Vladimir Putin’s plans to freeze Europe in warm weather fade as his economy struggles with headwinds

from Western sanctions. As Europe experiences record high temperatures, the Kremlin is feeling the heat of Western sanctions. In January, eight countries in Europe recorded all-time high temperatures, with Warsaw recording 18.9°C, while the average for this time of year is usually just 1°C. Russia had hoped that the long, cold winter would increase demand for its gas, raising prices and strengthening its influence in Ukraine. However, by the end of 2022, gas prices had fallen to pre-invasion levels and Russian pipeline exports to Europe had fallen to levels not seen since the 1990s. Several explosions on the Nordstream pipelines connecting Russia to Germany only exacerbated the situation. At first, Western world leaders blamed the Kremlin for the attacks, while Moscow has accused the British Royal Navy of sabotage, which the London government denies. Last September, the Nord Stream gas pipeline leak caused bubbles to appear in the Baltic Sea. Despite the easing of gas export problems, the Russian economy appears to be doing better than expected. Although it is forecast to fall by 0.8 percent this year, the Kremlin’s coffers have tempered the high prices customers have paid for goods for most of 2022. Western countries hope this will change soon. After the invasion of Ukraine in February 2022, Western leaders quickly began imposing sanctions, promising to destroy the Russian economy. The sanctions were wide-ranging, placing restrictions on Russia’s financial system, its oil and gas exports, its imports of luxury goods and some individuals. Shrinking Russia’s war chest will never be a quick process because of national resources, said Tom Keating, founding director of the Royal Joint Services Institute’s Center for Security Studies and Financial Crime. “It’s a fact of life that we will continue to fund the Russian war machine for the foreseeable future,” he told ABC. “But we have to do everything we can to limit it. Obviously, things like capping oil prices are a welcome next step in reducing Russia’s earnings. Russia has been able to continue funding its war machine despite Western sanctions.(Reuters: Alexander Ermoshenko) The oil price ceiling agreed by the G7 countries and Australia prohibits buyers from paying more than $60 a barrel for Russian oil. This prevents insurance and shipping companies from getting involved in shipments that violate the embargo. Since the policy took effect in December, the price of Russian oil has fallen by 20 percent. Countries like China and India defy the restrictions and still buy Russian oil, but it is offered at a discount to attract buyers. Keating said that even countries that do not support Russian sanctions will not pay more for goods than they have to. “The oil price ceiling has imposed restrictions on Russia using countries that do not support sanctions,” he said. To balance its budget, the Kremlin needs Russian oil to trade at around $70 a barrel. It was trading near $50 in January, and unless it improves, Russia’s war chest could be limited. However, Moscow has already shown it is ready to dip into its national wealth fund to fill any gaps. So to apply more pressure, some EU countries, including Poland, Lithuania and Estonia, will argue for a lower price ceiling when it comes up for review in the coming weeks. Russia is subject to several rounds of Western sanctions targeting individuals, financial markets, banks, imports and exports. It is designed to curb Russian arms production and increase pressure on Vladimir Putin’s regime. Western sanctions are designed to put pressure on Vladimir Putin and his war in Ukraine.(Reuters: Russian Ministry of Defense) However, Mr Keating said they were far from perfect. “There are a lot of loopholes in the system,” he said. He pointed to financial centers such as the United Arab Emirates and countries such as Turkey, South Africa and India, which continue to provide “enormous favors” to Russia. “I think 2023 should be about these countries realizing that it is not in their interest to provide Russia with these types of facilities and services to avoid sanctions,” he said. Putin said Russia’s economy has proven resilient. “The economic situation is stable,” he told Russian state television on Sunday. “Much better than our opponents expected, but also what we expected. “Unemployment is at a historic low. Inflation is lower than expected and, most importantly, it is on a downward trend.” Sanctions have little effect on societal resilience in Russia, said Gulnaza Sharafutdinova, professor of Russian politics at King’s College London. “We’ve seen quite a creative adaptation of the Russian economy and Russian society,” she told ABC. Russia circumvents sanctions with clandestine imports and fake brands Western countries hope that by preventing Russia from buying computers and semiconductor chips, they can prevent the production of high-tech weapons. However, Professor Sharafutdinova said Russia still had access to goods through third countries such as Armenia and Kazakhstan. Russian businessmen go to [there] tt [back] “Phones, computers or monitors,” she said. Therefore, all these things were returned to Russia and sold, despite the sanctions. Household appliances such as washing machines are also common in Russia, which can provide some of the components needed to manufacture weapons. The US government has announced that washing machine and refrigerator parts were found in Russian weapons recovered in Ukraine. But the sanctions are beginning to affect some sectors, particularly those unrelated to the ongoing war effort. Russia’s auto industry collapsed by about 60 percent in 2022 due to component shortages, and its famous Lada brand also stopped providing some vehicles with airbags. The airline industry is also feeling the brunt of the sanctions, with national carrier Aeroflot reportedly now scrapping older planes for spare parts. Many of its planes are manufactured by the American company Boeing or Airbus, which is based in Europe. Meanwhile, hundreds of Western brands that left Russia appear to have been replaced by shadowy domestic brands. The empty space left by McDonald’s, which left Russia for good after 30 years in May, has been filled by a fast food chain called Tasty. Other events were less creative, with Cool Cola replacing Coca-Cola and Star Coffee replacing Starbucks, complete with similar color schemes. After the departure of Starbucks from Russia, a new cafe called Stars Coffee appeared.(Reuters: Maksim Shemetov) Although the West has called the exodus “the end of an era”, Professor Sharafutdinova said the withdrawal of the trademarks had not changed public opinion as some in the West had hoped. “For those who found it very important to go to Zara and buy McDonald’s or … Starbucks, [they’ll] it has affected.” “But if we’re talking on a large scale: your country and your victory … instead of going to McDonald’s or Tasty’s – it won’t make much difference.” She said the young Russian crowd is doing more to change people’s minds. “People lose their children, brothers or husbands,” she said. “They have this sense of loss and … that the war is going nowhere. Its victory is unattainable. That the state and the army are somehow impotent.” “Thus the belief in a quick victory was dispelled.” Soon after Putin’s forces invaded Ukraine, many Western companies left Russia.(Reuters: Anton Vaganov) However, Vladimir Putin is determined to keep Europe in a state of warm weather, and he is actively looking for ways to circumvent the sanctions. He has made it clear that his government will not back down and will continue to defy the West. Putin has also been able to tap into Russia’s national wealth fund to fill any gaps in his budget, and he has been able to find loopholes in the sanctions system. He has also found ways to clandestinely import goods, and has replaced Western brands with fake ones. Despite the sanctions, Putin’s war chest remains full, and his economy is doing better than expected. Western countries will continue to pressure Russia with sanctions, but it is clear that Putin is determined to keep Europe in a state of warm weather.