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Commentary | 13 February 2015

The Ukraine Crisis and the Russian Economy

Image of Ben Aris

Ben Aris |Editor-in-Chief at Business New Europe

Economy Energy Russia Sanctions Ukraine Euro-Atlantic Security

The combination of Western sanctions and an oil price collapse has inflicted a great deal of pain on the Russian economy but the latest opinion polls still show 85 per cent support for Putin and there is debate over just how much of an economic collapse Russian may be facing. In this context, the European Leadership Network invited two leading experts to offer their analysis on the outlook for Russia’s economy. This is what they said:


Wither Russia: collapse and default on the cards for 2015? by Ben Aris
Ben Aris, editor-in-chief at Business New Europe, argues that Russia is not experiencing a ‘crisis’ in the same way it did in 1991, 1998 or even 2008. Prudential saving of petrodollars and a triple surplus (trade, current account and budget) endows Russia with the financial fire-power to stave off default and collapse. The real risk for the Russian economy is stagnation, and the absence of large-scale reform.


Will the crisis be a wake-up call to reform the Russian economy? by Chris Weafer
Chris Weafer, founding partner of Macro-Advisory, argues that the events of 2014, namely sanctions and an oil price collapse, didn’t cause Russia’s problems, they just exacerbated them. Russia can meet its obligations in 2015, and should avoid collapse, but business leaders are hoping that 2015 will finally see a more serious reform effort.


The opinions articulated above represent the views of the author(s), and do not necessarily reflect the position of the European Leadership Network or any of its members. The ELN’s aim is to encourage debates that will help develop Europe’s capacity to address the pressing foreign, defence, and security challenges of our time.