Jens Asbjørn Bøgen
Since launching its 2022 invasion of Ukraine, the Kremlin has insisted Western sanctions hurt Europe more than Moscow — but rising inflation forecasts, rate holds, and a widening deficit tell a different story.
Vladimir Putin spoke to Russian state television on Sunday with the economy visibly under strain. He used the appearance to repeat a familiar Kremlin claim: that European restrictions on Russia had hurt Europe more than Moscow.
Speaking to Kremlin pool reporter Pavel Zarubin on October 25, Putin dismissed Europe’s sanctions regime as “foolishness,” claimed foreign firms that withdrew from the country had left reluctantly, and promised better conditions for the ones that stayed.
The remarks were carried by state outlet Izvestia.
“Banning everything related to Russia is foolishness,” Putin told Zarubin, according to the translation published by Ukrainian outlet 112.ua. The president added that when European companies left under pressure from their own governments, “our friends in those countries were nearly in tears.”
Putin said Moscow aims to create “suitable and supportive conditions” for the Western firms that stayed. He did not name companies, but a series of recent presidential decrees have placed the local assets of Nestlé, Auchan, Metro, Leroy Merlin and other foreign groups under temporary Russian management.
A rate held at 14% and a wider deficit
The timing is awkward for Putin’s “foolishness” line. Two days before the interview, the Bank of Russia held its key rate at 14% and revised its 2026 inflation forecast upward to between 7.1% and 7.6%, pointing to persistent price pressures exacerbated by motor fuel disruptions.
Meanwhile, Ukrainian intelligence assessments published by United24 Media estimate Russia’s federal deficit reached roughly $61 billion in the first nine months of the year, alongside Russian Finance Ministry revisions widening the projected 2026 shortfall.
The draft budget for 2027 sets another 5.5 trillion ruble deficit, on expenditures of 48.8 trillion rubles against revenues of 43.3 trillion.
A softer line from Washington
Putin’s remarks also come at a moment when US pressure has eased. On October 16, US President Donald Trump signed an executive order waiving the Lindsey O. Graham Sanctioning Russia and Iran Act, which Congress passed in September with Senate and House majorities of 86 to 11 and 262 to 159.
The order was issued the day before the law was set to take effect and shields a separate US arrangement to import Russian diesel. The Treasury general license covering those shipments runs through April 7, 2027.
