Price of Ukraine

Illarionov's statement was made in connection with the clumsy excuses of President Dmitry Medvedev and Prime Minister Vladimir Putin about the suddenness of the crisis, about the conspiracy of external forces, and the ability of the Russian government to minimize the costs of the crisis. By the way, if in countries of developed economies the fall of stock markets was within 8% -15%, then in Russia by the autumn of the same year the stock market practically collapsed by 51% and then continued to fall.

This drop compared to the western recession was Russia's flight without a parachute, while the US and European adversaries were smoothly parachuting into recession. Since May 19, 2008, the total capitalization of Russian companies listed on the Russian stock market has fallen by almost $800 billion. Russia has squandered a stabilization fund of more than $600 billion over the course of two years, most of which it planned to use to modernize its army.

The fall could have been more painful if Putin had not succeeded in consolidating society in the context of the unfolding crisis and enlisting the support of the majority of the Putin-Medvedev tandem. Such a factor in the rapid and high growth in the popularity of the tandem in the context of the unfolding financial crisis was the war against Georgia. The lightning and victorious war over little Georgia brought euphoria to the ranks of the Russians, who saw Russia rising from its knees. Opinion polls testified to revanchist sentiments in Russian society - a rating of 88% became support for Putin's militant actions.

It was this victorious war and the show of force that balance the mood of discontent in Russian society falling into crisis.

At that time, many expected the spread of Russia's military expansion to the entire territory of Georgia, but Russian troops stopped 40 km from the country's capital and then retreated, leaving Abkhazia and Ossetia in their possession. Just at that time  it  was stated that Russia was in need of foreign investment. In the next 10 years, according to the International Finance Corporation, Russia needed at least 1 trillion dollars of investment. And they started doing it. Russia received an average of about 100 billion dollars of foreign investment per year. Last year they grew by 10% and amounted to 170 billion dollars.

But the failure of all economic projects, including the Olympic Games in Sochi, brought Russia to the brink of bankruptcy. The  current year 2014 has been declared the year of the strongest fall of the economy to default. It is not difficult to imagine what consequences and threats the unfolding crisis brings to the country. Large-scale job cuts, and especially in the regions, the process of which has already begun, the curtailment of social programs, evoke a revolutionary atmosphere in Russian society. It becomes clear that without serious and large-scale economic assistance from the West, Putin's government will not be able to overcome this crisis. It is difficult to say how much Moscow is asking Washington today and what it is demanding in return. We have no information about the closed talks between the Kremlin and the White House. But one thing is clear, the stakes are very high. If during the period of the Georgian military campaign it was about 1 trillion dollars for 10 years, now the amount should not be less and should be presented in a shorter period.

Tense relations  prior to the Sochi Olympics indicate that the parties were unable to reach a denominator on the amount of assistance required, although at the height of the Maidan revolution, Putin's statement that the European Union is capable of resolving the crisis without Russia shows that the parties were close to mutual understanding, and especially on the issue of urgent anti-crisis assistance to Russia.

As in the case of Georgia, Putin had no choice but to start aggression under the pretext of protecting the Russian-speaking population, first in Crimea, in order to blackmail the West. The subsequent course of events will depend on whether Putin can meet the needs for foreign assistance, or whether he will break under the pressure of Western consolidation. The latter is unlikely, because in this case he will appear before his people as a weak leader, unable to lead the country out of the crisis, and for the world community Russia will appear as a state that has completely lost its imperial attributes. Putin's retreat will be not only his personal defeat, but also the global defeat of Russia, where the country's self-destructive processes can begin. On the other hand, the United States is hardly interested in the beginning of a global Russian crisis with the threat of internal destabilization and disintegration of the country. This is possible as an extreme measure with unpredictable consequences, because the world is dealing with a state stuffed with nuclear weapons scattered over the vast territory.

Variable manifestations of rays of hope for the possibility of resolving the Ukrainian crisis from Russia and Europe indicate that intensive negotiations are on the verge of a foul. A couple of days ago, US President Barack Obama had a 90-minute conversation with Putin about the situation in Ukraine. Talking about Ukraine for an hour and a half is too long a period of time for busy people who are concerned with promoting the interests of their countries far beyond the Ukrainian issue. Interestingly, after the negotiations, the baton passed to German Chancellor Angela Merkel, who was more comfortable speaking face-to-face in German with Putin, despite the remote distance. In her revelation to Obama following a telephone conversation with the Russian leader, Merkel indignantly admitted that Putin was inadequate and had lost his sense of reality. Merkel did not say how much this reality of Putin is estimated. But this is not the end of the conversation. A statement from Moscow that the Russian president has not yet made a decision to send troops to other parts of Ukraine, and US Deputy Secretary of State Victoria Nulad's optimistic admission that there are ways to negotiate, indicate that bargaining is in full swing. Another thing is how much it will cost to resolve the crisis with options: a temporary loss of Crimea by Kiev or the return of the peninsula to the bosom of Ukraine.

From assessments of the economic situation in Russia:

Analysts of the Russian stock center "Infina": "The Russian economy is slipping more and more into a depressed state. Its main indicators are the lowest over the past five years, despite high oil prices, a weakening ruble and increased budget spending, and so far, there are no prerequisites for reversing this trend. The Russian economy will continue to slow down in 2014. There is no talk of any 3% GDP growth. Experts' basic forecasts are in the range of 0-1.7%."

Uralsib analysts: "In the second quarter, the economy will enter a recession phase. Inflation will be 5.5%, and the average annual price of Brent oil will drop to $98 per barrel. In 2014, the growth of wages in the public sector will practically stop, and the growth "The chronic loss of competitiveness in terms of costs will lead to a transition from the stagnation of industrial production to its outright decline, as well as to a further deepening of the decline in investment."

Vasily Koltashov, head of the Center for Economic Research at the Institute of Globalization and Social Movements: "A negative scenario may be associated with a fall in oil prices, which is not so difficult in principle - it is enough to stop the blockade of Iran. If the United States is interested in lowering oil prices, they will simply let Iranian raw materials to the world market. - It is possible that the ruble will fall further in 2014, when the Olympics are over. The companies in the  capital  slowly began to lay off staff, this process is underway, but it will be announced a little later. But in the regions, it seems that there will be more layoffs "Now they concern mainly the sphere of production, and this is a very large proportion of Russians employed in the regions. Then there will be the banking sector."

Business Life magazine: “Local unrest that took place in different regions of the country throughout the 2000s can only be the first “swallows.” If this boiling cauldron explodes, it will not seem enough to everyone from the history books. If the influence of these negative factors coincides in time - and according to the law of meanness, this usually happens - then Russia will face hard times and even a default. Perhaps this will happen in 2014."

Renaissance Capital economists Ivan Chakarov and Natalya Suseeva: "Growth in Russia will slow down dramatically in 2014."

The consensus forecast of the Prime agency: "Most experts do not expect anything particularly good for the Russian economy from 2014, next year will look like a disastrous outgoing one in all key parameters."

Director of the FBK Institute for Strategic Analysis Igor Nikolaev: "2014 will be worse than 2013, but better than 2015."

Former Russian Finance Minister Alexei Kudrin: "2013-2014 will be the 'worst' years since 2000, not counting the crisis years. This is due to the fact that the old economic model has outlived its usefulness, and the new one has not yet worked."