Russia faces worst situation in 30 years, says Russian PM, even more pessimistic than Biden

It was the Russian Prime Minister himself who said it: due to the sanctions imposed by the Western camp, the situation in which Russia finds itself today is the most difficult that the country has known in thirty years. But immediately after this dramatic diagnosis, he counters it by assuring that, despite this, the attempt by Westerners to isolate the country from the world economy will fail.

“The current situation could certainly be called the most difficult for Russia in three decades,” Mikhail Michoustin told the Duma, the lower house of the Federal Assembly of the Russian Federation.

“These types of sanctions were never used, not even in the darkest moments of the ‘Cold War'”he added.

Cut off from the global financial system, denied oil shipments…

Since the invasion of Ukraine by Russian forces on February 24, the West, in order to force Moscow to end its offensive and withdraw its troops, has actually decided on four waves of economic sanctions and is preparing the fifth.

Western sanctions have already isolated Russia from the international financial system and deprived major Russian banks of access to the SWIFT interbank system. Brokers also began to reject shipments of Russian oil, increasing pressure on Moscow.

All planned Russian surplus will be used for state aid.

And yet, in the face of this onslaught of Western sanctions, Russia had planned to generate a budget surplus of 1.3 trillion rubles this year in 2022, the equivalent of 1% of its GDP.

But Mikhaïl Michoustine warned that all this surplus would be used this year for state aid to support companies and ensure the payment of social aid. The Russian government had already agreed to pay more than 1,000 billion rubles.
In retaliation for Western sanctions, Moscow has implemented capital controls to prevent, as far as possible, foreign companies from selling their assets in Russia if they decide to leave the country.

“If you have to leave, production must continue to function because it creates jobs. Our fellow citizens are working there,” said Mikhail Michoustin, as Moscow considered nationalizing assets held by Western companies that decided to leave Russia.

15 years of economic progress erased by sanctions, says Biden

Still, this anguished diagnosis of the situation in Russia made by the prime minister is even more pessimistic than that of Joe Biden this morning.

According to Washington, Russia could see its economy collapse by 15% this year. “The reality is that the country is sinking into economic, financial and technological isolation,” he said. a senior administration official told reporters. “And at this rate, it will return to the standard of living of the Soviet period of the 1980s.”

“Our sanctions will undoubtedly erase fifteen years of economic progress in Russia” and “we will suffocate (its) growth capacity for years,” Joe Biden said Thursday during a union conference in which the US president denounced “major war crimes ”. and he called on the international community to “come together to hold those responsible to account.”