Russian President Vladimir Putin has asked wealthy businessmen to contribute financially to the defense budget, which has been hit by the costs of the war in Ukraine and Western sanctions, according to information that appeared in the international press.
Putin asks oligarchs to donate to Russia's defense budget PHOTO: AFP
Vladimir Putin asked the Russian oligarchs to donate money for the country's defense budget, which is facing increasing pressure, in the context of the continuation of the invasion from Ukraine, reports the international press quoted by News.ro.
According to the Financial Times, the Kremlin leader plans to continue the conflict that began in February 2022 until Russia manages to take full control of the areas of the Donbas region that are not yet under its authority.
At least two businessmen would have conveyed to Putin, following a meeting held on Thursday, that they are willing to contribute financially to the defense budget.
The decision comes after Ukraine allegedly refused, in recent negotiations mediated by the United States, to unilaterally withdraw from Donbas.
Difficult negotiations and divergent positions
Russia to resume talks with the United States on a possible peace agreement “as soon as conditions permit“, said Kremlin spokesman Dmitry Peskov.
He emphasized that Moscow has not lost its interest in the negotiations, but warned that essential issues, especially territorial ones, remain unresolved.
For his part, Ukrainian President Volodymyr Zelensky said in an interview with Reuters that Washington would condition the provision of security guarantees on the ceding of the entire Donbas region to Russia.
“The Middle East certainly has an impact on President Trump and, I think, on his next steps. President Trump, unfortunately, continues to choose a strategy to put more pressure on the Ukrainian side. I would very much like the American side to understand that the eastern part of our country is part of our security guarantees”Zelensky said.
The defense budget is growing, but the deficit is deepening
Russia's military spending has grown significantly, with the defense budget increased by 42% last year to 13.1 trillion rubles (about £121bn). In parallel, the authorities are trying to stabilize the economy by introducing new taxes.
Economy Minister Maxim Reshetnikov said Russia is considering introducing a new tax on windfall profits if the ruble continues to depreciate. In 2023, the state has already collected 320 billion rubles through a one-time tax of 10% applied to large companies.
Also in January, the Kremlin raised VAT to 22%, with the aim of raising additional revenue of around 600 billion rubles over the next three years, especially from small and medium-sized businesses.
However, Russia's budget deficit for the first two months of the year exceeded 90% of the full-year estimate amid US sanctions that have forced Moscow to sell oil at lower prices.
Warning on expenses and market volatility
In this context, Vladimir Putin called for prudence in managing the additional income generated by the rise in oil prices, influenced by tensions in the Middle East. “Now that the prices of our traditional exports are rising, but the markets are turbulent, there may be a temptation to take advantage of the situation,” he told business leaders in Moscow.
The Russian president warned that these revenues could be squandered by distributing dividends or increasing public spending. “We have to remain cautious. If markets move in one direction today, they can move in the other tomorrow,” Putin emphasized.
“There is a need for a moderate degree of conservatism and a moderately conservative approach, both in the corporate sector and in public finance.”
