Defense
While Russian companies have, at least so far, been able to shrug off US and European sanctions they will be rather less resilient in the face of a defense budget that slowly but surely occupies a greater share of the state’s resources. One way or another those defense bills are going to have to be paid, and it’s either going to come in the form of higher taxes or greater government borrowing. Unlike sanctions, an ever-growing defense budget is not a temporary shock so much as it is a fundamental, long-term reduction in competitiveness.
While Russian companies have, at least so far, been able to shrug off US and European sanctions they will be rather less resilient in the face of a defense budget that slowly but surely occupies a greater share of the state’s resources. One way or another those defense bills are going to have to be paid, and it’s either going to come in the form of higher taxes or greater government borrowing. Unlike sanctions, an ever-growing defense budget is not a temporary shock so much as it is a fundamental, long-term reduction in competitiveness.
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