Kremlin lacks money for the regions, the regions lack money for mercenaries

Added: 2026-05-19

[00:00:05]The regions of the Russian Federation have record debts and budget deficits, and the Russian armed forces have the lowest rate of procurement of mercenaries in 2 years.

[00:00:14]What is the connection here? Who will now be milked and why the Russian authorities themselves have started to scare Russians by saying that this is just the beginning Union learned.

[00:00:24]Everything is still going according to plan for the Kremlin, but more and more Russians are starting to wonder what other surprises this plan has in store for them.

[00:00:33]And not just ordinary, excuse me, liberals who secretly hate Putin, but the entire scatholic core of the population, that which is outside politics.

[00:00:43]Military scoundrels and sloggers are also howling in the swamps, >> [music] >> frankly nostalgic for the times of Prigozhin's rebellion.

[00:00:51]And that's all well and good.

[00:00:53]But the main thing now is that the difficult situation was discussed at [music] the top of the Russian gerontocracy, directly in the Ministry of Finance, which is paying for this whole [music] story, of course, not itself, but from taxes from tsarist subjects.

[00:01:08]The betrayal came from nowhere, the government itself is discrediting the government.

[00:01:13]We've lived to see this crisis knot its way into the public dimension in somewhat detours through local [music] budgets, which have become a clear manifestation of the saying, where there is thin, there it breaks.

[00:01:25]Local authorities can no longer hide the state of affairs with regional budgets, and the central government that there is no money to save all regions.

[00:01:34]Russian Finance Minister Siluanov directly stated this.

[00:01:38]The piquancy of the situation is added by the fact that the lion's share of the insane one-time payments under contracts with the Russian Ministry of Defense were paid by local budgets.

[00:01:48]Experts [music] explained to Union the essence of stagnant processes in Russian finances, and whether we [music] should soon expect the the of the Russian economy by analogy with the Soviet one, where the regions were also the first to fail.

[00:02:01]According to the head of the Russian Ministry of Finance, [music] the deficit of consolidated budgets of the Russian Federation subjects will increase from last year's 1.54 trillion to 1.9 trillion rubles by the end of 2026.

[00:02:16]And this is all according to an optimistic scenario.

[00:02:20]Siluanov also says that in 2026, local budget deficits will [music] increase by 27%, but during 2025, they have already soared five times compared to 2024.

[00:02:32]Last year, 73 out of 89 Russian regions had deficit budgets, while in 2024, there were only 49 of them.

[00:02:41]At the same time, the state debt of the regions reached 3.5 [music] trillion wooden, and the debt to commercial banks, 1.3 trillion.

[00:02:49]Moreover, he noted that debt servicing is becoming a burden for the regions, because these payments already [music] account for 19% of all local tax revenues.

[00:02:59]It would seem that it's not scary, not critical, but we have special [music] concerns about individual subjects of the Russian Federation, the Minister of Swamp Finance [music] added, hinting at 20 problem regions that he motivated to cut spending.

[00:03:13]It is also interesting that the donor regions, including Moscow, are increasingly suffering from the crisis in local budgets.

[00:03:21]We see that the main increase in the deficit has come from donor regions, Siluanov added, urging them to prioritize and consolidate their budgets.

[00:03:30]This is despite the fact that the Moscow authorities have already announced a 10% reduction in investment payments and a 15% reduction in civil servants.

[00:03:40]Other officials who were also present at the meeting with the Minister of Finance [music] added color to the crisis.

[00:03:46]In particular, the head of the Federation Council Budget Committee, Artamonov, [music] reported that the problem arose due to the fact that 68% of the saved funds are forced to spend on the SVO.

[00:03:58]That is, [music] at this meeting both the consequences and the cause Putin's war were voiced.

[00:04:04]Earlier, there were reports that even rich regions no longer have enough money for SVO veterans.

[00:04:10]And why did Russian officials dare to do this?

[00:04:14]Because even without such radical expressions, such as [music] crisis, the top leadership of the aggressor state quite frankly admits how bad things are there and even predicts a worsening of the situation.

[00:04:25]Moreover, Siluanov directly says that the statistics of local budgets are optimistic, that is, they do not correspond to reality.

[00:04:34]What made them so suddenly melt that they are publicly throwing out a whole bunch of betrayals?

[00:04:39]Without specialists, it is impossible to understand this.

[00:04:43]Yaroslav Romanchuk, an economic expert and president of the International Institute for Freedom, believes that the very fact of such public statements is a sign of between the center and the regions.

[00:04:54]This story may be of a purely departmental nature.

[00:04:58]After all, Siluanov himself is also part of this tug-of-war within the framework of the government's macroeconomic decisions.

[00:05:06]The Ministry [music] of Finance wants to get more funds to close its holes.

[00:05:10]And to do this, it tells local budgets that there is no money for you.

[00:05:15]These statements are a manifestation of disputes between various departments and organizations [music] on the one hand and the Ministry of Finance of the Russian Federation on the other, which need dwindling funding, the expert believes.

[00:05:28]That is, the federal budget will no longer grow, there will be no additional funds for various programs, and transfers [music] to local budgets will be reduced.

[00:05:37]And now the process of struggle for the trough is underway. Who will be left?

[00:05:41]Who will be pushed aside? Who will receive more and who will receive less?

[00:05:46]There is not enough money for everyone, Mr. Romanchek notes.

[00:05:50]Siluanov himself does not want to be a switchman, and that is why he makes such statements.

[00:05:56]I believe that in this way Siluanov can dig under Mishustin.

[00:06:00]Because it is Mishustin who will become the person [music] on whom they will shed responsibility for all the problems of the Russian Federation, on whom they will pour out all their anger.

[00:06:09]They are already looking for someone to blame.

[00:06:12]In his opinion, Mishustin is a technocrat who has been in power for a long time and promised to keep the situation under control, but failed to do so.

[00:06:21]And therefore, he is the best candidate for the switchman.

[00:06:25]Ilya Neskhodovsky, a freelance expert at the ANTS National Interests Protection Network, reminds Yunian that local budgets are formed primarily from personal income tax and, to a large extent, from corporate income tax.

[00:06:39]Due to the significant deterioration of the economic situation in the Russian Federation, >> [music] >> income tax revenues have fallen significantly.

[00:06:48]This was the first bell for the budgets of the regions of the Russian Federation.

[00:06:53]Enterprises are increasingly reducing either their staff or their salaries.

[00:06:58]As a result, income from personal income has fallen.

[00:07:01]This has further reduced the revenue part of regional budgets.

[00:07:05]And now they can no longer get out of this situation.

[00:07:09]Because, [music] as an economic expert says, to get out of it, you need to stimulate economic activity in the country, and this is impossible against the backdrop of a reduction in the federal budget.

[00:07:20]Plus, the federal and local budgets are starting to compete with each other for taxes.

[00:07:26]The discount rate of the Central Bank of the Russian Federation is also quite high.

[00:07:31]Today, the Russian Federation no longer has any internal reserves. Sanctions restrict the activities of relevant enterprises. [music] The effective demand of the population has fallen significantly, and so on.

[00:07:44]Instead, the income tax has increased, but the one that is transferred to the federal budget, continues [music] Ilia Neskhadovsky.

[00:07:51]They cut capital expenditures even earlier, and therefore they will now save on the people themselves.

[00:07:57]They are already delaying the salaries of teachers, doctors, [music] etc. This is one of the ways to postpone the problem that is brewing.

[00:08:06]Yaroslav Romanchuk says that Russia is now calculating the balance of losses and gains.

[00:08:12]In particular, the results of the above-mentioned campaign to increase taxes, [music] which did not play out as the Kremlin expected.

[00:08:20]Regarding taxes and plucking geese, the Russian Federation has certain analogies with us, because in Ukraine, they are also trying to raise taxes.

[00:08:29]But the system there is much stricter.

[00:08:32]However, at this stage, I think they will not be able to increase taxes even more, because Russians will no longer pay.

[00:08:39]This is not a disciplined Germany.

[00:08:42]Everyone will simply go into the shadows, says Mr. Romanchuk.

[00:08:46]The expert assures that Putin is only concerned with replenishing the troops, and [music] he doesn't care how it will be ensured.

[00:08:53]In fact, the inability to do this now leads to loud statements about problems in power. After all, if the task is not completed, then the search for the guilty begins, which brings us back to the statements of Siluanov and other officials.

[00:09:07]Putin will milk the business of the regions' force owners to take money and volunteers from enterprises.

[00:09:13]As many [music] as the enterprises were told, they must provide as many mercenaries and pay them.

[00:09:19]At the same time, they will milk the biggest billionaires [music] who have doubled in number in the Russian Federation during the war.

[00:09:26]The next level, Nabiullina, will be pressured to finance certain programs.

[00:09:31]That is, for now there is still money that the Kremlin's tentacles can reach, [music] adds Mr. Romanchuk.

[00:09:37]In addition, even in the event of a new mobilization, [music] there will be no economic collapse because the share of state spending in the Russian Federation has not yet exceeded 40% [music] by the end of 2025.

[00:09:50]In Ukraine, for comparison, [music] this figure is over 75%.

[00:09:55]However, Ukraine has external financing, which Russia does not have.

[00:10:00]But there is oil there.

[00:10:02]That is, they still have the resources to survive. [music]