Western sanctions have already left Russia’s economy in chaos with interest rates soaring, the currency in freefall and fears that there could be a run on the country’s banking system.
Even the aviation sector - that links its many vast and disparate cities - is in crisis after Irish companies demanded the return of aeroplanes leased to Russian carriers.
“Today has been, what you can really only describe as, the first day of a deep economic crisis that Russia is bracing for,” Moscow Times journalist Jake Cordell told The Hard Shoulder.
“We saw the national currency, the ruble, fall by 30% at the beginning of the day.
“The central bank had to hike interest rates - it doubled them to 20% if you want to take out a new loan here in Russia.
“But not many people are worried about that. They’ve been flocking to cash points to take out their rubles.
“They feel there’s going to be a run on the banking system - they were trying to transfer their money into dollars and euros to get some hard currency.
“We even saw shops selling out of expensive products; laptops and iPhones sold out in stores across the city because people just had no faith in this currency.”
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Observers say that the harshness of the west’s response has surprised Putin, who expected that he would escape with little more than a tap on the wrist - as happened after his invasion of Crimea in 2014.
“The Kremlin says the economy is protected from sanctions but there’s no way they thought the sanctions would be this hard,” Mr Cordell continued.
“And we are already seeing, what analysts are saying, could be the biggest recession in Russia since the fall of the Soviet Union.”
The nuclear option would be for the west no longer to buy Russian oil or gas; Germany has cancelled the controversial Nord Stream 2 - described by one journalist as like giving Putin “a chance to put his boot on the windpipe of Europe”. However, many European countries remain dependent on Russia to keep the lights on.
“It [Russia] could be selling something like some 20 billion dollars of oil and gas every month to the rest of the world,” Mr Cordell said.
“So there’s still lots of money coming into the country.”
Main image: Russian President Vladimir Putin speaks during a news conference in Moscow.Picture by: REUTERS/Alamy Stock Photo/EVGENIA NOVOZHENINA.
