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Putin's fiscal stronghold protects Russia from recession, global turmoil and the West

The latest French overture comes as US lawmakers return to work this week and at least two sanctions bills on Russia make their way through Congress.

But politicians and experts question whether further unilateral sanctions are an effective response to Russian President Vladimir Putin's adventurism amid fears they may also damage relations with US trading partners and allies.

The United States and their allies first issued a package of economic sanctions in 2014 designed to punish Russia for annexing Crimea and supporting separatist militias in eastern Ukraine.

Since then, politicians in Moscow have been building a monetary and fiscal stronghold that prioritises stability over growth and serves as a pillar of Russian sovereignty, as well as helping the Kremlin's economic sanctions be better than many analysts expected.

With the help of skilled technocrats such as Elvira Nabiulina, head of the Russian Central Bank, Putin built a foundation designed to isolate the Kremlin from external pressure as sanctions and strengthen the Russian economy's ability to withstand future economic turmoil ̵

1; – whether falling oil prices or global recession.

"Essentially, Putin's response to sanctions is: We invest less, grow less, consume less, but accumulate our reserves so that I can continue my aggressive policies," said Anders Aslund, senior associate in the Atlantic Council, which specializes in Russian economic policy.

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Despite the friendly rhetoric between US President Donald Trump and Putin, tensions continue to escalate as the new arms race warms. Earlier this month, Putin said Russia would produce missiles previously banned under a Cold War-era treaty with the United States, and at the end of August, the Russian president promised a "symmetrical response" after the United States conducted pre-banned missile tests.

But the military buildup of Russia and foreign adventures in Syria, Ukraine and Venezuela are not the only signs the Kremlin has been digging for the long haul.

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For Putin's life course, Russia has experienced a series of economic crises, beginning with the fall of the Soviet Union in the early 1990s, then the financial collapse in 1998, the global recession in 2008, and most recently the recession in 2014

"When Putin addresses the economic challenges, I think he looks at much less growth and much more survival. Lake crises, "said Christopher Miller, an associate professor at the University of" Tufts "whose studies are focused on the Russian economy.

Since 2014, Russia has increased its foreign currency reserves to a remarkable $ 500 billion (the fourth highest in the world), repaid its foreign debt, "floats" (or in other words depreciates) the Russian ruble to increase its competitiveness. Russian exports, "de-dollarized" farms to isolate Russia from the US financial system and balance the country's costs and revenues.

  Moscow rallies in July 2018 against a proposal by the Russian Government to raise the retirement age for men and women.

Russia also has a low oil unemployment rate, set at around $ 40-45 a barrel, which is the price the Russian state has to balance its budget every year. Oil is the largest export of the country and the basis of its war chest.

"People exaggerate, especially in Washington, the impact of gas on oil," says Edward Chow, a senior fellow at the Center for Strategic and International Studies. "For every dollar that Russia makes from oil and gas, 80 cents of it is oil and only 20 cents of it is gas."

But the Kremlin's policies were justified in striking the pocketbooks of everyday Russians. GDP has remained slow since 2014 – holding between 1% and 2% annual growth – as real wages in Russia have stagnated over the past five years and consumer debt has almost doubled over the same period. The Kremlin plans to spend trillions of rubles on "national projects" to stimulate the economy, but they are unlikely to significantly stimulate economic growth.

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growth remains low, shrinking economy will reduce Russia's ability to compete globally Miller has described its potential impact in this way: "Take foreign policy now, but lose the consequence later."

Some supporters of the West view the summer of discontent in Moscow and poor domestic growth as But the Putin regime, while probably worried about its long-term effects, does not view it as an immediate crisis.

"Putin is interested in macroeconomic stability because it focuses on sovereignty and wants to control the population in other countries. Achin, "Aslund said. "He is not interested in growth rates."

As the Russian president seeks alternatives to SWIFT – the global banking payment system in the West – and promotes closer ties with China, it is clear that being alienated from the western global economic club is of little importance.

Politicians and politicians in Europe and the US will continue to discuss the best approach to dealing with revenge Russia, but they cannot ignore the economic difficulties that Putin and the Kremlin politicians have built.

And if the United States takes additional sanctions on its own without the consensus of its allies and trading partners, it could damage the transatlantic relationship that has already been shaken by Trump's unpredictable presidency.

"I just don't see where they have achieved many results, and what they have done is – to the extent that they are being implemented beyond territoriality – further alienating some of our allies," Stent said.

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