A whiff of panic in the Kremlin as Russia’s economy sinks further
Only one month in and 2016 has already delivered a series of devastating economic blows to Russia. As the price of oil and the value of the ruble plummet, so, too, does the standard of living of the average Russian citizen. Russia’s central bank has been widely praised for not spending the country’s hard-currency reserves to support the ruble — an admittedly losing proposition — yet it has done so on the backs of the Russian people.
The public has responded stoically and largely without panic, even as they see their middle-class aspirations crash. But a whiff of desperation can now be sensed, and it is the Kremlin that appears the most perplexed about what the next steps it should take.
President Vladimir Putin has gone so far as to blame Soviet Union founder Vladimir Lenin for Russia’s current difficulties. Historical scapegoats, however, do not relieve Putin and his government of responsibility for Russia’s financial mess. As the economic temperature rises, Moscow will likely find itself under increased pressure to re-examine both its domestic policies and its foreign adventures.
Signs of panic and dysfunction are everywhere. Finance Minister Anton Siluanov has demanded yet another round of 10 percent budget cuts. (A similar reduction occurred in 2015). Otherwise, Siluanov warns, Russia faces a repeat of the 1998-99 financial crash and possible default — not exactly reassuring words from the man in charge of Russia’s economic policy.
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http://blogs.reuters.com/great-debate/2016/02/04/a-whiff-of-panic-in-the-kremlin-as-economy-sinks-further/
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