In February, Putin and his assistants decided that Russia's economy would survive the annexation of Crimea

The president and his entourage decided that foreign exchange reserves are large enough to suffer the consequences of possible sanctions and Western countries will not persist.
In February of this year during the Olympic Games, President Vladimir Putin in Sochi, a secret meeting with close aides to discuss the question of whether Russia's economy will survive the deterioration of the situation, which may follow as a result of the annexation of Crimea, Bloomberg reported. According to two officials who participated in the discussion, which refers to the agency assistants assured Putin that Russia is rich enough to postpone the financial implications of a possible invasion of Ukraine.

enough money

Three government officials have characterized the February debate on this subject as decisive in determining the position of Putin to Ukraine. He said that Russia has enough foreign currency reserves to annex the Crimea and to withstand the sanctions that may ensue. According to these three officials, who spoke to Bloomberg on condition of anonymity, if not a significant amount of reserves that Russia accumulated during good economic times, Putin could not decide on the actions that he then undertook the Ukraine.

"For Putin's reserves, towhich matured Russia has accumulated over the last 14 years, equivalent to political power ", - he told Bloomberg, former Finance Minister Alexei Kudrin.

Putin's spokesman Dmitry Peskov declined to comment agency.

A series of meetings on this subject took place before as a result of the confrontation with the demonstrators, hold the maidan, the President of Ukraine Viktor Yanukovych has left Kiev, and then with the help of Russia - and the country. Winter Olympic Games were held from 7 to 23 February, Yanukovych disappeared from Kiev on the night of 22 to 23 February. March 1, Putin turned to the Federation Council for permission to use the armed forces of Ukraine and got it.

When Western governments began to condemn Russia for its annexation of Crimea, Putin said the councilors, that in the end they will accept it, writes The Wall Street Journal. According to people who spoke with him at the time, Putin was confident that the close relations established during the previous years with the countries - major trade partners such as Germany, will reduce the negative economic consequences.


Eti expectations were wrong, say Bloomberg and the WSJ. The sanctions cut off Russia from the western capital markets and technology have led to a sharp reduction in business and trade cooperation. In addition, the impact on the Russian economy, which is teetering on the brink of recession, has put the oil market. Falling oil prices since June, 40% was the result of its surplus on the world market, formed largely as a result of the rapid growth of production in the United States because of the shale boom.

Russia's relations with Germany, as well as personal relations heads of state, strongly deteriorated. If at first Chancellor Angela Merkel called for caution in the matter of sanctions, it then became their main driving force. "We are suddenly faced with the conflict that affects, so to speak, the essence of our values. We can not allow to validate the old thinking in terms of spheres of influence, when violated international laws ", - said Merkel in November.

It worsened the situation with the foreign exchange reserves. According to the Bank of Russia, the end of January the international reserves stood at $ 498.9 billion. According to the latest information (December 12), theyIt was $ 414.6 billion, while they turn on the gold reserves ($ 45 billion) and funds in two funds controlled by the Ministry of Finance - National Welfare Fund ($ 82 billion) and reserve fund ($ 89 billion).

In October, when the fall of the ruble was taken precipitous nature of the Central Bank spent in support of the national currency of about $ 30 billion. He then announced an early transition to a fully floating exchange rate (previously it was planned to do in 2015) and on 10 November did not intervene in the situation in the the foreign exchange market. In December, the Central Bank, according to the information on its website, has spent $ 10.3 billion for this purpose.

According to the six economists surveyed by Bloomberg, the Central Bank may spend another $ 70 billion to defend the ruble. Putin, however, today during a press conference, supported the position of the Central Bank, which decided "not to distribute reserves and do not burn them on the market and to go to extend credit."

The economy slides into a crisis

The US and EU began to impose sanctions against individuals in Russia, Ukraine, and in March, in the Crimea, then restrictions and bans affected Russian and Crimean companiesand businessmen close to Putin. With the end of July, the US and the EU have held several rounds of sectoral sanctions effectively cut off from the western capital markets major Russian energy companies and banks. Many Western banks have stopped working with Russian counterparts, even with those who did not get in the sanctions lists, and Russian companies have lost access to foreign currency funding abroad. Purchase of currency in the country, including for the purpose of repayment of external debt, as well as increasing pressure on the ruble due to the decline in oil prices accelerated the depreciation of the ruble, which has resulted in a full-blown currency crisis and panic among the population.

Since the beginning of the year to 17 December the dollar against the ruble rose by 83.4%, the euro - by 65.7%. At the auction on 16 December the euro reached 100 rubles, and the dollar -.. Almost to 80 rubles today, as of 17:00 MSK, the rate was 75.05 rubles. and 61.1 rubles. respectively.

In the spring, when Western countries began to impose additional sanctions, some Russian officials have become aware that their side effects in the form of reduced business activity is stronger than assumedaxis. But Putin virtually ignored their appeals on the subject, told the WSJ, people familiar with the discussions. "There was a feeling that was foreign policy priority and that it can be carried out without causing more harm to the economy", - says the adviser to the Kremlin. The main trusted Putin's party at this time, according to Kremlin insiders and diplomats, security forces began, including Defense Minister Sergei Shoigu and Director of the FSB Alexander Bortnikov. The realization that a crisis, came to power in November - early December, said the WSJ Kremlin adviser.

Central Bank recently calculated the scenario of economic development at an oil price of $ 60 per barrel: in 2015-2016. GDP will shrink by 4.5-4.7% and 0.9-1.1%, respectively. Russia is facing a recession this year, and maybe in 2016, said chief economist Vladimir Tikhomirov FG BCS. According to the forecast the chief economist at Alfa Bank, Natalia Orlova, due to an increase in the key rate of the Central Bank Tuesday by 6.5 percentage points to 17% decline in the economy may reach 5% in 2015 on the night.

Putin also at the press conference assured that the economic situation will remain volatile near villageVuh years, but then certainly normal. Moreover, in his opinion, is the most pessimistic variant, the situation may start to improve before. Putin believes that the deterioration in the economy triggered by external factors.

Partnership President of the "new economic growth" Mikhail Dmitriyev said earlier "Vedomosti" that the Russian economy has entered a period of at least three years of stagnation due to structural limitations, even if you do not take into account the sanctions and falling oil prices. "We are ready to the crisis", - admitted in an interview with the Minister of Economic Development Alexei Ulyukayev.