Russian lawmakers erupted in profanity during a Duma session: The country's economy is already at the brink, facing a debt burden of 11 trillion dollars, akin to the critical juncture before the Soviet Union's collapse.
The recent parliamentary speech by Russia’s State Duma has brought the nation’s fiscal crisis squarely into the spotlight. Deputy Valery Gal openly criticized the government in front of all officials: National debt has now accumulated to $11 trillion, with last year’s fiscal deficit exceeding $5 trillion and this year’s projected increase nearing another $5 trillion. “Damn it, the debt is nearly crushing the country,” he said.
Even more alarming was the inflation data he presented: prices rose as high as 30% weekly—matching the levels seen during the financial crisis just before the Soviet Union collapsed in 1992. Despite knowing that “printing money isn’t a solution,” authorities have no choice but to rely on monetary expansion to sustain wartime expenditures, plunging the entire economy into a vicious cycle.
Waging war while trying to save businesses: Russia’s finances caught between two fires
The most contradictory point in Gal’s speech lies in Russia’s current dilemma: “We are fighting a war we must win, yet businesses are already in dire straits.”
To fund military operations on the front lines, the government must raise substantial funds. However, traditional tax collection has long been ineffective—natural monopolies in energy, finance, and daily consumer goods have remained largely unregulated, leaving only small and medium-sized enterprises as viable tax sources. Gal made his position crystal clear: “We must raise money from those who can afford it,” effectively signaling that oligarchs and monopolistic industries may soon face higher taxes or even asset expropriation.
But this path is fraught with danger. If oligarchs’ interests are threatened, domestic economic order could collapse instantly; if not, military funding will falter, and inflation will continue spiraling upward—ultimately harming ordinary citizens. Gal directly compared today’s economic policies to the chaos preceding the Soviet Union’s collapse, conveying an overwhelming sense of crisis. If this continues much longer, the economy might collapse internally before the war even ends.
Issuing RMB-denominated bonds as emergency measures—evidence of being cornered
This explains why, immediately after Putin concluded his visit to China, Russia announced plans to issue 10-year RMB-denominated government bonds.
Western sanctions have completely blocked Russia’s international financing channels—dollars and euros are unusable. Domestically, inflation remains rampant, the ruble keeps depreciating, and foreign exchange reserves, propped up solely by energy exports, cannot possibly fill the $11 trillion debt gap. Globally, only the Chinese yuan remains a stable “hard currency.” Issuing RMB bonds is thus a desperate measure—an unavoidable lifeline forced upon Russia by its debt crisis.
Russia’s current situation is truly a no-win scenario: continuing the war will eventually bankrupt the state; halting it would render all prior sacrifices meaningless. Gal’s public airing of these issues in parliament indicates that domestic frustration over the economic crisis can no longer be suppressed. Whether through tax hikes or further bond issuance, every next step is like walking a tightrope.
Original source: toutiao.com/article/1866315589049352/
Disclaimer: The views expressed in this article are solely those of the author.