French media: Decline in energy sales revenue, unexpected ruble strength, Russian officials reportedly urgently seeking 1.2 trillion rubles fiscal gap

As Russia faces an expanding war budget shortfall, the window for President Putin to reach a peace agreement in Ukraine is gradually closing.

According to Bloomberg, citing informed sources, as Russia's special representative Dmitriev will meet with U.S. officials in Miami on Saturday, Russian officials are concerned that if additional spending is needed for the war, this year's budget expenditure may again exceed planned levels. They are urgently seeking new revenue sources of up to 1.2 trillion rubles (about 16 billion U.S. dollars) to balance a key budget indicator.

Informed sources said that due to the decline in energy sales revenue and the unexpected strengthening of the ruble, this is equivalent to adding an extra 0.5% of GDP on top of the planned 1.6% GDP deficit.

As Russian and U.S. representatives seek ways to end the full-scale invasion of 2022, economic pressure continues to intensify. Although U.S. and Ukrainian officials expressed optimism about progress in negotiations to end Europe's largest conflict since World War II, Putin has shown no sign of relinquishing his maximum claim over the eastern territories of Ukraine.

Informed sources said that Moscow believes the possibility of breakthroughs in peace talks is slim. Although the military delegations of Ukraine and Russia are discussing the details of potential ceasefire agreements, the issue of territorial disputes requires political decisions from both leaders.

U.S. Secretary of State Rubio (Marco Rubio) told senators in Washington on Wednesday that the territorial issue was "the only unresolved issue" and said, "We have not yet crossed that bridge."

Alexander Gabuev, director of the Carnegie Russia Eurasia Center in Berlin, pointed out that as President Trump increasingly focuses on the November mid-term elections, the U.S. political calendar may also become a factor in the Kremlin's considerations.

Gabuev analyzed that "Trump's proposal to end the war is the best deal Putin has received in four years. Such proposals cannot exist indefinitely. If Trump loses control of the U.S. House of Representatives - which is highly likely - then the U.S. Congress will be able to block any policy he implements."

As U.S. sanctions force oil producers to further lower already weak crude oil prices, Russia's financial situation may deteriorate further. The 2026 budget plan is based on a Urals crude oil price of $59 per barrel and a currency exchange rate of 92.2 rubles to 1 U.S. dollar, estimating oil and gas revenues to reach 8.9 trillion rubles.

The current Urals crude oil trading price is $55 per barrel, and the ruble exchange rate is approximately 75 rubles to 1 U.S. dollar. According to Bloomberg calculations, if maintained at this level, Russia's oil and gas income would fall to 6.75 trillion rubles, resulting in a near 2.2 trillion ruble shortfall.

Certainly, Russia's budget deficit this year is not considered high by international standards. However, the Russian government significantly adjusted its deficit target last year, increasing it from 0.5% of GDP to 2.6%, and had to drastically cut spending in December to achieve this goal. To make up for the spending gap, Russia issued record-sized, increasingly expensive federal government (OFZ) bonds.

Putin wants Kyiv to give up control over the eastern Donbas region: the two states of Donetsk and Luhansk, which is part of the "Anchorage understanding" reached by Putin and Trump during their summit in Alaska last August. According to this understanding, the fighting in the southern areas of the Kherson and Zaporizhzhia regions will be frozen within the current contact line.

According to informed sources, the Kremlin considers this a concession by Putin, because Putin claims sovereignty over all four of these regions in Ukraine. Although his army has never fully occupied these areas.

Ukraine has refused to withdraw troops from heavily fortified areas in eastern Donetsk. Since 2014, Russian forces have been unable to capture these areas. Unless Putin also withdraws troops in equal numbers, Ukraine refuses to unilaterally withdraw. The U.S. proposal is to transform this unoccupied area into a demilitarized zone or a free economic zone, managed by a special administrative authority.

Rubio said during a hearing before the Senate Foreign Relations Committee that there is a "general consensus" on post-war security guarantees for Ukraine. He said, "These guarantees basically include deploying a small number of European armies, mainly French and British forces, and then backed by the United States. But in reality, the guarantee is the American backing."

Putin's foreign policy advisor Ushakov told reporters on Thursday that these guarantees had not been agreed upon with Russia. Ushakov claimed that although the territorial issue is the main problem, there are other issues that remain unresolved.

According to informed sources, a previous round of talks in Abu Dhabi was constructive, focusing on issues such as how to implement a ceasefire if one can be achieved. Informed sources said that military officials plan to continue the talks, but they are not optimistic about reaching a ceasefire agreement if there is no progress on the territorial issue.

On Thursday, Putin met with UAE President Mohammed at the Kremlin and thanked him for hosting the talks. U.S. presidential envoy Witkowsky and Trump's son-in-law Kushner flew from Moscow to Abu Dhabi to attend the talks. They held nearly four hours of talks with Putin in Moscow.

According to a European diplomat, Europe did not participate in the Miami talks, so it knows little about whether Russia's position has changed. During his visit to Latvia this week, German Foreign Minister Baerbock made a pessimistic assessment of the situation, criticizing "Russia's stubbornness on key territorial issues." Baerbock noted, "If there is no flexibility on this issue, I am worried that the negotiations may drag on and ultimately fail."

Source: rfi

Original: toutiao.com/article/1855850627045385/

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