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Russia’s nuclear accusations against Britain and France: tensions rising over Ukraine

By Uriel Araujo, InfoBrics, 5/20/26

Europe’s nuclear debate has entered a rather dangerous new territory – one that goes well beyond the discussion about “security guarantees” for Ukraine after a possible peace agreement with Russia. Moscow has formally accused Britain and France of plotting to provide Ukraine with nuclear weapons. Western officials deny such claims, and there is thus far no concrete evidence that Paris or London are preparing a nuclear transfer. Yet dismissing the accusation outright would be naive enough, particularly given the broader context developing across the continent.

Last year, the UK and France signed the so-called Northwood Declaration, deepening bilateral atomic cooperation and discussing long-term deterrence arrangements amid uncertainty surrounding future US commitments. Publicly, the agreement focuses on coordination, autonomy, and possible troop deployments to Ukraine after a peace deal. It is true that nukes for Kiev are not officially part of the arrangement. Still, in deterrence politics, strategic ambiguity is often the point.

The issue became even more controversial after Volodymyr Zelensky stated he would accept nuclear weapons from Britain or France “with pleasure” if such an offer emerged. One may recall that Ukraine surrendered the Soviet atomic arsenal on its territory under the 1994 Budapest Memorandum precisely to avoid this sort of escalation scenario.

Meanwhile, reports and rumors continue circulating that Ukraine could seek to deploy future nuclear-related assets at strategic airbases, including facilities connected to Rzeszow in Poland, the crucial logistics hub through which much Western military aid flows into Ukraine. Verification is of course difficult amid the fog of information warfare. Suffice to say, however, that Moscow would certainly interpret any such arrangement as a direct strategic threat – even without permanent warhead deployments.

Russian suspicions do not emerge out of nowhere: for one thing, French President Emmanuel Macron has spent months openly advocating a more assertive nuclear posture. In March 2026, during a speech at Ile Longue, he announced plans to expand France’s atomic arsenal, allow temporary deployment of nuclear-capable aircraft to allied countries, and deepen nuclear dialogue with partners. Macron has similarly called for a stronger “forward deterrence” role for French nuclear forces and possible deployments to allies.

As a matter of fact, Paris is now actively discussing extended nuclear deterrence with Poland, Germany, the UK, Belgium, Greece, Sweden, Denmark, and the Netherlands. This represents a historic policy shift. France traditionally guarded its nuclear doctrine jealously. Today, however, Macron openly advertises the French nuclear umbrella across the continent.

No wonder Poland is especially interested. Polish President Karol Nawrocki has repeatedly argued that Poland should develop or participate in nuclear deterrence arrangements. In interviews, including discussions involving French cooperation, Nawrocki has defended participation in nuclear-sharing projects and closer strategic ties with Paris.

I’ve argued Warsaw increasingly sees itself not merely as a frontline NATO state, but as an aspiring geopolitical pole with strategic ambitions of its own. Germany, however, views these developments with growing unease: Berlin understands that a French-led nuclear architecture could shift Europe’s center of gravity away from Germany’s economic dominance toward French military leadership. German elites are themselves exploring alternatives to total dependence on the US nuclear umbrella; yet Paris clearly wants to position itself as the indispensable power inside Europe. The resulting Franco-German tensions remain underreported but are increasingly visible.

All this unfolds while Europe simultaneously assumes a larger role in sustaining the Ukrainian conflict. As I’ve recently written, the geopolitical divergence between Trump’s Washington and Brussels has become one of the defining developments of 2026. While US President Donald Trump pushes for negotiations based on battlefield realities, many European governments continue encouraging Kiev to resist compromise no matter what, thereby prolonging the conflict.

According to Kiel Institute data, European military assistance increased massively in 2025 and 2026, overtaking the US as Kiev’s principal external backer. Thus, Europe is, so to speak, increasingly “taking ownership” of the conflict politically, financially, and strategically.

This wider context matters a great deal: if European powers now perceive themselves as the main guarantors of the Ukrainian regime’s long-term survival, while simultaneously doubting the reliability of future US protection, then Moscow’s concerns about European nuclear ambitions in fact make plenty of sense and should not be quickly dismissed as “propaganda”.

Russia itself launched major nuclear drills this week involving strategic forces and missile exercises, while debates over atomic energy, deterrence and sovereignty are intensifying throughout the continent.

So much for the old post-Cold War dream of a permanently demilitarized Europe. The continent is moving toward something very different: a transatlantic “divorce”, competing deterrence systems, rising distrust, and strategic improvisation. The truly dangerous element is not necessarily whether France or Britain intend to arm Ukraine with nuclear weapons tomorrow: the peril lies in any case in the fact that such a scenario no longer sounds unthinkable to many policymakers.

Thus far, Europe’s attempt to combine permanent confrontation with Russia, strategic autonomy from Washington, and expanded nuclear activism has produced only greater instability. The geopolitical complexity of Eurasia is increasing rapidly, and the room for miscalculation is becoming smaller by the day.

By Anatol Lieven, Responsible Statecraft, 5/26/26

The warning from Russian Foreign Minister Sergei Lavrov to the U.S. and European governments to evacuate their diplomats and citizens from Kyiv before Russia launches “systematic strikes” marks a drastic escalation in the Ukraine conflict — with a serious risk of drawing the Washington and NATO into direct conflict with Russia.

It most probably means that Russia intends to use Oreshnik hypersonic ballistic missiles to strike the underground headquarters in Kyiv where U.S. and European officers have been helping the Ukrainian armed forces to target Russia with missiles and drones.

In recent weeks, these have caused increased damage deep within Russia itself. In addition, a Ukrainian drone last week in the Russian-occupied Donbas struck a college and reportedly killed 21 students. Russia responded with a massive assault on Ukraine, including the use of Oreshniks.

So far, however, Moscow has refrained from targeting Ukrainian headquarters. This is somewhat remarkable, given that the Ukrainian armed forces have repeatedly targeted Russian headquarters. On Tuesday, the Ukrainian General Staff claimed that it had destroyed a major Russian command and control center in Lugansk with British storm shadow cruise missiles. The effective use of these missiles — which Ukraine has been firing for the past two years — requires U.S. targeting data.

Despite this, Moscow has not targeted Ukrainian headquarters in Kyiv precisely because of the likelihood that U.S. and other NATO soldiers and intelligence officers would be killed, risking drastic escalation in response by the West. Since Donald Trump returned to the presidency and initiated the peace process, the Russian government has also been restrained by a desire not to either anger or weaken him.

However, last week U.S. Secretary of State Marco Rubio declared that the peace talks are at a standstill, and that “there are no such talks occurring at this time.” He essentially threw responsibility for moving the process forward back to the Russians and Ukrainians: “If we see an opportunity to pull together talks that are productive, not counterproductive, and that have the chance to be fruitful, we’re prepared to play that role [of mediation].”

The Russian army has also proven unable to advance on the ground in the Donbas. When President Vladimir Putin insisted that Ukraine withdraw from the remaining small part of the Donbas that it holds as a condition of peace, he presumably thought (like many Western military analysts) that the Russian army would soon capture this territory in any case. The massive use of drones by the Ukrainian army has prevented this; and despite heavy casualties, for two years the Russian army has made only tiny advances.

Russian generals are reportedly telling Putin that they will capture the rest of the Donbas by this autumn; but he has little reason to believe them, since at the current rate of advance so far this year, it will take the Russian army almost three more years to do so.

Meanwhile, Russian public discontent with the war is growing, as its economic costs begin to bite. Putin’s personal popularity has dropped sharply.

While public opinion polls suggest that most Russians might accept a ceasefire along the present battlefront, Russian hardliners would see this as a severe Russian defeat. For years now, they have been urging Putin both to intensify attacks on Ukraine and to threaten the West with radical escalation.

Until this week, Putin resisted this pressure; but he now seems to be listening to them.

The Russian government may calculate that a new strategy will bring a measure of success whatever the Western response. If the U.S. and NATO withdraw their advisors and diplomats, this will be a considerable victory for Russia; as will also be the case if Russia manages to destroy Ukrainian headquarters and damage their targeting capabilities.

Moscow may well also believe that it has less to fear than in the past from U.S. and NATO escalation in response to Western deaths. The U.S. is mired in war with Iran that it can seemingly neither win nor withdraw from. Pentagon officials have reported a serious depletion in key U.S. weapon stockpiles, including cruise missiles and air defense systems, and is diverting them to the Gulf from its reserves in Europe and the Pacific.

Thus the Pentagon has just warned Japan of “severe delays” of two years or more in the supply of Tomahawk missiles that Tokyo has already paid for, due to the need to replenish U.S. stocks used up in Iran. Japan regards these as critical for deterrence against China. This has led to Japanese commentators asking what has happened to the supposed U.S. “prioritization” of Asia and the China threat.

Meanwhile in Europe, half of the countries that had promised artillery ammunition to Ukraine have now suspended their participation in the process, leading to a risk that supplies of shells will sink drastically.

The Iran War also means that Russia could be in a position to threaten the U.S. If Washington decides to increase its aid to Ukraine, Russia could offer corresponding help to Iran in its own targeting with missiles and drones, bringing the likelihood of U.S. casualties. If the Trump administration is not worried by this possibility, it certainly should be.

We are therefore now facing the imminent prospect of a major crisis, a major dilemma for the Trump administration. This means that far from abandoning the peace process, the Trump administration needs urgently to re-engage, and to put intense pressure on European NATO allies to make offers in the area of sanctions relief, energy purchases, and normalization of relations that could lead Russia to end the war.

European countries will also need to help persuade the Ukrainian government to agree to a compromise peace.

With Ukraine/Middle East envoys Steve Witkoff and Jared Kushner hopelessly distracted by the Iran War, this will require the appointment of a new high-level and experienced negotiator for the Ukraine peace process, backed by a professional team of experts. It is absurd that two non-professionals (however personally capable) should be charged with the simultaneous conduct of two completely separate and vitally important sets of peace negotiations. No serious government should behave in this way.

If the Trump administration does not re-engage in the peace process, then within the next week or so it may likely face a choice between a humiliating retreat and a much deeper and more dangerous military commitment to Ukraine, with the serious possibility of direct war with Russia.

By Leonid Ragozin, Intellinews, 5/6/26

There has been a visible spike in Russian doomsday stories met with exaggerated excitement by the hardcore Ukraine war cheerleaders and with a measure of disdain by the actual Russia experts.

The news pegs in question included a sudden outburst of political critique by the elite beauty influencer Viktoria Bonya, the Kremlin’s ongoing attempts to clamp down on popular internet messaging services, an increase in Ukrainian attacks on Russian oil facilities and a relatively slow pace of Russian advance on the frontline which some sources even attempted to frame as a retreat.

Stories predicting an imminent crisis in Russia have popped up every now and then ever since the collapse of the USSR. They are best encapsulated by the infamous Atlantic magazine “Russia is finished” cover printed in 2001, one year into Vladimir Putin’s presidency.

Russia experienced a massive economic boom in the following years, yet the perception of Russia publications like that helped to spread informed ill-fated decisions such as the invitation of Ukraine and Georgia into Nato at the alliance’s Bucharest summit in 2008.

The current wave of apocalyptic predictions comes on the heels of the EU untying its €90bn loan to Ukraine, previously blocked by Hungary’s ex-premier Viktor Orban. The loan allows the country to sustain its war effort until the end of 2027, but it comes at a time when the EU is facing an unprecedented energy crisis caused by the US war on Iran. 

A simultaneous crisis of trust in the political mainstream in leading EU countries, spurred by strong Ukraine fatigue, makes one wonder whether the union will be able or willing to pay the loan in full until the end of the two-year period. 

Shoygu the Rebel

The latest doomsday story, broken by a co-op of major Western media and one Russian emigre outlet, paints the picture of a fearful Putin hiding in bunkers from Ukrainian drone strikes and scared that his entourage might stage a coup. The articles named former defence minister Sergey Shoygu as a person associated with an anti-Putin plot.

The story is based on a “report” provided by an unnamed source “close to” an intelligence agency of an unnamed European country. The reader is left to wonder whether the said agency represents a major European power like France or a dwarf state like San Marino. Notably, IStories published another, unrelated investigation focused on Russia a few days later in which it identified Estonian intelligence service as its primary source. 

The idea that Shoygu might be plotting a coup is not new. It was aired on March 9 by the anonymous Telegram channel VChK-OGPU named after the predecessors of the KGB. The unverifiable and sensationalist information the channel publishes typically proceeds to be circulated by similarly anonymous pro-Ukrainian infowar accounts on X (formerly Twitter) as well as by hawkish commentators who campaign for prolonging the war in Ukraine.

To its credit, VChK-OGPU candidly characterised its piece as “conspiracy theory” in the very first paragraph. The channel, however, proceeded to link mobile internet outages in the centre of Moscow, commonly associated with the threat of Ukrainian drone attacks, with the possibility of a coup attempt. Given the Kremlin’s extreme non-transparency, murky Telegram channels often become the only source of information about its inner workings for intelligence agencies and journalists alike. Telegram is also a battlefield of psy-ops units fighting on the cognitive front of the Russo-Ukrainian conflict.

The non-imaginary element in this conspiracy theory is the recent history of Shoygu’s removal from the defence minister post and the arrests of his subordinates in the ministry on corruption charges. Shoygu was the target of sharp criticism by various elements in the Russian military propaganda ecosystem, particularly by Wagner Group founder Yevgeny Prigozhin and his associates. 

Prigozhin’s conflict with Shoygu culminated in the summer of 2023 with the Wagner Group staging what looked like a coup attempt. But it was aimed against Shoygu, not against Putin, to whom the plotters pledged their loyalty. In the aftermath of the events, Prigozhin died in a suspicious air crash while Shoygu was moved from his ministerial fiefdom to a much less influential position in the Security Council.

Leading Russian opposition commentators Leonid Volkov, Fyodor Krasheninnikov and Yevgeny Chichvarkin described the idea of Shoygu as a potential plotter as preposterous. That, of course, doesn’t preclude Shoygu from being arrested on corruption charges at a later point, but that will hardly manifest a crack in the regime. It will be a victory for the group of military professionals associated with Putin’s aide Aleksey Dyumin and little else.

Territory lost and found

Other stories at the heart of the seemingly orchestrated Russia doomsday campaign are similarly dubious. Bonya generated a number of excited headlines in the Western media, which claimed it was a sign of rising discontent in Russia. Her emotional outburst, however, explicitly didn’t target Putin and ended up with her being invited onto Russian TV’s top political debate show with Vladimir Solovyev, something that wouldn’t have happened without the Kremlin’s consent.

Putin’s administration often invests in controlled quasi-opposition projects that help to gauge and vent public tiredness or anger. But it used the war as an excuse to eliminate the real political opposition making the political regime more impregnable than ever since the beginning of Putin era.

Narratives suggesting a “turning point” on the battlefield don’t hold water either. The Institute of War Studies (ISW), a think-tank linked to the US defence industry and former undersecretary of state Victoria Victoria Nuland’s family, insisted that Russia was losing more territory than it was gaining in April. However Ukraine’s most reliable war mapping service cooperating with the defence ministry, the Deep State, showed no recently liberated areas in April whatsoever. Ukraine lost 141 sq. km of its territory in April, according to Deep State. 

A comparison of the two war maps reveals that Ukrainian “gains” on the ISW map (particularly at the junction of the Dnipropetrovsk, Donetsk and Zaporizhznya regions) often correspond to areas which Deep State never claimed to have been occupied. Deep State relies in its methodology on meticulous OSINT as well as direct contacts with soldiers on the frontline, whereas ISW often cites Telegram milbloggers, such as Kostiantyn Mashovets, as a source proving Ukrainian advances. 

Incidentally, Mashovets himself pointed out in a recent post that there was no turning point on the frontline and that the steady Russian advance was proceeding largely as before. Deep State analysts expressed their disdain at ISW’s war coverage in previous years, jokingly calling it the “Institute of Telegram Studies”.

Meanwhile, attacks on Russian oil facilities produce powerful visuals, but they fail to cripple Russia’s war economy despite claims to the contrary by war propaganda. Despite regular drone strikes on Russian oil depots and key ports, Russia’s oil exports have reached the highest level since the start of Putin’s all-out invasion, according to Bloomberg.

That’s not to say that the Russian economy is not feeling the burden of war and unprecedented Western sanctions. It is getting sluggish, with a 1.1% growth in 2026 predicted by IMF. The government is slashing non-essential expenditure and some businesses which benefited from the wartime boom, fuelled by the expanding defence industry in previous years, are closing.

But that’s hardly different from countries that are bankrolling Ukraine’s war effort now that the US under Donald Trump is out of the game. Germany, most notably, is now eyeing a 0.5% growth in 2026 as a result of the Iran crisis. Meanwhile Ukraine’s State Statistical Service showed GDP declining by 0.5% in the first quarter of 2026, the nuance being that in Ukraine’s case we are talking about an economy on life support in the form Western funding which goes dead the moment the artificial ventilation is turned off.

The elephant in the room war cheerleaders are ignoring is that whatever economic or political troubles Russia might be experiencing, they are entirely incomparable to the plight of Ukraine. The victim of Russian aggression is suffering a demographic and infrastructural catastrophe of epic dimensions.

Meanwhile Russians are experiencing living standards on par with poorer EU countries (as the IMF’s GDP PPP per capita charts suggest), while Putin has so far avoided Ukraine-style mass forced mobilisation with press gangs hunting for men in the streets, and otherwise shielded most of the Russian population from any major impact of the war. 

This is not a kind of status quo Russian elites or Russians at large will swap for civil war that could — as the Ukraine war cheerleaders in the West hope — precipitate military defeat in Ukraine along the lines of Russia’s WWI collapse in 1918. 

The easiest way to assess the resilience of Russian society is to compare it with that of a very similar post-Soviet society in Ukraine. If anything, the war minimises the chance of political change, ensuring popular consolidation under the flag as well as free rein for the apparatus of repression that clamps down on political dissent.

Although hardly unprecedented, the current Russian doomsday campaign is uniquely ungrounded in political, economic and battlefield reality, which betrays either a deep intellectual crisis or desperation among those who are pushing it to the media and on social networks.

It is also a manifestation of under-the-carpet battles between those who want to turn the page on Ukraine war and those who want to proceed with it no matter how catastrophic this trajectory is for Ukraine’s society and statehood. 

The Iran war is a major factor in the calculation. The looming energy crisis in Europe jeopardises Ukraine’s hard-earned €90bn loan borrowed from increasingly vulnerable European economies. But even with that money available, the EU and Ukraine may not be able to procure sufficient amounts of weapons and ammunition from their key supplier, the United States, whose arsenals are badly depleted by hostilities in the Gulf, according to mainstream US media reports. This kind of considerations explain a change of tack displayed by such stalwarts of unquestioning support to Ukraine, such as German Chancellor Friedrich Merz. He recently said that Ukraine will have to lose territory in order to attain peace.

Magical scenarios pushed by lobbyist groups that benefit from the war in Ukraine primarily serve as a opium for audiences that prefer to be deceived rather than face the unsavoury outcome of this conflict. Collective irresponsibility and the fear of being scapegoated for the Ukraine debacle stand in the way of a peace settlement. But it all comes at the expense of Ukraine’s territorial integrity, its economic and demographic future, as well as many Ukrainian lives.

By Ben Aris, Substack, 5/8/26

How can Europe cover the $100bn the war in Ukraine costs? The EU just signed off on a €90bn loan for Ukraine agreed at a summit on December 19 to get it through the next two years. But the increasingly dysfunctional European economy doesn’t have the cash to make the loan. So, it borrowed it.

Russia is also spending extraordinary amounts – even more than the EU. Russia’s 2025 federal budget allocated about RUB13.5 trillion ($145bn) to “national defence”, according to the official budget. The difference is that Russia does have the money and is spending cash.

Collective debt

When the EU approved its €90bn Ukraine support loan, the announcement was framed in Brussels as a demonstration of resolve — the largest single financial commitment to the war effort since the invasion began. What received less attention was the structural oddity at its heart.

It’s a loan by Europe to Ukraine. but it is a strange loan as Ukraine doesn’t have to repay it until Russia pays Ukraine war reparations – which will never happen. Another oddity is that this is European collective debt, issued by the European Commission, backed by the EU’s own budget, not a loan by the member states.

The EU as a whole is on the hook for the bonds that will be issued to cover the loan and that is unusual. Unlike the US treasury bills that are issued at federal level, literally making the states united, the EU is not a federation and usually borrowing is a sovereign affair. In fact, it has only happened once before. To fund the post-Covid recovery spending, the EU created the so-called €750bn NextGenerationEU facility in 2020 (now €806.9bn) that has just expired – half of it distributed as grants and half as loans – that was also EU-level collective debt backed by the EU budget.

The first of their kind, the bonds made the European Commission one of the world’s largest supranational bond issuers, borrowing on capital markets. By 2026, the EU is expected to have issued around €800bn in long-term bonds and EU-Bills under the scheme, with little left over.

A key feature of the Ukraine loan is in the meantime the borrowing costs are paid by European taxpayers and are accumulating whether or not Ukraine wins. Repayment is scheduled to run until 2058. Interest costs mean the shared EU taxpayer bill is likely to be in the region of €600bn-€800bn over the full period to 2058, with the upper end possible if borrowing costs stay elevated. Spread over roughly 30 years, that would average about €20bn-€27bn a year across the EU budget.

Collective EU debt is a constitutional novelty. The EU is not, and has never claimed to be, a federated state. Big countries like Germany hate the idea, as Berlin doesn’t want to be responsible for debt collectively with the likes of poorer countries like Spain or Portugal. Borrowing money has been, and will remain, a sovereign responsibility for the foreseeable future.

When the US Treasury issues bonds, it does so as the sovereign issuer of the world’s reserve currency, backed by the full faith and credit of a 250-year-old federal government. When the EU issues bonds for Ukraine, it does so as a supranational body whose members remain fragmented sovereign states that are only loosely joined together by trade and selective regulatory authority. It is issuing collective debt on behalf of a bloc that has no unified fiscal authority, no common treasury and no power to tax its citizens directly.

Consequently, the NextGenerationEU collective debt was seen as something of a revolution, described at the time as a “Hamiltonian moment” for Europe, a reference to Alexander Hamilton’s consolidation of American state debts in 1790 that is widely credited with making the US a coherent economic union.

That makes the Ukraine €90bn loan a second revolution. Together, the two instruments have committed the EU to approximately €840bn in collective borrowing — a sum that, while still modest compared with the sovereign debt of individual large member states – represents a qualitative shift in what the EU is. Each bond issued for Ukraine is another small step toward the fiscal union that European federalists have sought for decades — and that northern European governments have consistently resisted.

The decision to adopt a second collective EU debt issue is dripping with irony. The original idea of issuing the Reparation Loan – basically confiscating Russia’s frozen $300bn and giving that to Ukraine as a “loan” – got shot down by Belgium as it remains illegal under the EU’s own rules. But it would have cost Europe nothing.

However, as IntelliNews reported, without more money, and quickly, Ukraine was facing a macroeconomic collapse as soon as April, so the EU went for the next best option: issue more EU collective debt. The third option on the table was even less appealing: each country issues bilateral debt to Ukraine and funds interest payments out of their own taxpayer-funded budgets.

The irony is those countries most resistant to European fiscal integration — including the Netherlands, Germany, the Nordic states — are amongst those that are Ukraine’s strongest supporters and were desperate to find the money to keep Kyiv in the war. They were the ones that pushed the idea of new EU collective debt through.

It’s all Euro debt now vs Russian cash

Nearly all of Ukraine’s funding is now debt. Under the Biden administration the burden was evenly distributed after the West started funding Ukraine in September 2022 to prevent another looming government financial collapse, with the EU always providing slightly more than the US. Former US President Joe Biden was generous, and the larger part of money sent to Kyiv was grants that don’t have to be repaid, whereas the EU has always provided more loans that do have to be repaid (eventually) than grants.

Team Europe overtook the United States as Ukraine’s largest total supporter in 2025, with EU member states providing €65.1bn in military equipment against the US contribution of €64.6bn. The latest €90bn loan brings the committed total to €283bn and counting.

Since US President Donald Trump came to power, the US has sent no money to Ukraine. At the same time, all the money coming from Brussels is now in the form of debt. As a result, Ukraine’s debt-to-GDP ratio has climbed steadily from the mid-30s pre-war and will breach 100% of GDP this year. Kyiv has already suspended payments on its outstanding Eurobonds as it can no longer afford to service them. How it will resume paying investors’ coupons post-war remains an unanswered question.

Russia, on the other hand, raises the bulk of its military spending in cash. Russia’s 2025 federal budget remains overwhelmingly financed by current tax revenue rather than borrowing.

Of the government’s planned RUB40.3 trillion ($433bn) in revenues for 2025, around 73% came from non-oil and gas taxes (including VAT) and duties, while a further 27% is derived from oil and gas income linked to energy exports. Together, these “cash” revenues account for nearly the entire operating budget.

By contrast, debt financing represents a much smaller share of overall funding. Planned domestic borrowing through OFZ bonds and other debt instruments totals roughly RUB5.4 trillion ($58bn), equivalent to about 13% of total federal resources available for spending in 2025, or around 4% of projected GDP.

The sanctions have cut Russia off from the international debt markets. It has no choice but to borrow by issuing its OFZ treasury bills – tapping its own banking sector’s circa RUB20 trillion ($225bn) pool of liquidity, or four-times more than the entire federal deficit. Additional funding from the rainy-day National Wealth Fund and privatisations contributes only a marginal share.

The fly in the ointment is that while Russia’s total debt is only about 18% of GDP – by far the lowest of any major country in the world – war pressures have pushed up yields dramatically making this borrowing very expensive and interest payments are already eating up about 9% of all government spending – about three times more than is normal. However, most of the big heavily indebted countries in Europe are in the same boat. The situation in the US, with over $39 trillion of debt, is even worse.

The difference in Russia’s debt profile and that of the US and Europe is enormous. In dollar terms Russia’s total external debt is roughly $290bn-$320bn. As of early 2026, Russia could pay off every penny of its debt tomorrow just from its international reserves should the war stop. The US and Europe will have to run decades-long austerity programmes and be blessed with strong growth to get their debt back down to, say, the Maastricht maximum recommended level of 60% of GDP.

Russia budget deficit headache

All this is not to say Russia is having an easy time paying for the war. It relies on cash and not debt to fund its war, but thanks to the enormous cost of the war it is still very short of money. (chart)

According to Finance Ministry data released this week, the deficit reached RUB4.6 trillion ($58.8bn) in the first quarter, already eclipsing the RUB3.8 trillion ($48.6bn) gap originally projected for the entire year, The Moscow Times reports.

The shortfall represents a staggering RUB2.6 trillion increase over the deficit recorded during the same period in 2025. CBR governor Elvia Nabiullina’s unorthodox experiment to slow economic growth to bring down persistently high inflation rates is causing a lot of pain as the economy is teetering on the cusp of a recession. That is hitting the tax take. Between January and March, total revenues fell by 8.2% to RUB8.3 trillion, while spending jumped 17% to RUB12.9 trillion.

The pain was felt most acutely in the energy sector, where oil and gas revenues plummeted 45% to RUB1.4 trillion. Non-oil and gas tax revenues offered a modest cushion, rising 7.1% to RUB6.9 trillion, but were insufficient to offset the drop in hydrocarbon income or the accelerating costs of the state’s domestic and military obligations.

War windfall

The war in Iran is about to bring some badly needed relief. Russia is currently running around a RUB1 trillion ($11bn) deficit each month, but the April number should be a lot better. Reuters calculated that Russia’s primary oil tax revenue was set to approximately double to RUB700bn ($9bn) in April as higher oil prices from the Iran war fed through with a one-month lag — which was expected to dramatically improve the monthly budget position.

In other words, the oil and gas tax take in April is now equivalent to the entire budget deficit and the entire oil and gas export revenues (not the same as the tax take) almost doubled to $19bn in April. Russia Inc is not back in profit, but the pressure is off for now.

The calculation of just how much the monthly balance in April will be is made more complicated by the front-loading of spending in January and February the Ministry of Finance (MinFin) introduced at the start of 2023 to smooth budget balance over the course of the year. The Ministry habitually prepays contracts early in the year to avoid letting them stack up until December when some 20% of the budget spending used to happen. By March the deficit had already shrunk to approximately RUB1.1 trillion and this front-loading effect will fade away in April further improving the Kremlin’s finances.

Taken together, the estimated April total revenue should be around RUB700bn from oil and gas and another RUB2.3. trillion of non-oil revenues, or a total of approximately RUB3 trillion ($33bn). Set against the average spending of RUB3.2-3.5 trillion a month, the deficit is expected to fall to around RUB200-500bn in April – a notable improvement, but still in the red.

Calculating the budget balance

Russia’s oil and gas revenues rebounded sharply in April as surging crude prices linked to conflict in the Middle East boosted export earnings to an estimated $19bn, up from $9.8bn the month before – but that is just a balance of payment number and not the taxes the government earns from the trade.

The Russian government typically collects approximately 60-65% of oil export revenues as taxes through the mineral extraction tax (MET) and related charges. The rest stays with the oil companies as profit. That means the government can expect somewhere around RUB700bn-RUB1 trillion in taxes from the March oil exports, depending on the exchange rate. So, the Reuters’ estimate looks about right, and maybe a little on the low side.

The March result – the first full month of the Iran war – is based on an average price for oil of around $77, but the cost has been rising since then. To go into profit, the Russian budget needs a total additional RUB950bn a month, or only RUB250bn more than the windfall in March. That means the average price of Russia’s Ural blend oil would have to rise to $105 per barrel to close the gap – so Russia is already close to breaking even, but not quite there yet.

Another complicating factor is the size of the discounts Russia offers on its oil over Brent. Since sanctions were imposed this discount can be as large as 30%, but since the Strait of Hormuz were closed at the start of March it has shrunk dramatically, and indeed, Urals has even earned a $20 premium to a barrel of Brent in the last two months.

Suddenly, oil is no longer a commodity; the price of a barrel now also depends on who you are selling it to and how you are going to get it there. On a single day the price of oil has varied between $90 and $174 depending on who the customer is and where it is coming from. The quoted price for a barrel of Urals has risen to over $120 in the last two months, but at the time of writing Urals was trading below $100 again at $98.5. Where the average settles at won’t be clear until the end of the month.

Fiscal claustrophobia

As individual countries, most of Europe is close to running out of fiscal space to expand borrowing to fund Ukraine. Ukraine itself has already found itself at the end of the fiscal space cul-de-sac and with growth slowing thanks to the same chronic labour shortage that Russia is suffering from, that space will only tighten further.

Russia on the other hand has, on paper, acres of fiscal space to continue the war, although the rising cost of borrowing is starting to constrain it as well. That is one of the reasons the spike in oil prices is so important as it creates more wiggle room. And the Kremlin also still has the option of raising taxes further. It remains to be seen how much more room the two-percentage point VAT hike in January will create, that alone accounts for 40% of the government’s income.

Europe’s constricted fiscal space is going to be an issue as funding Ukraine is not the only Russia-related call on its capital. Germany has committed €500bn in defence and infrastructure spending, crossing its constitutional debt brake in the process. Poland is spending 5% of GDP on defence — the highest in Nato. The Baltic states are targeting 5-6%. And European Commission President Ursula von der Leyen has called for €800bn of spending to modernise Europe’s armies as part of the ReArm plan and more recently the efforts to build a Euro Nato.

Then there is the Climate Crisis. Europe needs €584bn in grid investment alone by 2030 to support the energy transition — a figure that predates the rearmament surge and must now compete for fiscal space with defence spending. One top of that, Europe needs to increase its battery investment ten-fold to close the battery gap to complete the green energy transformation. And there is also Europe’s lack of competitive edge crisis. The Draghi Report recommended spending €800bn a year for four years to fix this problem – a call that has since got lost in the noise.

Eleven of the EU’s 27 member states are now running budget deficits above the bloc’s own 3% of GDP Excessive Deficit limit. France is at 5.1%. Romania at 7.9%. Germany has just crossed the threshold it spent a decade enforcing on southern Europe. The EU’s own stability rules — the Stability and Growth Pact — are being strained by the fiscal demands of a war it did not plan for and cannot easily exit.

The IMF stresses that Ukraine’s fiscal and external financing needs are large and that risks are “exceptionally high” due to the duration and intensity of the war. Each additional year of conflict adds to the EU’s borrowed liabilities without adding to its productive capacity.

By Kevin Gosztola, The Dissenter, 5/13/26

On behalf of President Donald Trump, the Justice Department issued grand jury subpoenas that targeted Wall Street Journal reporters involved in covering the war against Iran. 

“The government’s subpoenas to The Wall Street Journal and our reporters represent an attack on constitutionally protected newsgathering. We will vigorously oppose this effort to stifle and intimidate essential reporting,” stated Ashok Sinha, the chief communications officer for Dow Jones, the Journal’s publisher.

According to the Journal, the subpoenas stemmed from a February 23 article that reported that “Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, and others at the Pentagon warned the president about the risks of an extended military campaign against Iran. Other news outlets, including Axios and the Washington Post, published similar stories that day. Trump launched the war five days later, on Feb. 28.”

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Unnamed administration officials “familiar with the matter” told the Journal that Trump complained to Attorney General Todd Blanche about “media leaks.” Blanche subsequently sought subpoenas “targeting the records of reporters who have worked on sensitive national security stories, one official said.”

The Journal additionally reported, “In one meeting, Trump passed a stack of news articles he and other senior officials thought threatened national security to Blanche with a sticky note on it that said ‘treason,’ another administration official said.”

“The government’s investigation of The Wall Street Journal has nothing to do with ‘national security,’” Freedom of the Press Foundation advocacy director Seth Stern declared. “It’s an outrageous attempt to silence sources, intimidate journalists, and bury the truth about President Trump’s unpopular decision to launch a war even his own generals warned against.”

Stern described the subpoenas as a “direct threat to the public’s right to know,” and added, “Since the Department of Justice has abandoned the First Amendment, it’s up to the courts to restrain the government’s attempts to crush investigative journalism.”

“This isn’t a leak investigation—it’s an attempt to shut down reporting,” said Committee to Protect Journalists CEO Jodie Ginsberg. “Conflating journalism with treason is dangerous and anti-democratic. We call on the Justice Department to withdraw these subpoenas now.” 

Back in 2025, Attorney General Pam Bondi revised the Justice Department’s policy for subpoenaing members of the press and encouraged the pursuit of reporters, editors, news producers, and other media staff in leak investigations. 

Theodore Boutrous, Jr., who represents the Times in its lawsuit against the Pentagon’s media restrictions, contended that the Trump administration is using grand jury subpoenas to “invade directly into the reporter’s relationship with sources and the newsgathering process, which is meant to allow the American people to get information about the government.” 

Previously, the Washington Post received a grand jury subpoena that was linked to the Espionage Act prosecution against Aurelio Perez-Lugones, who is accused of disclosing information about U.S. military operations against Venezuela. (This is the same case where FBI agents raided the home of Washington Post reporter Hannah Natanson and seized her electronics.) 

Tim Richardson, who is the journalism and disinformation program director at PEN America, stated, “Even for an administration that brands protest as lawlessness and dissent as disloyalty, it is still alarming to see standard reporting practices framed as ‘treason.’”

“As Americans question a war now in its tenth week, the government is using a leak investigation to intimidate reporters in the hopes of shielding wartime decision-making from the public,” Richardson added. 

After the Iranian military shot down a United States military aircraft over Iran, the Pentagon searched for two crew members. An “administration official” told the Journal that the “stack of news articles Trump provided the acting attorney general was about those rescue operations.” 

On April 3, Trump showed his anger at coverage of the rescue operations, particularly how an unnamed outlet had reported that one airman was safe but the other airman had not been rescued yet. “We’re going to go to the media company that released it, and we’re going to say national security, give it up or go to jail.”

The Trump administration has waged a campaign against the news media that discourages scrutiny of not only the war against Iran but all U.S. military operations.

On May 12, Trump posted the following on his social media platform Truth Social, “When the Fake News says that the Iranian enemy is doing well, Militarily, against us, it’s virtual TREASON in that it is such a false, and even preposterous, statement. They are aiding and abetting the enemy!”

“All it does is give Iran false hope when none should exist. These are American cowards that are rooting against our Country,” Trump added. The same day the New York Times reported that Iran still has “significant missile capabilities” despite claims to the contrary by Trump officials.

In mid-March, Pentagon Secretary Pete Hegseth scolded the press for supposedly showing “mercy” to U.S. “enemies.” He stressed that news media should rewrite headlines to make them more suitable to the Trump administration. 

“For example, a banner or a headline: “Mideast war intensifies,” splashing on the screen the last couple of days, alongside visuals of civilian or energy targets that Iran has hit, because that’s what they do,” Hegseth said. “ What should the banner read instead?”

“How about, ‘Iran increasingly desperate,’ because they are. They know it and so do you, if it can be admitted,” Hegseth added. A few weeks later, it was the Trump administration that reached out to Pakistan to broker a ceasefire between the U.S. and Iran.

Plus, prior to the war on Iran, Hegseth and the Pentagon ramped up hostility toward the press by adopting unconstitutional media restrictions that effectively allowed for viewpoint-based discrimination against reporters. 

Judge Paul Friedman stated when the court ruled against the policy, “[I]n light of the country’s recent incursion into Venezuela and its ongoing war with Iran, it is more important than ever that the public have access to information from a variety of perspectives about what its government is doing. So that the public can support government policies, if it wants to support them; protest, if it wants to protest; and decide based on full, complete, and open information who they are going to vote for in the next election.”