Russia's economy is cracking and West must step up sanctions, says Finnish foreign minister
Russia's economy is showing 'serious cracks' and the West must intensify sanctions to put Ukraine in the best possible position for a peace deal, Finland's foreign minister has said.
In an interview with The Telegraph, Elina Valtonen, who was in London for talks with the Foreign Secretary, urged Western nations to 'keep up the economic pressure' on Russia in the critical months to come
'We see that sanctions are working,' Ms Valtonen said, 'Russia's economy is showing some serious cracks'.
'We just need to be wrapping things up so that there could be peace, hopefully later in the year.'
The minister's remarks came amid a fresh push to curtail the 'shadow fleet' of ageing, uninsured tankers Russia uses to circumvent Western sanctions.
Moscow relies on around 600 such vessels to covertly carry its oil and gas around the world, undermining the EU and G7 price cap on its fuel and petroleum products.
Its treasury has earned more £650 billion from exporting oil and gas since the war began in 2022.
In December, 12 European countries including the UK and Finland agreed to begin requesting proof of insurance from suspected shadow fleet vessels as they pass through the English Channel and the seas around Denmark, Sweden and Finland.
If implemented effectively, the additional checks could disrupt the fleet's money-gathering operations.
Economists have highlighted signs of strain in the Russian economy in recent months, such as the central bank's decision to raise its key interest rate to 21 per cent.
While Vladimir Putin can maintain his war machine at current levels, the economic growth prompted by lavish spending on the military and wage growth tied to manpower shortages is starting to run out of steam.
GDP growth in 2025 is forecast at between 0.5 per cent and 1 per cent, well down on the 3 per cent this year.
Following her meeting in London with David Lammy, Ms Valtonen said: 'We are like-minded in so many things.'
The UK and Finland share a belief 'in the need for Europe to ramp up its defence and deterrence, and also especially the need to aid Ukraine in this situation', added Ms Valtonen, a member of Finland's ruling centre-Right National Coalition Party.
On Dec 26, Finnish military police boarded the Eagle S, a tanker suspected of damaging the undersea Estlink 2 power cable in the Baltic Sea. At least 11 undersea cables in the region have been damaged since October 2023.
The aggressive operation was a sign to Russia that, if it is planning further sabotage in Western waters, 'they should drop it,' Ms Valtonen said.
In January, Royal Navy vessels confronted the Yantar, a Russian spy ship, after it entered British waters.
Under the Joint Expeditionary Force (Jef), the UK and nine other nations including Finland have joined forces to share information regarding the shadow fleet, including the use of a British AI system to flag vessels as they enter suspicious zones.
'We agreed that we join forces in any ways, legal ways, to even better tackle these [shadow fleet] issues,' Ms Valtonen said, adding that Finland was also stepping up technical surveillance of undersea infrastructure.
Helsinki has overtaken Britain in terms of spending on defence as a percentage of GDP, hitting 2.41 per cent in 2024 following a drive to modernise its military in line with Nato standards.
Sir Keir Starmer has commissioned a Strategic Defence Review, due to report in the spring, aimed at raising UK defence spending to 2.5 per cent of GDP, up from the current 2.3 per cent.
But the target may not be reached until 2030, according to reports last week, in an effort to avoid further spending cuts.
'We want capabilities to be strong in order to deter Russia or anyone else for that matter,' Ms Valtonen said, referring to the need to make the Finnish army 'interoperable within Nato and also adherent to Nato's defence plans' after joining the bloc in 2023.
On defence spending as a whole, she said: 'It's an existential question for Europe and all countries need to ramp up their defence and deterrence.
'We are in this together, and I think the recent surge in these hybrid attacks, whether it's by Russia or whoever… it's important to realise we are very much in the same boat.
'Even if there was peace in Ukraine – which needs to be, of course, just and lasting – it's possible that the threat from Russia doesn't go away, which means that you still need to be able to defend and deter in other places in Europe as well.'
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