Russia’s invasion of Ukraine led to one of the worst economic crises in modern Russian history. The Russian service of the BBC talks about the main economic events of the day.

Vladimir Putin held another “meeting” on economic issues. The quotation marks are not accidental: since the time of the coronavirus, the Kremlin has been calling Putin’s solo performances “meetings”, at which relevant officials are present as extras.

Putin began today’s “meeting” with the fact that Europe, obsessed with “inflated political ambitions and Russophobia,” hits “the well-being of its own citizens” with anti-Russian sanctions. Because of this, the President said, the Europeans had to face “a sharp rise in inflation.” “In some countries, it has already come close to 20% per annum,” Putin cited the appalling statistics.

What data he relied on is a mystery. According to the latest data from Eurostat , annual inflation in the Eurozone has reached 7.5%. This is a record, because in Europe, unlike Russia, inflation has always been slightly above zero. Now Estonia is the leader in terms of price growth. There, annual inflation is approaching 15% (but not 20%).

Elvira Nabiullina was among Putin’s listeners. Just at the beginning of this week, the Central Bank, which she heads, released a report with a forecast: by the end of the year, inflation in Russia itself will be from 18% to 23% (a record for the last 22 years). For some reason, Putin did not voice these figures.

But he said that weekly inflation in Russia is slowing down. It is in this vein – “Europe is choking on record inflation, while in Russia the rate of price growth is falling” – they talk about the economic crisis on pro-government Russian channels.

The second part of this statement is true (now the weekly inflation is 0.12% against 2.2% immediately after the start of the war). But, as always, context matters. One of the main reasons for the slowdown in inflation is that the Russians, on a wave of panic, bought everything from sugar to washing machines for future use. Now there are no unmet needs, nor – more importantly – special savings.

Ten European buyers of Russian gas have opened accounts with Gazprombank – in addition to ten more who have done so before, Bloomberg learned . Accounts are needed to pay for gas under the new scheme, which the Russian authorities call “gas for rubles” (in fact, exporters pay in foreign currency, but to a Russian bank account; payment is considered completed when the bank converts the currency into rubles and sends it to Gazprom ). Which countries are in question is unknown. Apparently, the largest importers and Germany in particular are among them.

Moscow, in turn, on the evening of May 11, rolled out new counter-sanctions against European companies through which Gazprom pumps gas to the EU. This, among others, is about Gazprom Germania (which owned the European assets of Gazprom, is under the external control of the German authorities) and EuRoPol GAZ (owns the Polish section of the Yamal-Europe gas pipeline).

For Europeans, this is unpleasant – Germany, for example, will lose about 3% of imports – but not catastrophically: it will be able to compensate for these losses from other sources, albeit more expensive. Russia is deprived of the opportunity to pump gas through Poland via Yamal-Europe, but in fact it has not done so for several weeks.

Read more about the effect of gas counter-sanctions here :

Lukoil is buying more than 400 gas stations and a lubricants factory from British-Dutch Shell (which decided to leave Russia shortly after Russia’s invasion of Ukraine). The amount of the transaction was not disclosed, employees are promised to keep.

Also, as it became known on Thursday, Germany will leave Russia Siemens. This is largely a symbolic phenomenon: Siemens CEO Roland Bush said that the company has been operating on the Russian market for “almost 170 years.” The scale of the problem has yet to be assessed: Siemens has many divisions that are engaged in various businesses in Russia, from energy to medical.

A separate story is the fate of the Sapsanov that ply between Moscow and St. Petersburg, which Siemens supplies and maintains. Probably, they are waiting for the “Iranian scenario”: some of the trains will have to be dismantled for spare parts, Kommersant writes with reference to specialized experts.

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