Ariel Cohen
The incoming Trump administration doubtless wants a strong hand to begin negotiating with Russia on peace with Ukraine. Moscow is providing an opening with its precarious economic situation. Despite Putin's chipper tone in his annual marathon press conference on Dec. 19, in which he challenged the West to a "high-tech duel" over Kyiv, critics raised questions about his grip on reality. His multi-billion-dollar spending on his war on Ukraine is unsustainable, and Russia's economic situation is getting worse. Ursula van der Leyen, EU Commission president, has suggested to President-elect Donald Trump to replace Russian LNG with imports from the U.S. The Kremlin would lose $ 12 billion as a result.
Russia's soaring inflation, capital flight, and exodus of oligarchs—may cause a painful recession in 2025. The Trump administration should not rush to negotiate with the Kremlin. Instead, it should let Russia's pending economic crisis play out. Strategic patience will likely soften Moscow's position and ensure better outcomes.
Since the war began in 2022, Russia has defied ominous predictions of collapse. Despite Western economic sanctions, the nation's economy—boosted by massive currency reserves—has proved stronger than expected during the three years of war. After an initial 2.1 percent decline in GDP in 2022, the number rose to 3 percent to 4 percent in 2023. This year, the government forecasts a 3.9 percent expansion.
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