Kremlin's priority is a war. Russian President Vladimir Putin has signed the 2026 budget, allocating nearly 40% of all expenditures to the military and security sector. Moscow is prepared to sacrifice social programs and economic development in order to continue its aggression against Ukraine, the Center for Countering Disinformation reports.
Record since the Soviet era: Peace is not part of plan
Social spending in the new budget amounts to only 25%.
“This is a record since the Soviet era and a direct signal that peace is not part of the Kremlin’s plans for the coming year,” the report states.
The Center notes that sanctions have significantly reduced Russia’s oil and gas revenues, resulting in a large budget deficit of 1.6% of GDP. To “plug the holes,” the Kremlin is cutting social programs, with their share dropping to 25%, the lowest in 20 years.
At the same time, the Kremlin is introducing new taxes: raising VAT to 22%, complicating conditions for small businesses, and imposing new levies on companies and ordinary Russians.
“This budget once again confirms that the Kremlin’s priority remains a prolonged war, even at the cost of economic degradation and the impoverishment of its own population,” the Center concludes.
Meanwhile, Ukraine intends to cover its war expenses with Russian frozen assets held in Europe. The EU is working on a plan to use €140 billion of the funds, mainly held in Euroclear in Belgium.
However, the final decision on this mechanism has been delayed multiple times, with Belgium raising legal and financial concerns about risks and liabilities.
