Europe, International Trade & Finance, Power & Security, Russia The War's Impact on Russia's Economy and Ukrainian Politics

This article is a product of a workshop on “The Global Order after Russia’s Invasion of Ukraine,” hosted by Perry World House on April 14, 2022.

Moscow grossly underestimated the economic costs of launching its war in Ukraine. Lulled by the limited sanctions that greeted its invasions of Crimea and Donbas in 2014, and a false sense of security provided by its hundreds of billions of dollars in reserves, President Vladimir Putin appears to have believed that he could ride out any sanctions that a divided West could muster. He seems not to have understood the shock wave that a full invasion of a European state would produce in the West and the massive unity of the European Union’s economic response. He did not anticipate Germany’s about-face in its relations with Russia or the sudden attractiveness of NATO membership to Finland and Sweden. Russia’s invasion of Ukraine appears to be a catastrophic blunder by Putin, one that puts Russia and his regime in great peril.

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