The range and scope of choices Russia has to sustain and escalate its war in Ukraine will ultimately depend on its economic resources. Understanding Russia’s wartime economy is therefore essential for sound security policy. Economic strain can narrow the Kremlin’s strategic options, but it does not make the regime less dangerous. On the contrary, fiscal pressure may intensify the incentive to seek a rapid military outcome before the costs of war become politically unmanageable.
For Europe and its Euro-Atlantic partners, the stakes are high. Russia’s wartime mobilisation has shown that it can rebuild and expand defence production even under sanctions. Yet structural weaknesses are mounting: a depleted labour force, shrinking reserves, rising borrowing costs, and an industrial base increasingly geared toward defence at the expense of civilian productivity. These pressures…
