Why Russia's economy is beginning to falter
President Vladimir Putin immediately rejected that assessment, eager to praise Russia's resilience in the face of sanctions. But the numbers do not lie. In July, the International Monetary Fund lowered its growth forecast for the country from 1.5% to 0.9% for 2025. This is a far cry from the spectacular rates of 4% seen in 2023 and 2024, when the state devoted all its financial resources to the war.
Another troubling sign: The budget deficit has exploded, reaching, according to the Finance Ministry, 4.9 trillion rubles (about €56 billion) at the end of July – a surge of 30% compared to the annual target set by the government. The economic slowdown, the drop in oil and gas revenues, as well as the depletion of reserve funds – practically exhausted after three years of war – make up a new reality: Cuts are coming. The Finance Ministry will find it difficult to slash spending on defense and security, which account for just over 40% of expenditures. The government will therefore have to reduce social contributions as well as support for civilian industries.
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Euronews
12 hours ago
- Euronews
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As Donald Trump is hosting Vladimir Putin for a historic summit in Alaska, Ukraine and Europe are holding their breath for what the meeting can bring. For the US president, the summit represents an unprecedented opportunity to establish himself as a peacemaker and push Russia to a ceasefire. For Putin, this is a chance to change tack despite his unwillingness to engage in direct negotiations with his Ukrainian counterpart Volodymyr Zelenskyy. Ukraine's president has not been invited to the summit at the US military Joint Base Elmendorf-Richardson in Anchorage, but Trump hopes he will be present for the second round of talks. The question remains, will there be a second meeting after the negotiations in Alaska? Follow our live updates as Euronews journalists around Europe bring you the latest developments in the blog below:
France 24
12 hours ago
- France 24
The Ukrainian land occupied by Russia at the heart of the Trump-Putin summit
Upon announcing he would be meeting with his Russian counterpart Vladimir Putin, US President Donald Trump threw a spanner in the works. As he explained in broad strokes that the Alaska summit with the Russian president would take place on August 15, he said 'there will be some swapping of territories to the betterment of both' Ukraine and Russia – but didn't go into detail. Hours later, Ukrainian President Volodymyr Zelensky said on social media that 'Ukrainians will not give their land to the occupier'. Since Trump's contentious comment, speculation on whether his meeting with Putin will result in a radical and coercive change to Ukraine's borders has been rife. And even the use of the word 'exchange' is risky, as Russia currently controls almost 20 percent of Ukraine. Meanwhile, Kyiv has not occupied any Russian territory since March, when the Ukrainian army still had a partial hold on the Kursk region following a surprise offensive launched in August 2024. The power imbalance on the ground has meant there is little optimism for the outcome of the summit held by Putin and Trump in Alaska today. Especially seeing as Russian territorial demands seem clear, unlikely to change and represent a complete disadvantage for Ukraine. Those demands include Ukrainian land claimed by Russia since 2014. That year, in the span of a few months, Moscow took the Ukrainian government by surprise and left the West speechless by annexing the Crimean Peninsula. The capture of Crimea was followed by a similar operation led by Russian-backed separatists to take over parts of the Donetsk and Luhansk oblasts (regions). Russian annexation of four Ukrainian oblasts in 2022 Following the annexation of Crimea, the so-called Donbas war between Russia and Ukraine lasted from 2014 to 2022 and claimed more than 14,000 lives on both sides, according to the UN. Then in February 2022, the conflict between the two countries took on new dimensions when Russia launched its large-scale invasion of Ukraine. At first, Moscow moved rapidly towards the capital, Kyiv. But the Russian army was met with resistance from Ukrainian forces. In the south and east of Ukraine, Russia took control of large swathes of land (see map below). Most of the Luhansk oblast was occupied by Russian forces, who extended their invasion into the Donetsk oblast, and also seized a large part of Kherson and Zaporizhzhia. A few months later, Moscow proxies in the four regions organised an annexation 'referendum' and claimed victory – a move described by the West as a ' sham '. Luhansk, Donetsk, Kherson and Zaporizhzhia now have the same unofficial status as Crimea. But neither Ukraine nor the international community have recognised the annexation. The war in Ukraine has taken tens of thousands of lives and caused irreversible damage to the country. And after three and a half years of fighting, there is no reconciliation on the horizon for either Ukrainian or Russian forces. Despite three rounds of peace talks in Istanbul, Kyiv and Moscow, an agreement has not been found. Ukraine and its western allies accuse the Kremlin of blocking negotiations by sticking to its maximalist demands, which include Kyiv surrendering Crimea and the four other regions it occupies. Meanwhile, Russia continues to gain ground on the battlefield. Ceding territory in exchange for a ceasefire? A recent proposal made to the US by Russia seems to be the reason the Trump-Putin summit is taking place at all, the Wall Street Journal reported last week. According to the US outlet, 'Putin's proposal would require that Ukraine hand over eastern Ukraine, a region known as the Donbas, without Russia's committing to much other than to stop fighting'. This would mean that Ukraine, which still controls parts of Luhansk and Donetsk that make up the Donbas, would surrender land that tens of thousands of soldiers have died trying to protect – places like Kramatorsk or Slovyansk. As for Kherson and Zaporizhzhia, the Wall Street Journal reported: 'A US official said Putin called for pausing the war at current lines in both regions. Russia would then negotiate land swaps with Ukraine, aiming for full Moscow control of Zaporizhzhia and Kherson. It couldn't be determined which territory Ukraine would receive in return.' If Ukraine were to cede these regions to Moscow, it would have full access to Crimea and control of the Sea of Azov, which has been under de facto Russian control since 2014. European allies of Ukraine, who were not invited to the summit in Alaska, voice their strong opposition against any cessation of Ukrainian territory. After meeting with Zelensky in Berlin, German Chancellor Friedrich Merz said Ukraine is ready to negotiate ' on territorial issues ' but was adamant that legal recognition of Russian occupations 'would not be up for debate'. Zelensky has ruled out any withdrawal of Ukrainian forces from the eastern regions as part of a peace deal. What's more, 82 percent of Ukrainians reject the demands made by Russia to cede land, according to a recent opinion poll by the Kyiv International Institute of Sociology. But the future of their country will, in part, be decided without them in Friday's talks.
LeMonde
13 hours ago
- LeMonde
Alaska, a hint of Russia in America
When historian Lee Farrow traveled to Russia with support from the US State Department to promote her book on Tsar Alexander II's 1867 sale of Alaska, Seward's Folly: A New Look at the Alaska Purchase (2016), there was always someone in the audience who claimed that the United States had not paid the agreed sum or that it was only a temporary concession. "There's been a very popular perception that somehow Russia was not given a good deal in all of that, and that maybe we'd even done something a little bit dishonest," explained the historian from Auburn University in Alabama. "[In] the wake of the collapse of the Soviet Union, the Russian people [were] looking for some sense of their former greatness. And so (...) reclaiming lost territory would go along with that (...) idea." In short, a certain "Alaska-is-ours" sentiment thrives in Putin's Russia. Ahead of Friday's summit between Donald Trump and Vladimir Putin, moderation is the order of the day. Russian presidential adviser Yuri Ushakov described Alaska as a "logical place" for the August 15 meeting between the two leaders, citing the proximity of the two countries, separated by 82 kilometers across the Bering Strait (2.4 kilometers, if you count the two Diomede Islands − one Russian, the other American), and the shared economic interests in Alaska and the Arctic region.
