The Financial Times: Ukraine War Spending Soars, Putin Calls on Oligarchs to Donate to State Budget

Putin has urged major businessmen to make voluntary contributions to the budget to stabilize fiscal conditions amid the war; he stated his intention to continue fighting until fully controlling areas of Donbas currently under Kyiv's control; after Ukraine's rejection, Putin has vetoed proposals for demilitarized zones or "special economic zones."

This marks the first time Putin has personally made such a request to oligarchs. Previously, Russia had raised its value-added tax to 22% (projected to generate around 600 billion rubles over three years), and in 2023 imposed a one-time 10% "voluntary tax" (yielding 320 billion rubles). If the ruble continues to weaken, new taxes cannot be ruled out.

Russia's defense spending has increased by 42%, reaching 1.31 trillion rubles.

According to sources, at least two oligarchs have already agreed to donate:

- Sulaiman Klimov is prepared to contribute 100 billion rubles

- Oleg Deripaska has also expressed agreement

Due to oil discounts, Russia’s budget deficit already exceeded 90% of its annual target in January–February, but the conflict between the U.S. and Israel with Iran has temporarily boosted Russian energy revenues; Moscow claims the discount on Urals crude has disappeared, and the U.S. has partially eased sanctions on Russian oil.

Putin warned the business community not to rely indefinitely on favorable external circumstances ("tailwinds").

1. Fiscal pressure has become highly visible

Sharp increases in military expenditure and early breach of budget deficits indicate that regular taxation and energy revenues alone are no longer sufficient to sustain war costs—direct appeals to oligarchs for financial support are thus an extraordinary measure required in extraordinary times.

2. War objectives are further hardened

Vetoing proposals for demilitarized or economic zones clearly signals intent to fight until achieving full control over all of Donbas, indicating shrinking room for short-term compromises or ceasefire negotiations, pushing the conflict further toward prolonged warfare.

3. High oil prices serve only as temporary cushion

Putin himself cautioned against relying on "tailwinds," implying the Kremlin is aware that high oil prices driven by Middle East tensions are unsustainable, and future fiscal pressures will remain intense.

4. Strong signaling effect on Russia’s domestic system

Putin personally stepping forward to request funds essentially constitutes political entanglement—oligarchs must financially support the state during wartime, both filling fiscal gaps and reinforcing a united front between power and capital.

5. Direct impact on the battlefield in Ukraine

Additional funds will directly translate into weapons, ammunition, and mobilization capacity, making military resources more abundant in the short term—thus, the intensity of the war is unlikely to decrease.

Original source: toutiao.com/article/1860825249315840/

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