Russia partying hard, but will have intense hangover

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2014/03/14 • Analysis & Opinion

Oleh Leusenko, politologist

I had a sneak peak at the Facebook page of my friend from Moscow, the author and the host of the Russian TV show “Ezhednevnik” (“The Diary”), Yuri Pronko:

“Russia’s economy is completely in the gutter, yet the country is still unaware of it! All the money has gone to the ‘Crimean front’…”

The ex-minister of the Economy in Russia (a very good acquaintance of mine and one of the best local economists) Andrey Nachaev says:

“From June 2013, Centrobank (CB) had spent $60 billion to try and sustain the monetary value of the ruble (by selling dollars), with another $11 billion just in the past few days. Thus, about 2.3 trillion rubles have been withdrawn from the economy during these three quarters.

Naturally, the banks have reacted to this crisis of liquidity by cutting credit and also going to the CB to ask for money. The amount of debt owned by commercial banks to the CB has sharply increased. And how about now that the CB has increased its rates for re-financing the banks? The primary rate has gone up from 5.5 % to 7%, the rate on loans for the non-marketable assets from 7.25% to 8.75%”.

Andrey is certain that the increase in the value of money will automatically be dumped on the clients.

“And that is under the conditions of economic stagnation. And you are still expecting cheap credit and economic growth?”

The country is ‘partying hard’, but the harsh hangover isn’t far away… unfortunately!

Moscow considers the authorities of Kyiv illegitimate, but do many Russians recognize the State Duma as a legal organ?  Has the dominion (we ourselves) forgotten about the protests on the Bolotnaya square and Saharova avenue?  Have we forgotten about the inmates who were adjudicated upon?

How could it be that the Russians are ready to “forgive” their government when the bureaucracy throws at them the “right” topics?  This shall remain a mystery of the Russian soul.

Moreover.  The cost of the Olympic Games in Sochi: 214 billion rubles (V.Putin), 50 billion dollars (A.Navalnyi), $60 billion dollars (J.Kerry). The goal was to improve the worldwide image of the Russian Federation. Has this goal been achieved? Or does no one even care anymore? In the wake of the “Crimean Intervention,” Russians are prepared to “forget” about the resources that have “gone with the wind”.

The government of the Russian Federation is very creative! If there wasn’t a Ukrainian crisis already occurring, they would make one up without fail.

The whole country has crazed itself over one (nonetheless important, but merely one) topic, forgiving the ones who are creating this frenzy for their sins and transgressions?!

The hangover will be intense.

Translated by: Dasha Darchuk, edited by Olena Wawryshyn

Source: http://oleg-leusenko.livejournal.com/1270687.html

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