kyiv Post** of **June 27, 2026** reported their pressure on the **EU** to tighten restrictions. These countries, which understand better than anyone the strategic importance of depriving **Moscow** of its oil revenues, see energy as **Russia**'s economic Achilles' heel. Oil revenues directly finance the war — cutting those revenues means starving the Russian war machine at source.

But a complete oil embargo remains politically difficult inside the **EU**. Some member states, notably **Hungary**, have structural dependencies on Russian hydrocarbons and have blocked or slowed more drastic measures. This internal **EU** fragmentation is one of the most serious limitations of Western sanctions policy — and one of **Putin**'s most precious resources.

*Twenty-one sanctions packages in four years: Europe has made a considerable effort. But Orbán's Hungary remains inside the Union and regularly blocks the most constraining measures. This paradox — sanctioning Russia while letting Budapest serve as a sieve — is one of the most uncomfortable contradictions in current European policy.*

## Zelensky's adviser and the Russian economic "dead end"

### A diagnosis from Kyiv

On **June 26, 2026**, **Zelensky**'s sanctions adviser declared that the Russian economy had reached a **"dead end"** — a term that suggests not a collapse but an inability to generate the growth and resources needed to sustain the war effort indefinitely. This assessment from **Kyiv** is consistent with analyses from the **Kiel Institute** and **The Economist**: no spectacular collapse, but structural degradation that progressively reduces the regime's economic room to maneuver.

The term "**dead end**" is strategically significant. It suggests that economic pressure has reached a level where **Russia** can no longer navigate freely among its options: it cannot simultaneously maintain the military effort, preserve domestic consumption, invest in economic modernization, and manage the budget deficit. It must make painful choices. So far, **Putin** has always chosen the military effort — at the expense of everything else.

### What "dead end" does not mean

Intellectual honesty requires clarifying what this economic "**dead end**" does not mean. It does not mean that **Russia** is incapable of continuing the war tomorrow or in six months. It does not mean that **Putin** will negotiate because his economy suffers — he can impose further suffering on his population before contemplating that option. It does not mean that sanctions have definitively "won": the effects of long-term economic pressure are cumulative and non-linear.

What "**dead end**" means is that current economic trajectories are not sustainable over the horizon of several years. **Russia** is burning its future to hold its present — a metaphorical but precise expression of what is happening. It is drawing on its sovereign fund, underinvesting in its physical and human capital, and accumulating macroeconomic imbalances that will be paid back with compound interest once the war ends.

*"Russia's economy has reached a dead end" — this diagnosis from Zelensky's adviser should not be read as an imminent victory. It is an indicator that the pressure strategy is working slowly. "Slowly" is the key word. Western patience is as much a weapon as 155mm shells.*

## Inflation as a hidden tax on the Russian population

### Deficit monetization and its consequences

Facing a budget deficit exceeding **80 billion dollars**, the Russian government has several options: cut non-military spending, raise taxes, borrow on markets, or monetize the deficit — that is, finance it by creating money. The first options have obvious political limits. The last — monetization — is inflationary.

**Inflation** in **Russia** has reached significant levels since **2022**, eating into the population's purchasing power despite the bonuses paid to soldiers' families and wage increases in certain sectors. This inflation is a form of hidden tax: it redistributes wealth from ordinary households to the state by eroding the value of savings and real wages. This is a resource that authoritarian regimes classically use to finance wars without directly increasing visible taxation.

### The effects on real living standards

Data on Russian living standards is difficult to obtain reliably — the regime tightly controls official statistics and punishes media that report negative economic information. But available indications — discussions on Russian social networks, testimony from independent journalists in exile, data compiled by researchers like the **Moscow Times** (based outside **Russia**) — suggest a real degradation in living standards, particularly in regions distant from major urban centers.

Imported goods have risen considerably in price because of sanctions and the fall of the ruble against non-Russian foreign currencies. Electronic goods, cars, and some medications have become either unavailable or extremely expensive. This deterioration in consumption is socially and politically significant in a regime that partly based its legitimacy on the improved standard of living of the **2000s** and **2010s**.

*The Russian population is paying the price of Putin's war, often without being fully aware of it thanks to propaganda that presents difficulties as the fault of the hostile West. But economic reality always finds its way through official narratives. The question is how long it will take.*

## The war economy and its sectoral distortions

### The arms sector overheating, the rest in recession

The Russian war economy creates profound sectoral distortions. Armaments factories operate in multiple shifts, with high wages to attract skilled workers. Some defense-linked industrial regions are even experiencing local economic "**overheating**" — full employment, rising wages, sustained commercial activity. This war "**boom**" has been used by Kremlin propagandists to paint a picture of economic dynamism.

But this concentration of resources in the military sector drains other sectors of their skilled workforce and investments. Agriculture, information technology, financial services, healthcare — all suffer from a talent exodus toward armaments factories or the army. This distortion is a form of investment in destruction rather than production, and it undermines the Russian economy's productive capacity over the long term.

### Brain drain as lasting damage

The flow of hundreds of thousands of qualified Russians — engineers, software developers, doctors, entrepreneurs — who have left **Russia** since **2022** is one of the most difficult to quantify but potentially most lasting economic damages of the war. These departures represent a loss of human capital that **Russia** cannot rapidly replace, because training a highly qualified engineer or physician takes years.

This brain drain is compounded by the regime's repressive measures — internet censorship, criminalization of opposition to the war, forced military mobilization — which have pushed many educated Russians to choose exile rather than participation in a system they reject. For the Russian economy of the post-war era, whatever the outcome of the conflict, this loss of human capital will be a heavy mortgage on reconstruction and innovation capacity.

*The Russian engineers coding in Berlin, the doctors practicing in Tbilisi, the entrepreneurs who rebuilt their start-ups in Vilnius — they will not return easily, whatever the political evolution in Russia. The human capital lost may be the most durable sanction that Putin's war inflicts on his own country.*

## Two EU countries opposing entry ban on Russians

### The internal European fracture on individual sanctions

On **June 25, 2026**, Ukrainian **Pravda** in English reported that two **EU** countries oppose the ban on Russian nationals entering the bloc. This information illustrates the complexity of European sanctions policy: even in measures that might seem consensual — limiting the freedom of movement of citizens of a country waging a war of aggression — divergences persist within the Alliance.

The arguments of those opposing this measure have their own logic: collectively penalizing all Russians for their government's decisions they did not choose is morally problematic; Russians who oppose **Putin**'s regime are precisely fleeing to **Europe** and deserve to be welcomed; closing borders pushes Russians toward **China** or other countries less sympathetic to the **West**. These arguments deserve to be taken seriously.

### Sanctions unity as a strategic issue

Whatever one's position on the substance of the Russian visa question, the fragmentation of European sanctions policy is strategically costly. Every exception, every visible dissension within the **EU**, provides Russian propaganda with arguments about the "contradictions" of the Western camp and feeds hope in **Moscow** that the coalition will eventually disintegrate. The coherence of sanctions is therefore a strategic value in itself, independent of the merits of each specific measure.

The reality is that perfect unanimity in an alliance of **27** countries with divergent interests is an illusion. What can be aimed for is a sufficient threshold of cohesion so that cracks remain minor and the collective message to **Moscow** — "we will not let go" — remains credible. Internal tensions are manageable; public and dramatic fractures are not.

*The coherence of European sanctions is a permanent political balancing act. It is imperfect, slow, and frustrating. But it is also remarkable that 27 countries with such divergent economic interests have maintained for more than four years a coordinated economic pressure campaign against Russia. Not recognizing that would be unfair.*

## Historical comparison: the USSR and the war economy

### The parallels with the Soviet collapse

The economic history of the **USSR** in the **1980s** offers troubling parallels with the current Russian situation. The Soviet economy sustained a defense effort representing **15 to 20%** of **GDP** — a burden that strangled civilian innovation, exhausted skilled workers, and created structural imbalances that the **1985–1986** oil price collapse rendered unsustainable. The final result is known: economic, then political, collapse of the **USSR** in **1991**.

**Putin**'s **Russia** is not the **USSR** — its economy is smaller, less planned, more integrated (even partially) into world markets. But the imbalance mechanisms are similar: disproportionate military spending, civilian underinvestment, human capital flight, accumulation of social tensions. The question is not whether the same causes will produce the same effects — history does not repeat exactly — but whether they create a trajectory of serious enough degradation to eventually compel Russian decision-makers to reorient their priorities.

### The differences from the USSR that complicate the analogy

The Soviet analogy has its important limits. **Russia** in **2026** has a significant private sector, access to financial markets through non-sanctioned intermediaries, and an energy base that is still exporting despite restrictions. It also benefits from the discreet economic support of **China** and other countries that have not joined the Western sanctions.

These factors extend Russia's economic resistance capacity compared to the **USSR** and complicate predictions about the timeline of a possible collapse. They do not change the direction of the economic trajectory — toward structural degradation — but they delay its culmination. The **West**'s strategic patience, supported by maintained sanctions and robust support for **Ukraine**, remains the most effective response to this reality.

*I am fascinated by the Soviet analogy, but I distrust my own fascination. Historical analogies are useful as interpretive frameworks, dangerous as predictions. Russia is not the USSR, and Putin is not Brezhnev. But the economic mechanics of a war economy have their own logic that transcends regimes.*

## Medium-term prospects: a trapped economy

### The scenario of prolonged status quo under growing pressure

The most likely medium-term scenario for the Russian economy is that of a **prolonged status quo under growing pressure**. **Russia** continues financing the war by progressively impoverishing non-military sectors, accumulating macroeconomic imbalances, and drawing on its strategic reserves. No spectacular short-term collapse, but a continuous degradation that progressively reduces the regime's room to maneuver.

In this scenario, the most effective Western strategy is armed patience: maintaining sanctions, reinforcing support for **Ukraine**, and waiting for the imbalances to accumulate until they compel a policy change in **Moscow** — whether that change comes from **Putin** himself in a moment of pragmatism, from his entourage calculating that costs exceed benefits, or from social pressure that forces a reorientation of priorities.

### What the 80-billion deficit means for peace

Does the budget deficit of more than **80 billion dollars** mean that **Russia** will soon be compelled to make peace by its economic difficulties? No, not in the short term. But it does mean that each additional month of war aggravates structural imbalances, reduces future options, and further mortgages Russia's economic future. It is a form of pressure that accumulates even if it does not immediately materialize as a political concession.

For **Ukraine** and its allies, this deficit is a strategic resource to exploit: every maintained sanction, every arms delivery that forces **Russia** to spend more to compensate, every Western investment in Ukrainian defensive capability is a contribution to the aggravation of this economic pressure. The economic war and the military war are the two faces of the same strategy of support for **Zelensky** and **Ukraine**.

*An 80-billion deficit does not stop Putin tomorrow. But it means that his war is costing Russia more and more. And every euro of sanctions, every shell delivered to Ukraine, every defense contract signed at Ankara contributes to deepening that deficit. The economic war is also a war, and it must be waged with as much determination as the military one.*

## Oligarchs and the Russian economic elite facing the war

### Capital flight and the exodus of Russia's economic elites

Since the full-scale invasion of **Ukraine** in **2022**, a significant economic phenomenon has occurred in **Russia**: the exodus of a significant portion of its economic and technological elites. According to various estimates, more than **500,000 Russian nationals** left the country in the weeks following the invasion, including a significant proportion of skilled workers, entrepreneurs, and engineers. This hemorrhage of human capital durably affects the Russian economy's capacity for innovation and growth.

Among the oligarchs, the situation is more complex. While some sought to distance themselves from the regime — publicly or behind the scenes — most chose discretion and submission. The suspicious deaths of several figures from the energy and finance sectors in **2022** and **2023** sent an unambiguous message: dissent, even tacit, is risky. Russia's economic elite is held hostage by a regime that needs their resources to fund the war and will tolerate no opposition.

### Sanctions and their impact on Russian elites: a nuanced assessment

Western sanctions explicitly targeted Russia's economic elite to create internal pressure on the **Kremlin**. The asset freeze, the travel bans, the measures targeting oligarchs close to **Putin** — all of these measures had a real impact on individual fortunes. Yachts seized in Mediterranean and Caribbean ports, real estate frozen in **France**, the **United Kingdom**, and **Switzerland** represent tens of billions of euros in immobilized assets.

But this individual impact did not produce the expected political effect: no credible internal pressure movement emerged within the Russian elite to compel **Putin** to cease hostilities. Russian oligarchs have learned since **Khodorkovsky** that challenging the **Kremlin** means risking not just one's fortune but one's freedom and life. Individual economic sanctions, however painful, are insufficient to break a culture of fear sustained for two decades. The macroeconomic impact of sanctions is more relevant than the impact on individual behavior.

*Russian oligarchs have always fascinated me with their ability to accumulate fortunes in a predatory system and then complain about it from Monaco or London. But they have never had the courage of their convictions. The Putin regime perfectly calibrated fear so that none of them would ever be a real counterweight. The sanctions targeting them are just — but change nothing about the war.*

## Economic warfare and third countries: sanctions circumvention

### Bypass routes and gateway countries

A crucial aspect of the economic war against **Russia** is sanctions circumvention via third countries. **Turkey**, **Armenia**, **Kazakhstan**, the **United Arab Emirates**, **Georgia**, and other states have seen their trade with **Russia** explode since **2022**. Dual-use goods, electronic components, military equipment transit through these countries to circumvent Western restrictions. This circumvention traffic significantly reduces the effectiveness of sanctions, particularly for the strategic equipment needed by Russia's defense industry.

Investigations by journalists and independent organizations have documented complex supply chains allowing Western-manufactured components — **semiconductors**, electronic equipment, special materials — to end up in Russian weapons recovered in **Ukraine**. This reality illustrates the limits of unilateral sanctions in an interconnected global economy and forces Western governments into ever finer monitoring of trade flows and increased diplomatic pressure on gateway countries.

### Russia's growing dependence on China: a major strategic pivot

Sanctions circumvention has a major strategic corollary: Russia's pivot toward **China**. Sino-Russian trade reached record levels in **2023** and **2024**, with **China** becoming Russia's top trading partner and absorbing a growing share of its hydrocarbon exports abandoned by European markets. This growing interdependence creates a new geopolitical dynamic: **Russia** is increasingly dependent on a partner that views it as a natural resource supplier and second-tier ally.

For Western analysts, this evolution cuts both ways. On one hand, Russia's dependence on **China** reduces **Putin**'s room for maneuver on the international stage — **Xi Jinping** is not an unconditional ally but a calculating partner who defends his own interests. On the other, **China** provides **Russia** with an economic lifeline that extends its capacity to maintain the war effort. This is the geopolitics of toxic interdependence: two authoritarian regimes bound by interest, not trust.

*Russia bending under sanctions but holding on thanks to China is the summary of the current economic situation. Putin has exchanged a dependency on Europe for a dependency on Beijing. He thinks he has won. He has mostly changed masters. And Xi Jinping knows exactly what he is doing with this opportunity.*

## Conclusion: arithmetic always wins in the end

### The inexorable logic of numbers

Dictatorships have this characteristic: they can deny economic realities for a long time — media control, manipulated statistics, repression of dissent. But numbers have this remarkable property of ultimately imposing themselves, even in regimes most hermetic to reality. The **80-billion deficit**, the bonds yielding **15%**, the **GDP** in slight recession, the indebted regions — these data points are not political constructions. They reflect an economic reality that exists independently of Kremlin propaganda.

The deadly arithmetic of **Putin**'s war is not deadly in the short term for his regime. It is deadly in the medium term for the imperial ambitions that motivated it. A country that structurally impoverishes itself by financing a war of conquest progressively loses the material capacity to sustain those ambitions. This is what the **West** — with sanctions, with support for **Ukraine**, with decisions at the **Ankara** summit — must persevere in imposing.

### Zelensky deserves better than a convenient wait

The Russian economic degradation will only translate into a victory for **Ukraine** if the **West** maintains pressure long enough for the two pressures — military and economic — to reinforce each other. **Zelensky** and his people cannot hold indefinitely on the strength of promises of eternal support alone. They need weapons, ammunition, financing, and clear signals that the **West** is in this war for the long haul.

Russia's **80-billion** deficit is good news for defenders of **Ukraine**. But good economic news does not replace good Western political decisions. The **Ankara** summit is the opportunity to make those decisions — and to send **Moscow** the message that economic arithmetic and Western political determination are working in the same direction: against **Putin**'s war.

**By Maxime Marquette, columnist**

## Columnist's transparency note

### Editorial stance

I am not a journalist but a **columnist and analyst**. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. **I claim analytical clarity**, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

### Method and sources

This text keeps the basic distinction between **verified facts and interpretive analysis**. The rule never changes: a factual claim is published only when a verifiable source supports it, and the sources this article actually used are listed under **Sources**, never here.

**Primary source families** used by the publication, when the story has them: official statements from governments and international institutions, public statements by political leaders, reports from intergovernmental organisations, dispatches from recognised international news agencies.

**Secondary source families**: specialised publications, internationally recognised news media, analyses from established research institutions, reports from industry organisations.

When an article cites statistical, economic or geopolitical data, it comes from the institutions that produce it (intergovernmental organisations, central banks, national statistics offices), and the exact institution is named under **Sources**.

### Nature of the analysis

The analyses, interpretations and perspectives in the analytical sections of this article are a **critical, contextual synthesis** based on the information available, the trends observed and the expert comments cited in the sources consulted.

My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors.

This article describes a documented state of affairs on its publication date, not a prediction: later developments may shift its outlook. No update is promised in advance; when an article is corrected or completed, the change is dated in the text.

*The figures of the Russian economy tell a story that **Putin** does not want his people to hear. A gaping deficit, persistent inflation, an economy increasingly dependent on a single partner and a single resource. Arithmetic is relentless. It cannot be replaced by propaganda indefinitely. The question is not if the Russian economy will eventually crack — it is when. And that timeline depends in part on us: every maintained sanction, every dollar of support for **Ukraine**, every defense contract signed is an accelerator.*

## Sources

### Primary sources

- [United24 Media — Russia's budget deficit tops 80 billion despite Kremlin stability claims — June 23, 2026](https://united24media.com/world/russias-budget-deficit-tops-80-billion-despite-kremlin-stability-claims-20083)

- [Ground News/Bloomberg — Russia to increase war spending by additional 4–5 trillion rubles — June 23, 2026](https://ground.news/article/bloomberg-russia-to-increase-war-spending-by-an-additional-45-trillion-rubles-in-2026)

- [The Economist — Russia's war economy has problems but is not about to crash — June 22, 2026](https://www.economist.com/finance-and-economics/2026/06/22/russias-war-economy-has-problems-but-is-not-about-to-crash)

- [Foreign Affairs Forum — Russia's war economy: Kiel Institute analysis — June 23, 2026](https://www.faf.ae/home/2026/6/23/russias-war-economy-has-problems-but-is-not-about-to-crash-vladimir-putin-is-still-able-to-fund-his-aggression)

### Secondary sources

- [Euromaidan Press — EU keeps full Russia economic sanctions wall to 2027 — June 26, 2026](https://euromaidanpress.com/2026/06/26/trade-banks-energy-crypto-the-eu-keeps-its-full-russia-economic-sanctions-wall-standing-to-2027/)

- [RBC-Ukraine — Zelensky's adviser: Russia's economy has reached a dead end — June 26, 2026](https://newsukraine.rbc.ua/news/russia-s-economy-has-reached-dead-end-zelenskyy-1782474737.html)

- [Kyiv Post — Balts press EU to accelerate Russian oil embargo — June 27, 2026](https://www.kyivpost.com/post/79112)

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Source: Maxime Marquette, MadMax. When citing, name the author and link https://mad-max.co/en/article/analyse-quatre-vingts-milliards-de-deficit-l-arithmetique-mortelle-de-la-guerre