London Daily

Focus on the big picture.
Monday, Sep 15, 2025

'Whisper it quietly' … But Russia’s financial situation looks better than the West’s

Despite the barrage of sanctions that the Russian economy got hit with at the start of the Russian military operation in Ukraine, the West's economy seems to be taking the brunt of these sanctions instead of its intended target.
On Friday, Russia’s Central Bank cut interest rates by 3% (from 20 to 17%). And, though overall economic activity in Russia has declined, industrial production was up 4.5% in March. The Russian Prime Minister said that he expected that supply line problems caused by sanctions would be solved within the next 6–12 months. Inflation is at 14.7%, but the Central Bank suggested the worst of this inflationary impulse was over; bank deposits were growing and financial stability was returning.

Even London’s Financial Times notes signs that Russia’s “financial sector is finding its feet after the initial barrage from the sanctions”. And Russia’s oil and gas sales - at more than $1b a day in March - mean that it continues to accumulate foreign earnings that will help compensate for the reserves seized by the West. As things stand (i.e. barring a complete EU energy import ban), Russia should be able to replace those seized reserves - in short order.

The domestic banking sector also seems to have stabilised. The need for central bank liquidity has faded sharply and the commercial banking sector as a whole could soon end up having surplus deposits with the CBR, the Financial Times notes, quoting the Institute of International Finance analysis.

So, contrary to the G7’s expectation that western sanctions would collapse the Russian economy, the FT is saying: “Whisper it quietly ... Russia’s financial system seems to be recovering from the initial sanction shock”.

Ironically, Russia’s prospects in some respects look better than those of the West. Like Russia, Europe either already has – or soon will have - double-digit inflation. The big difference being that Russian inflation is falling, whereas Europe’s is spiking to the point (notably with food and energy prices), that these price hikes likely will spur popular outrage and protest.

Well … having got that wrong (the political crisis was pencilled-in for Russia, not for protests in Europe), EU states seem intent on doubling down: ‘If Russia hasn’t collapsed as expected, then Europe must go ‘the full Monty’: Just strip them of everything: No Russian ships entering EU ports; no trucks crossing EU frontiers; no coal; no gas – and no oil. ‘Not a euro reaching Russia’ is the cry.

On the face of it, this would be ‘nuts’. Take the experts’ words for it: there is no way for Europe to replace Russian energy from other sources in the next year -- not from America; not Qatar; nor Norway. But the European leadership, consumed by a frenzy of outrage at a flood of 'atrocity' images from Ukraine, and a sense that the ‘liberal world’ at any cost must prevent a loss in the Ukraine conflict, seems ready to go ‘whole hog’.

The higher energy costs implicit in stripping out Russian energy simply will eviscerate what remains of EU competitiveness – but what the heck! Zelensky! Ukraine!

Charles Moore, (a longstanding editor of mainstream British newspapers and The Spectator) says: “[I]f Russia wins, this means not only the destruction and enslavement of Ukraine, but also the overthrow of the world order by something infinitely crueller – an unholy alliance… From this, it follows that Ukraine must win, not just to secure its national rights, but for all our sakes. I know Ukraine is not in NATO, but Russia’s attack on that one country definitely amounts to an attack on all”.

"Whisper it quietly": The EU holds to a haughty conviction that it is the monopsony that can never be ignored. It is the market: the 400 million EU market. And monopsony (the opposite to a monopoly) is a market structure in which a single buyer (i.e. the EU) can control the world simply through exclusion from its market. Brussels bureaucrats believe it. This is how, they believe, they’ll bring down Russia, and save ‘our democracy’.

But, as Alexey Gromov, Chief Energy Director of the Institute of Energy and Finance in Moscow, explains: “Russia [has] changed the logistical supply chains to Asia already”. And that applies for gas and oil as well: “You can impose sanctions if there’s a surplus in the market. Now there’s a shortage of at least 1.5 million barrels of oil a day. We’ll be sending our supplies to Asia – with a discount”.

So why is Brussels so convinced that it can strip out Russian energy, and survive without riots in European streets at hyper-inflationary food and heating prices? Their thinking is a panglossian judgement that the EU can just about survive an energy squeeze through summer, and then by the autumn, a new ‘regime’ will be taking office in Russia in the wake of Putin’s ‘Ukraine débacle’ (of which they are convinced), which will be only too delighted to sell energy to Europe at discounted prices, for long enough to allow the EU to wean itself off Russian energy – for good. End of story (so they seem to believe).

But, say it quietly: The more the West execrates Russia in Ukraine and the more it parades its loathing of President Putin, the more determined are Russians to persevere in Ukraine, and fully to support Putin. The more the EU sanctions Russia, the more sentiment in Russia will favour depriving Europe of those myriad of key commodities (mostly unfamiliar to us as supplied from Russia) on which Europeans depend – but never knew it.
Newsletter

Related Articles

0:00
0:00
Close
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
×