By Anatol Lieven, Foreign Policy, 12/16/24

The incoming Trump administration seems genuinely committed to finding peace in Ukraine. Whether it’s capable of the extremely complicated diplomacy required is a very different question. One issue that will have to be decided at the very start of the process is at what stage, and on what issues, Ukraine should be involved in the process. The issue is more fraught than has generally been acknowledged.

The first and most fundamental goal of the talks (as in all such negotiations) will be for each side to clearly establish, on the one hand, its vital interests and absolute and nonnegotiable conditions and, on the other hand, what points it is prepared, in principle, to compromise on. It may be, of course, that the nonnegotiable positions of the three sides are fundamentally opposed and incompatible. If so, peace negotiations will inevitably fail, but we will not know this until these issues have been explored.

The three parties involved are Ukraine, Russia and the United States. The initial stages of the negotiations, however, should be between the United States and Russia. It goes without saying that certain aspects of an eventual agreement will require Ukraine’s full assent, and that without this assent a settlement isn’t possible. These aspects include the terms of a ceasefire, the nature and extent of any demilitarized zones, and any constitutional amendments guaranteeing the linguistic and cultural rights of Russians and Russian-speakers in Ukraine. U.S. negotiators will have to be fully cognizant and respectful of Kyiv’s views on Ukraine’s vital interests.

Given certain categorical—and entirely legitimate—Ukrainian positions, a number of key issues seem to be a priori off the table, and if Russia insists on them, no agreement will be possible. The most important initial task of Gen. Kellogg and his team will therefore be to discover whether the Russian government regards these conditions as nonnegotiable, or whether Moscow is prepared to compromise on them if the Trump administration is prepared to compromise on wider issues.

The first nonnegotiable issue from Ukraine’s and the U.S.’ point of view is Ukrainian and Western legal recognition of Russia’s claimed annexations, as opposed to an acceptance of the fact (already accepted in public by President Zelenskyy) that Ukraine cannot recover these territories on the battlefield and therefore has to accept the reality of Russian possession, pending future negotiations.

Russian experts have suggested to me that Moscow will not, in fact, insist on this in talks, because in addition to Ukraine and the West, China, India, and other key Russian partners would also refuse the very suggestion. They said that Moscow hopes for a situation like that on the island of Cyprus, where no country but Turkey has recognized the Turkish Republic of Northern Cyprus, but talks have lasted 50 years with no result.

The second nonnegotiable issue is Putin’s demand that Ukraine withdraw from the territory it still holds in the four provinces of Ukraine that Russia claims to have annexed. This is absolutely unacceptable to Kyiv, and should be to Washington, too. Ukraine should not be encouraged and helped by Washington to batter itself to pieces in a hopeless effort to drive Russia from the territory it controls, but it cannot be asked by Washington to give up more territory without a fight. The Ukrainian government will doubtless make this clear to the Trump administration, and its view must be accepted as definitive by the United States as well.

However, certain other basic questions are not up to Ukraine to decide. They are chiefly up to the United States, and it is the U.S. administration that will have to negotiate them. Central Russian proposals in the ultimatum issued before the war were for new agreements with the United States and NATO not relating to Ukraine.

Today, key aspects of the Russian demand for limits on the Ukrainian armed forces depend on the United States, since it is only the United States that can provide Ukraine with long-range missiles and the intelligence to guide them. The question of which Western sanctions to lift or suspend as part of a deal with Moscow is also up to the United States and EU.

Ukraine can, of course, ask to join NATO, but the decision of whether to accept a new member lies not with that country but with the existing members—and each of them has a veto on the issue. A U.S. administration could take the lead, but it will be up to Washington to decide how much influence to use with, and pressure to put on, other members, and it cannot simply override the likely vetoes of Hungary and Turkey—or perhaps of France, if Marine Le Pen is the next president.

The question of what Western security guarantees can and should be given to Ukraine as part of a settlement is also not up to Ukraine to answer. President Zelenskyy has suggested the deployment of troops from European NATO members, which has been echoed by certain Western officials and commentators and is reportedly being discussed between President Macron of France and the Polish government.

However, everything that I have heard from Russians tells me that this is just as unacceptable to Moscow as NATO membership itself and would therefore make agreement impossible. Moreover, European countries would agree to send their troops only if they had an ironclad guarantee from Washington that the United States would intervene if they were attacked. This, in effect, punts the decision back to Washington—not Kyiv, and not Brussels, Warsaw or Paris.

Above all, Russia’s motives for launching this war extend beyond Ukraine to the whole security relationship between Russia and the West, led by the United States. They include the demand for military force restrictions (which would have to be reciprocated on the Russian side) and some form of European security architecture in which vital Russian interests would be taken into account and future clashes avoided.

It may be that either the Putin administration or the Trump administration—or both—will refuse to compromise and that talks will accordingly collapse. Testing this, however, will be an extremely complex and difficult process, requiring patience and diplomatic sophistication on both sides. It would be extremely foolish to expect either Russia or the United States to put all their cards on the table at once.

Because this process will be so difficult, the sad but unavoidable truth may be that if Ukraine takes part in the talks from the start, progress toward a settlement will become completely impossible. Every prospective compromise will immediately be leaked and will cause a firestorm of protest in Europe, in Ukraine, in the U.S. Congress, in the U.S. media, and perhaps even from Russian hardliners.

The United States has been the essential and irreplaceable supporter of Ukraine in this war, not only because of the aid that it has given but because European countries would not have given their aid without U.S. encouragement and backing. American citizens have, in consequence, been faced with great costs and considerable risks, and wider U.S. interests have been endangered. This gives U.S. citizens the right to expect their government to take the lead in trying to negotiate an end to the Ukraine war—especially since it is the only government that can.

Consortium News, 1/2/24

The National Security Archive recently published a 1994 memo by E. Wayne Merry, a U.S. diplomat in Moscow who provided an on-the-ground assessment of U.S. policies toward a Russia that was in chaos. 

In his memo — sent by telegram — Merry criticized the U.S. tendency to prioritize experimental shock therapy rather than laying the foundation for the rule of law. 

He also said that Russia’s historical and cultural experience was not conducive to the same lionization of unfettered free markets that Americans had.

The memo represented a different view of how the U.S.-led West could have managed its relationship with and guided reforms in post-Soviet Russia — a view that unfortunately was not followed.      

Natylie Baldwin:  You wrote an assessment of what was going on in Russia for the State Department in March of 1994.  It was entitled “Whose Russia Is It Anyway? Toward a Policy of Benign Respect.” The National Security Archive published it in December 2024 and described it as “The Long Telegram of the 90’s.”  What was your formal role for the U.S. government at that time and what prompted you to write this assessment?

Wayne Merry: From August 1991, I was chief of the Political/Internal section of the U.S. embassy in Moscow, in charge of reporting and analysis on political developments in the late Soviet Union and then Russia.  I had worked in this section a decade earlier and was very familiar with the role. 

Given the historic events underway from 1991 through 1994, it was a central part of my job to attempt to explain these events to a Washington readership and especially to challenge misperceptions in Washington about Russia through the advantage of being on the ground.

Baldwin: One of several themes in the assessment was the U.S./West’s insistence on implementing exploitative neoliberal economic policies on Russia in that era that were leading to a lot of destabilization and major social problems.  These policies were understandably unpopular among most Russians.  

You made the point that, as far as U.S. interests relating to Russia were concerned, Washington should have prioritized diplomacy and the successful building up of democracy and the rule of law and let the Russians decide their own domestic economic policies.  Explain how you arrived at that conclusion about U.S. interests and how our policies at the time were problematic.

Merry:  It was not difficult in-country to see that the macro-economic stabilization policies which had been fairly successful in Poland were not so in Russia and that more maturity of post-Soviet Russia’s political institutions was essential to permit a non-criminalized development of a market economy. 

There was considerable debate on the American side, in Washington and in Moscow, as to which should have priority — market economics or rule of law.  As someone with years of in-country experience of Russia, I felt strongly that political and legal reforms should take priority. 

In 1998, demonstrators in Pereslavl, Russia, with banner saying “Jail the redhead!” in reference to Anatoly Chubais, the Russian politician and economist responsible for the privatization program under President Boris Yeltsin. (Pereslavl Week, Yu. N. Chastov, Wikimedia Commons, CC-BY-SA 3.0)

Baldwin:  In making your case on that point, you predicted that U.S. policies were eroding much of the good will that Russians had toward the West in general and the U.S. in particular, right after the Cold War ended.  Indeed, Russians did become very disillusioned by the U.S./West and ended up having a less than positive view of democracy because it became associated with the poverty, crime and chaos that accompanied Western involvement in their country in the ‘90s. To what extent were you already seeing this resentment from Russians at the time that you wrote this in 1994?

Merry:  These developments began under [the last Soviet leader Mikhail] Gorbachev and were well advanced by 1994.

Baldwin:  In your assessment you stated:

“Thus, ‘reform’ of the Russian economy will, of necessity, be the work of many years.  The Russian approach to this process will be different from our own, reflecting a better appreciation of their needs and societal preferences.  In facing the colossal mistakes of the Soviet period, Russia can and will fall back on traditions long pre-dating the Leninist state: traditions amenable and sometimes even rational in a Russian context, even if they differ sharply from American experience and inclination.” 

To most people, I think this point you make about Russia progressing on the road of economic reform in a manner that reflects their unique history — and you also go on to mention geography and climate — seems like common sense.  Why do you think U.S. decision-makers couldn’t understand this and act accordingly?

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Merry:  Most advocates of “shock therapy” in Russia had little or no experience of the country, let alone of its social and political cultures.  They simply believed in their macro-economic ideology as applicable anywhere on earth.  I had encountered this perspective among academic economists in the United States during my student years but had learned from other economists with a broader range of thought.

Baldwin:  To continue with that line of thought, when reading your 1994 assessment, it is notable that you provide an analysis based on an acknowledgment of objective reality.  Today that really seems to be missing from so much that is written by supposed experts in the U.S. about Russia and policies toward it. 

Analysis today seems to be very ideologically/narrative driven and facts seem to be easily dismissed if one simply doesn’t like the facts or they don’t fit a preferred narrative.  

What do you think may explain this?  Is there a difference in the education and training of academics and government officials these days?  It’s safe to say that arrogance breeds foolishness — is it just arrogance due to the fact that we’ve been the lone superpower for several decades? 

A young boy and U.S. President Ronald Reagan in Red Square, Moscow, 1988. (Reagan White House, Wikimedia Commons, Public domain)

Merry:  I am not familiar with recent education in this country about Russia, but certainly the policy arrogance we saw in Iraq and Afghanistan had its parallels in our policy in Russia in the ‘90s.  

Baldwin:  At one point in your assessment, you refer to the legislative elections that had taken place in December of 1993. You said the following:

“What the election showed, yet again, is that Russia is a very different society than America. In contemporary American rhetoric, ‘democracy’ and ‘the market’ are treated as synonymous terms and certainly as mutually dependent. 

Few, if any, Russians perceive them so. American dogma portrays ‘democracy’ and ‘the market’ as freedom of choice for the individual in the political and economic realms, with highly positive ethical connotations.  Russians (and most non-Americans) are simply baffled by this vision of a societal double helix of political and economic decisions leading to a higher moral and material state of being. Very, very few Russians impart positive ethical content to market forces, and unfortunately more of these are mafia than economists.”

Can you discuss this difference in outlook by Russians about the relationship between democracy and the market?  What are those differences rooted in for Russians?  To what extent do you think this is still true in Russia today?

Merry:  I think Russia remains closer to its pre-Soviet roots than to any kind of contemporary Western market economy.  I would recommend reading the works of Nikolai Leskov, a late 19th Century Russian author, to get a grip on the realities of 21st Century Russia.

Baldwin:  You also noted that, given Russians’ seven decades of experience with Soviet socialism, one thing they were weary of was economic theory.  The last thing they wanted after communism fell was to be the subjects of a socioeconomic laboratory experiment which is how many Western officials and academics viewed Russia in the 90’s. Can you expound on that?

Merry:  Certainly, many of the Western economists who came to post-Soviet Russia did so with an enthusiasm for large-scale market experimentation.  I recall that one of the most common slogans in public demonstrations under Gorbachev and [the Russian President Boris] Yeltsin was “no more experiments.”  

Yeltsin ahead of the 1996 presidential election. (Kremlin.ru, Wikimedia Commons, CC BY 4.0)

The Soviet system fairly exulted in its mass social and economic experiments, which most people came to loath.  

Most Russians pretty much assumed that Americans and Europeans must know the correct way to run a modern economy, so did not need to experiment.  They were not amused when many of the Westerners who came to “educate” Russia in market economics saw their roles as one of mass experimentation. 

Russians said they wanted to live “normal” lives.  That word, “normal,” in Russian carries with it a very deep well of frustration and dissatisfaction both with their own leaders and with the outsiders with their view of the Russian people as little better than laboratory animals for experimentation.   

Baldwin:  You also discussed the fact that Yeltsin was losing his popularity at the time.  Yeltsin went from being very popular in 1991 to now being seen by many Russians as one of the worst leaders the country has ever had.  As someone who had a front row seat during that period, what factors would you say led to his popularity taking such a nosedive and virtually destroying his legacy?

Merry:  Yeltsin suffered from excessive expectations, especially after Gorbachev.  Yeltsin enjoyed very high levels of popular acceptance in 1991, but this proved fragile under the pressure of high levels of inflation; loss of employment and access to consumer goods; loss of great power status and pride, plus the poor human relations exhibited by some of his team.  

Yeltsin could be a terrific leader in a crisis, but keep in mind that the patience of the Russian public with its government had eroded badly even under [Soviet leader Leonid] Brezhnev.  Yeltsin had great instincts for tearing down the old Soviet system, but little grasp of what could or should come after.  I think his military interventions in Chechnya also were catastrophic errors, both at home and in terms of his image abroad.  

Baldwin: What do you think are the biggest lessons from that period that would be helpful for U.S. policymakers to understand now in our relationship with Russia?

Merry:  Humility would be a great asset in U.S. policy, but I do not expect to live to see it.

TASS, 12/19/24

MOSCOW, December 19. /TASS/. Russian President Vladimir Putin assessed the progress of the special military operation, the possibility of negotiations with Ukraine and the growth of the Russian economy at the combined Direct Line Q&A and year-end press conference. He also spoke about the importance of sovereignty, the country’s updated nuclear doctrine and the latest Oreshnik missile.

TASS has compiled the key statements of the head of state.

On special operation and situation in Kursk Region

– The situation in the special military operation zone is “changing significantly,” there is progress along the entire front line, Russian servicemen “are liberating territory by square kilometers every day.”

– It is impossible to estimate how long the special military operation will last: “The fighting is complicated, so it is difficult and unnecessary to guess.”

– It made no military sense for the Ukrainian armed forces to enter the Kursk Region, just as it makes no military sense for them to stay there now.

– After the liberation of the region it will be possible to assess the damage, but for sure “everything will be restored.”

On possibility of negotiations with Ukraine

– Russia has people to talk to in Ukraine, “there are a lot of our guys there” who dream of ridding the country of neo-Nazism.

– Moscow is ready for negotiations and compromises, “politics is the art of compromise,” but Ukraine has refused.

– Russia is ready to sign peace agreements with any legitimate authorities in Ukraine, but the current authorities in Kiev are illegitimate.

On Kiev’s terrorist activities

– The Kiev regime’s sabotage acts against Russian citizens highlight its terrorist nature.

On sovereignty

– The growth of the Russian economy is due to the strengthening of sovereignty, and sovereignty itself is “the result of economic growth”.

– The country has become “much stronger” in the last two to three years.

– Russia has become stronger and from now on “will make decisions without considering other people’s opinions”.

On Oreshnik missile

– The Oreshnik missile is based on Russian developments, it is a “modern and very new weapon.”

– It has a range of up to 5,500 kilometers.

– There is no way to shoot down an Oreshnik missile.

– In case of doubt, the West should choose a target in Kiev, concentrate its air defense and missile defense forces there and try to intercept the missile: “We are ready for such an experiment.”

On nuclear doctrine

– The defense of Belarus is a “very important component” of Russia’s updated nuclear doctrine.

On economy

– The economic situation in Russia as a whole is “normal, stable”, “despite everything”.

– Russia’s economy ranks first in Europe and fourth in the world.

– The inflation situation is a “worrying signal”.

On gas transit

– Ukraine has cut off gas supplies from Russia to European consumers, although it is “picking from their hand”.

– There will definitely be no contract for the transit of Russian gas through Ukraine, but Gazprom will survive.

On migrants

– The migration problem is acute for Russia, although it is even more acute in Europe.

– To reduce the number of migrant workers, Russia must increase labor productivity and “use technologies that do not require large amounts of unskilled labor.

– Law enforcement agencies should ensure that migrants who come to work respect the traditions and culture of Russia and of Russians themselves.

On readiness for conversation with Trump

– “I am ready for it [a conversation with US President-elect Donald Trump] at any time, of course. And I will also be ready for a meeting if he wants it.”

On situation in Syria

– Russia expects peace and tranquility in Syria.

– Moscow “maintains relations with all groups controlling the situation there, with all countries in the region.”

– Russia condemns the seizure of any Syrian territory, this position remains unchanged.

– Israel is the “main beneficiary” of the events in Syria.

– Russia hopes that Israel will one day withdraw from the territory of Syria, but now, on the contrary, it intends to strengthen itself there.

– The presence of Russian bases in Syria depends on the coincidence of interests with the new authorities.

– Russia has offered to use the Hmeimim and Tartus bases to deliver humanitarian aid to Syria.

On Western platforms

– The slowdown of YouTube in Russia has mostly to do with problems on the part of the platform itself, not the Russian authorities.

– The claims against Google and YouTube are fair, they are abusing opportunities.

***

Transcript: Vladimir Putin summed up the results of the year and answered questions from journalists and the people of Russia in a live broadcast. (Excerpt)

Kremlin website, 12/19/24

Channel One war correspondent Dmitry Kulko and VGTRK presenter Alexandra Suvorova moderated the Results of the Year with Vladimir Putin.

* * *

Deputy Chief of Staff of the Presidential Executive Office – Presidential Press Secretary Dmitry Peskov: Good afternoon everyone.

The President will be here within minutes to review the results of the outgoing year. I would like to remind you that this year we combine two events, the news conference and Direct Line.

Please show respect for your colleagues when I give the floor to journalists and make your questions as concise and clear as possible. This will allow the President to answer more questions.

Our moderators this year are Alexandra Suvorova and Dmitry Kulko, who will talk with the President. They worked hard to personally read extremely many questions from our people, possibly tens of thousands of them. They understand what the people of Russia are talking about and will help the President outline the subjects that are at the top of the agenda throughout the country.

Please.

Alexandra Suvorova: Good afternoon. This is the Results of the Year with Vladimir Putin. As usual, questions can be submitted in a number of ways until the end of our programme. Our colleagues continue working with the incoming questions.

First, you can submit your questions by calling 8 (800) 200 4040 or sending an SMS or MMS message to 04040. Questions can also be submitted via the programme’s official accounts on Vkontakte and Odnoklassniki. You can also use the website and mobile app called москва-путину.рф.

We have already received over 2.2 million questions, including 1.2 million via telephone, about 43,000 via SMS messages, and over 140,000 via the website. We can see that the number of questions is increasing in real time.

Let me share some interesting facts and figures on the Results of the Year with Vladimir Putin programme since this format was created. There was a time when the Direct Line and the news conference were two separate events and formats. This is the third time we are having it in a hybrid format. The first time it happened was before the COVID pandemic, the second was a post-COVID event in 2023, and now we are in 2024. Once again, the programme is taking place in a hybrid format, which means that both the people of Russia and, of course, journalists get to ask questions.

Here are some interesting statistics. For example, the event with the biggest number of questions took place in 2015 when the President received 2.25 million questions. This year, we have not reached this number. However, I believe that this could be attributable to the fact that regions hold their own direct lines, with governors answering questions from their people at the regional level. Therefore, some questions get resolved on the ground.

One thing to note here is that if we add up all the time Vladimir Putin has spent answering questions during events of this kind, the total already exceeds 64 hours. People have been tuning in from the regions since 2001 when the very first programme of this kind took place. It goes without saying that there will also be people joining us via videoconference from the regions today. Throughout the years when we had the Direct Line and the Results of the Year, people have been proactively contributing to these events not only by raising various issues with the President, sharing their concerns or asking for something, but also by expressing their gratitude. This year, considering that we are holding this event on December 19, we also received New Year greetings. This is another trend I wanted to mention.

Of course, social matters are in the spotlight today, judging by the submissions we have selected. Many questions deal with the special military operation. International matters are also high on the agenda, of course. So let us get started.

Dmitry Kulko: President of the Russian Federation Vladimir Putin.

For the third year in a row, volunteers from the Russian Popular Front have been helping prepare our programme and process the messages and calls. This year, they were also joined by veterans of the special military operation. For ten days since the free telephone line opened, they, too, have been taking phone calls. However, the Russian Popular Front’s work does not end today. In fact, we can say that it is only just beginning, because the moment the broadcast ends, the Popular Front volunteers will continue to work on the appeals people made to ensure that none of them is left unattended.

Alexandra Suvorova: I would like to add that some of the appeals have already been processed during the preparations for the Results of the Year programme, and some of the issues have been addressed by Popular Front volunteers and regional and federal authorities.

There is one more aspect that is different this year. GigaChat, an AI model provided by Sber, has helped us process people’s appeals and questions. Mr President, I know that you have already seen it.

President of Russia Vladimir Putin: I have.

Dmitry Kulko: Yes, GigaChat has drawn conclusions. This technology can do more than transcribe audio files into text – it can also extract the message and the essence of the problem, which has significantly accelerated the processing of requests this year. You will be able to see GigaChat’s insights on the screen throughout the programme. You will see the key subjects of people’s appeals, across the country and in each region. We will be using this virtual assistant during the programme today.

Anna Suvorova: Before we start taking questions from our people and our colleagues, journalists, I would like to ask the first general question.

In recent time, everyone has been feeling a disturbing sense that the world is going crazy, or already has, because the potential for conflict is off the charts in every part of the world, and the global economy is struggling. How does Russia manage not only to stay afloat, but also to continue growing in this situation?

Vladimir Putin: You know, when all is calm and life is measured and stable, we get bored. This amounts to stagnation, so we crave action. When action begins, time starts whistling by – or bullets do, for that matter. Unfortunately, bullets are what is zipping past our heads these days. We are scared, yes – but not as “all get out” kind of scared.

Our economics are the ultimate measure of things. As is traditional, I will start with the economy. Although your question was a bit provocative, I will turn to the economy anyway. The economy is number one; it is the cornerstone. It has an impact on living standards, general stability, and the country’s defence capability. The economy is everything.

The economic situation in Russia is generally positive and stable. We are growing in spite of everything, in spite of any external threats or attempts at outside influence.

As you know, last year Russia increased its GDP by 3.6 percent, and this year the economy is expected to grow by 3.9 percent, or possibly even four percent. However, we will have to wait and see the final results, as the year-end figures will be de facto factored into these projections in the first quarter of next year, which will be 2025 in this particular case. It may well be that this indicator reaches four percent. What this means is that our economy will have grown by eight percent over the past two years. After all, the tenths and hundredths of a percent make for a negligeable difference. This is what experts have been telling me – we exchanged views this very morning. About eight percent over the past two years, compared to a growth rate between five and six percent for the United States, one percent for the Eurozone, and zero for Germany, the EU’s leading economy. It seems that next year that country will also have zero growth.

International financial and economic institutions ranked Russia as Europe’s biggest economy in terms of volume, in terms of purchasing power parity, and the world’s fourth largest economy. We are behind China, the United States and India. Last year, Russia surpassed Germany and this year, we left Japan behind. But this is not the time for us to be complacent. We will definitely keep moving forward.

There is development everywhere you look and so much positive momentum across the board. If the Eurozone has fallen asleep, there are other centres of global development that are advancing. The situation in the Eurozone and the United States has been changing too. We must maintain the momentum we have gathered and transform our economy at its core, from a qualitative perspective.

There are other general performance indicators which have been quite satisfactory, to say the least. Unemployment is the first such indicator. All countries around the world, and all economies, pay a great deal of attention to this figure. For Russia, it is at its all-time low of 2.3 percent. We have not experienced anything like this before. This is my first point.

Second, there has been growth in specific manufacturing and industrial sectors. In fact, industrial output increased by 4.4 percent, while the processing sector reported a growth rate of 8.1 percent, with some of its sectors achieving even higher growth rates.

Of course, inflation has been causing some concerns. Only yesterday, while preparing for today’s event, I talked to the Central Bank Governor, and Elvira Nabiullina told me that the inflation rate has already reached about 9.2–9.3 percent year-to-date. That said, salaries have increased by nine percent, and I am talking about an increase in real terms, minus inflation. In addition, disposable incomes have also increased. So, the overall situation is stable and, let me reiterate, solid.

There are certain challenges with inflation and with the economy heating up. Therefore, the Government and the Central Bank have been seeking to ensure a soft landing. Estimates may vary for next year, but we expect the economy to grow at a rate of 2–2.5 percent. This soft landing would enable us to keep improving our macroeconomic performance.

This is what we must aspire to. I think that we will probably raise these matters during today’s meeting. Overall, the economy can be described as stable and resilient.

Alexandra Suvorova: I have a follow-up question, given the numerous questions surrounding price growth, to which we will return. You have cited Germany and Japan as examples. I wish to focus on Germany having a zero percent growth rate, which you mentioned as a case previously known for its economic expansion.

Do you believe this is perhaps linked to politics and sovereignty? Not long ago, at the VTB Forum Russia Calling!, you reminisced about Gerhard Schroeder’s birthday celebration, remarking how all the songs were in English, with none performed in German.

Vladimir Putin: There were. It’s an interesting episode. Quite some time ago, it was Gerhard Schroeder’s birthday, he invited me and I attended. There was a small concert, and, as it happened, all the companies performed in English. I remarked at the time, “Even the Hannover girls’ choir sang in English.”

There was, however, one ensemble that performed in German: the Kuban Cossack Choir, which accompanied me. Moreover, this was entirely unexpected on my part. I inquired, “How did you come to know these songs?” They replied, “Out of respect for the Germans, our hosts, we learnt these songs en route and performed them in German, including those from the local region where we are now.”

During the intermission, numerous attendees approached me (I recount this as it truly unfolded) and expressed, “We are embarrassed, truly, that only Russian Cossacks performed in German here.”

I recounted this to a colleague who was present at the event, which has now been recalled. You see, sovereignty is a crucial concept; it must reside within, in one’s heart. In the post-war era, I believe this sense – of homeland and sovereignty – has been somewhat eroded among the German people.

Who are the Europeans, after all? They are proud to be European, yet they are foremost French, German, Italian, Spanish, and then European. There is a tendency to smooth out things, to homogenise. Ultimately, this affects everything, including the economy.

I previously spoke about our economic growth – this is largely attributable to the reinforcement of sovereignty, which extends to the economic realm.

Many foreign manufacturers have exited our market. What has been the consequence? Our entrepreneurs have started producing these goods domestically, necessitating further research and the engagement of institutions, including those focused on development. All of this – what we are discussing – is the enhancement of technological sovereignty.

Sovereignty manifests itself in various forms: defence, technology, science, education, culture. This is of paramount importance, especially for our nation, because should we lose sovereignty, we risk losing statehood. That is the crux.

Economic growth is also an effect of bolstered sovereignty.

Dmitry Kulko: Mr President, I suggest we move on to questions from our citizens.

Vladimir Putin: Yes, let us begin.

Dmitry Kulko: You spoke about economic growth. It is true that a look at our economic indicators, which do look good, shows that the majority of Russian enterprises are working to capacity and wages are rising, yet they cannot keep pace with price increases.

Many Russian citizens have written about this, and AI has analysed all the requests and compiled a list of regions where more questions concerned price growth. These are eastern regions, such as the Kamchatka Territory and the Sakhalin Region, and also our westernmost territory, the Kaliningrad Region. Also, the majority of questions from the Irkutsk Region concern price growth. In short, it is a topical issue.

Alexandra Suvorova: It is topical indeed. I will cite the figures which have also been provided by GigaChat, which we are using.

The most frequent questions have to do with the rise in prices of bread, fish, milk, eggs and butter. People also write about the growth of fuel prices. This file contains some of the citizens’ questions about price growth.

If we look at the official data of the Federal State Statistics Service (Rosstat), we got it last night, we will see that the prices of fruits and vegetables have increased by 3.4 percent over the past week. For example, the price of cucumbers has grown by ten percent after rising by 43 percent in November.

Vladimir Putin: First, I would like to apologise to the audience, especially those who are following this event via various media platforms, including online. When I said that price growth or inflation was slightly above nine percent this year, at 9.2–9.3 percent, and that people’s wages and real disposable incomes have grown as well, I cited average figures. Of course, our country is very big, and some people might ask me what I was talking about, that their well-being has not improved but remained at the same level. And some might even say that their well-being has deteriorated. Yes, this can be so and it is so, in some cases. I cited average figures, because when we make plans, we need to have figures to rely on, and we can only rely on average figures.

As for the growth of prices, there are both objective and subjective reasons for that.

What is more important is that the supply in our market should correlate with people’s incomes, or rather, people’s incomes and their purchasing capacity should correlate with the volume of goods produced in the country. Wages and incomes have been growing faster than the mass of commodities and the rate of production.

I will explain. Let’s say, food production in our country is constantly growing. I will talk about this later. There will certainly be questions on agriculture. In fact, I can tell you that it adds three percent every year. We are fully self-sufficient when it comes to meat. One hundred percent.

It is a good indicator. Why does this happen? In Russia, the annual consumption of meat is about 80 kg per capita while in other countries, it is about 42 kg on average. It may seem enough and yet, meat consumption has doubled recently, you see? Doubled.

Now, milk. Milk production grows every year, but consumption grows as well, and there is not enough milk to produce butter. I know that the butter prices have grown by 33–34 percent in some regions, and possibly higher in others.

Simply, the amount of products has not grown as much as consumption has. This is the first reason. The solution here would be to develop industries. And I will talk more about it later.

The second objective reason is harvest.

The third objective reason is that some products have become more expensive on world markets.

Of course, the external restrictions, sanctions and so forth are affecting the prices to a certain extent. They do not play a key role but still, they take a toll as they make logistics more expensive, in addition to other things.

There are also subjective reasons or things we could improve on our side. For example, some experts believe that the Central Bank could have used certain instruments other than raising the key rate, more efficiently and at an earlier stage. Yes, the Central Bank started doing it around summer. But again, these experts believe that it could have and should have been done earlier. There are many instruments. I will not list them now and will not tire our audience with these considerations about the Central Bank and its regulation methods.

The Government works efficiently and does a lot when it thinks about the future – and the future should always be considered. In our country, we always thought about the future even during the harshest times of the Great Patriotic War. We know these examples. There were efforts made and, as it turned out later, correct efforts.

Our Government does think about the future: it formulates tasks, national development goals and national projects. It is wonderful but it would also be great to take timely efforts with respect to industries and consider the development of certain sectors, the production of mass products. I will not list them now – perhaps, there will be questions on specific industries later. Timely decisions should have been made.

Growing prices are not something to enjoy and they have adverse impacts. But I hope that overall, as we preserve macroeconomic indicators, we shall address this issues as well because macroeconomics is the basis for a healthy economy in general.

Dmitry Kulko: Mr President, we are holding today’s event in a combined format, a direct line and a news conference. I now suggest that our journalist colleagues ask a question.

Alexandra Suvorova: We can sense that those present in the hall are eager to ask their questions.

Dmitry Peskov: Indeed, the audience is quite eager. Allow me …

A question from the audience.

Dmitry Peskov: You know, if we behave this way, it would be disrespectful towards everyone else.

Vladimir Putin: Nevertheless, let us refrain from acting this way, and let us begin. What is your name?

Alina Khastsayeva: My name is Alina Khastsayeva, I represent the 15th Region information website in North Ossetia.

Vladimir Putin: Alina, go ahead, please.

Alina Khastsayeva: The issue of professional service personnel has become increasingly important. Multiple schools, including the North Caucasus Military Institute of Interior Troops in North Ossetia, used to train military specialists in the North Caucasus.

Quite literally, a legendary institute: seven of its graduates became Heroes of the Soviet Union, and 14 more received the title of Heroes of Russia. To this very day, its graduates are successfully carrying out missions set by our state. Its graduates include former Interior Minister Anatoly Kulikov, and Sergei Khairutdinov, a recent graduate, became Hero of Russia while taking part in the special military operation.

Is it possible to reinstate this institute at a time when the North Caucasus and the whole of Russia need it so much? Thank you.

Vladimir Putin: Alina, thank you for this question. This is a good point, and do not be angry with Alina; here is why.

First, North Ossetia has always been Russia’s outpost in this region, in the Caucasus, and it has always justified its lofty designation. We know how the republic’s residents feel about their region and about Russia, our large common Motherland. They have always defended it and have fulfilled this role worthily and admirably.

You have noted that the number of schools has been reduced. This is not linked to a decision to close them in Ossetia alone. It is related to the fact that, according to military specialists and agencies, there were too many military schools, and the Russian army did not need so many specialists and so much service personnel at the time. Due to various circumstances, we are now increasing the strength of the army, security and law enforcement agencies to 1.5 million people. I cannot say that we will achieve this tomorrow, but I promise you that we will certainly analyse this issue.

Thank you.

To be continued.

Here’s to hoping this awful war ends in 2025. – Natylie

By Geoffrey Roberts, 12/23/24

1. A swift end to the war is in sight: sooner rather than later, Russia’s battlefield successes will force Ukraine to agree an armistice that will halt hostilities and open peace talks.
2. Putin is holding the pass against Russian hardliners who want to prosecute the war to the point of Ukraine’s complete destruction.
3. Trump has no reason or interest in being dragged into the quagmire of the Western proxy war with Russia.
4. Public opinion in favour of a negotiated, compromise peace is stronger than ever, not least in Ukraine itself.
5. The Global South remains a staunch ally of peace and the closer comes a ceasefire the more powerful will be its influence.
6. Western warmongers remain vocal but their shrill militarism sounds all the more hollow.
7. The political tide in Europe continues to turn in favour of anti-war forces.
8. Western media coverage of the war is less propagandistic, more realistic, and increasingly open to alternative views.
9. The danger of existential escalation has not disappeared but it has diminished.