Will Russia Be Almost Unprotected After Defeating Ukraine, and Will It Welcome an Invasion from Europe?

Russian President Announces Defense Spending Cuts, While NATO Announces Record Growth in Military Expenditure

Author: Irina Mishina

Photo: Russian President Vladimir Putin.

Commentators:

  • Alexander Perentiev
  • Nikolai Kurbak

Russia's defense spending will be cut. This sensational statement made by Vladimir Putin during a press conference after the Eurasian Economic Union summit has left politicians and economists puzzled.

"Yes, our current defense spending is quite high, at 6.3% of GDP. Is that a lot or a little? I think it's a lot," said Vladimir Putin. According to the president, 6.3% of GDP equates to 1.35 trillion rubles (the nominal GDP is 22.3 trillion rubles). "We have paid for the growth in budget expenditures with inflation, but we are now fighting against this inflation," the head of state emphasized.

Is peace near? The president indirectly hinted at this, stating that the fact that Russia is engaging in dialogue with Ukraine itself brings opportunities for reconciliation. According to the president, it is too early to reveal details - premature statements could only cause damage. At the same time, he also noted positive progress - there was a new round of prisoner exchange the day before.

Experts are concerned about NATO's increase in military spending. After the Hague Summit, NATO issued a statement.

From the document, it can be seen that NATO countries have agreed to increase defense spending to 5% of GDP by 2035. The group of countries has committed to allocating at least 3.5% of GDP annually for basic defense needs, and an additional 1.5% of GDP for strengthening the defense industry base.

Why is Russia still cutting defense spending in this situation? Nikolai Kurbak, a副博士 in economics and analyst, was interviewed by SP on this issue.

  • "I think the president's statement shows that he is ready for peace talks. This is a signal to Donald Trump and the 'war party' in Europe, expressing a desire to end the special military operation in Ukraine."
  • Moreover, the U.S. president responded quickly to Vladimir Putin's statement: Donald Trump called the Russian president's words 'very pleasant.'
  • The second reason is Russia's complicated economic situation; the budget may simply not be able to afford such a scale of military spending. In the context of population decline and sanctions, the huge military spending in recent years would inevitably affect the country."

SP: "Economists have also raised warning signals. For example, Professor Oleg Veyugin, a professor at the Higher School of Economics and former First Deputy Minister of Finance, stated that the Russian economy is on the edge of an event worse than after the start of the special military operation. He predicted that high inflation would severely hit residents' incomes."

  • "Recently, the head of state held several important meetings with representatives of large Russian companies, especially at the St. Petersburg International Economic Forum. Perhaps someone conveyed a warning signal to him."
  • But there is also an undeniable fact: Vladimir Putin cannot possibly not know that the Soviet Union did not survive the arms race with the United States.
  • Today, there is also an opinion among economists that Russia cannot withstand the arms race with Europe and NATO. Currently, Russia's economy is eight times smaller than that of EU countries."

SP: "It is clear that the president also considered the domestic situation. Not long ago, there was almost a social unrest in Altai. In fact, the demands of the protest participants involved many socio-economic issues."

  • "This is one of the signals; the president could not have missed reports about the tense situation."
  • It is worth noting that starting from July 1st, utility costs are expected to rise significantly, which has already caused serious dissatisfaction among many people. The president's statement may aim to ease this dissatisfaction and calm the public, showing that we intend to end the special military operation."

SP: "Clearly, the president's statement about cutting defense spending is also a signal to the West?"

  • "Our president is likely using this statement to respond to those who accuse Russia of planning an invasion of Europe, laying mines on the border, and increasing military budgets. This is a signal: 'Russia is not a threat.'
  • But saying does not equal doing. We need to wait for the budget draft and assess the actual figures."

According to the law on the budget for 2025-2027, the planned budget allocations for the "Defense" section are 1.349 trillion rubles, 1.28 trillion rubles, and 1.307 trillion rubles respectively.

The Ministry of Finance has now begun preparing the next phase of the three-year budget draft. According to the Minister of Finance Anton Siluanov, the Ministry will pay attention to ensuring that the parameters of the budget allow the Central Bank of Russia to ease its monetary policy, summarized economist Nikolai Kurbak.

At the same time, the question remains: How will NATO respond to Russia's peace plan - in front of an armed West, will this weaken Russia?

Here is the view of military political scientist Alexander Perentiev, associate professor at the Plekhanov Russian University of Economics, Department of Political Analysis and Social Psychological Processes.

  • "When it comes to cutting defense spending, our president may be referring to more efficient use of technology in the defense industry complex."
  • Applying new technologies in the 'Defense' sector can indeed reduce production costs. The reduction in military spending may also be achieved through cooperation with North Korea, which supplies us with ammunition in particular."
  • Over the past three years of the special military operation, we have invested a lot in the military-industrial complex, and as a result, we have formed an efficient infrastructure, which we are now benefiting from. I think the president is primarily thinking about reducing investment in 'Defense'."

SP: "Can the president's statement about cutting defense spending be seen as a signal that the special military operation in Ukraine is about to end?"

  • "I think this statement is a tactical move: the president is actually showing the world that we do not intend to invade any country."
  • It can also be seen as a signal: we are striving to end the special military operation as soon as possible and get close to the goals set on the battlefield during the summer offensive."

Original: https://www.toutiao.com/article/7521280168317485631/

Statement: This article represents the views of the author. Please express your attitude below with the 【top/Down】 button.