Putin should have accepted Trump’s deal. Now Russia’s collapsing economy could lead to his downfall | Simon Tisdall

P.Britons who think they are ruled by fools should take a closer look at the Russian and American presidents. Vladimir Putin is systematically ruining his country. The war he chose in Ukraine is an economic, financial, geopolitical and human calamity for Russia, which is getting worse day by day. For his own obscure reasons, Donald Trump, another national threat, offered him a lifeline last week. Yet Putin rejected it. These two idiots deserve each other.

On the table in Moscow was a “peace” deal that, broadly speaking, rewarded Russia’s aggression by ceding large parts of Ukrainian territory, compromised kyiv’s independence, and weakened its defenses against any future attack. The Trump deal, if imposed, would have divided the United States and Europe; the breakup of NATO, perhaps fatally; he pardoned Russia’s pariah economy; and probably overthrew the government of Volodymyr Zelensky.

These are Russia’s main war objectives. But Putin, suffering from neo-imperial fantasies and inheritance problems, said “no”. He believes he can achieve everything and more by continuing to fight. He has persuaded the idiot Trump that Russia’s victory is inevitable – and that European intriguers are the real warmongers. Yet its premise is fundamentally flawed. The concrete facts confuse him. Nearly four years later, he is still stuck in the mud and ice of Donbass. And at home, everything is falling apart.

After two years of growth artificially fueled by higher defense spending, Russia’s oil and gas revenues, which account for up to 50% of state revenue, are down 27% year-on-year, and a recession looms. Inflation is rising, at 8%; interest rates exceed 16%. The budget deficit is growing, more than half of Russia’s liquid sovereign wealth funds have been squandered since 2022, state monopolies are facing huge debts, foreign investment has plummeted, import costs for strategic goods have increased by 122%, and consumption taxes are skyrocketing, all to finance Putin’s war. Russians even have to pay more to drown their sorrows: the price of vodka has increased by 5%.

The pain gradually gets worse. Ukraine has identified a weak point: refineries, pipelines and the “ghost fleet” of Russian tankers carrying illicit exports. A third oil tanker was set ablaze last week in the Black Sea by naval drone strikes. kyiv regularly strikes energy facilities in Russia’s heartland, causing panic and fuel shortages. Meanwhile, Russia’s two energy giants, Rosneft and Lukoil, are reeling as Asian buyers, including in the vital China market, rush to avoid US secondary sanctions.

Putin’s economic ruin of Russia, while still ongoing, is accompanied by plummeting geopolitical influence. Mired in Ukraine, Moscow could only watch as Syria, a valuable Middle Eastern ally, turned westward and Iran suffered American and Israeli attacks. Today, Venezuela is also looking in vain for support. Ties with China have been upended, with a humiliated Russia relegated to the role of dependent junior partner. Visiting India last week, Putin appeared needy in a country which, following American pressure, is now boycotting Russian oil.

The narrative that “Russia is winning” is based on supposed successes on the battlefield. Yuri Ushakov, one of Putin’s aides, said recent territorial advances “had a positive impact” on Moscow’s negotiations – meaning they strengthened Russia’s hand. It’s illusory. The gains are marginal. Despite his surprise, full-scale invasion, and overwhelming advantages in manpower and material, Putin utterly failed to subdue Ukraine—a failure measured by the shocking Russian casualty figures: more than 280,000 killed or wounded in the first eight months of 2025; about a million in total.

How much longer will the Russian people tolerate their murderous dictator-president – ​​the Salisbury poisoner, the indicted war criminal – who, refusing all offers of peace, is now threatening war with Europe? This question is essential. Putin’s willingness to risk the lives and well-being of ordinary Russians is all too evident, symbolized by the cynical membership fees and death benefits paid to infantry volunteers from poor rural areas – whose average life expectancy on the front lines is 12 days. To top it off, payments have been reduced due to budget cuts.

These blood money schemes reflect a deep indifference to entrenched problems of poverty and demographic collapse, said independent journalist Alexei Kovalev: “Military spending temporarily masks decades of neglect, providing social mobility through carnage.” When the fighting stops, a “vast social crisis” could ensue, he suggested – and the Kremlin fears this, hence its crushing of public and online dissent. For Putin, this is another reason not to end the war. His crimes against his own people could yet be his downfall.

A new report from LSE experts, Against the clock: why Russia’s war economy is running out of time, found that although the war “significantly improved” the incomes of 20 percent of Russians, it created enormous social divisions. “For the majority of Russians, real incomes fell by 16% to 42%,” he says. Citing Wagner’s 2023 uprising, he predicts that deteriorating economic conditions could intensify tensions “within the elites and within the regime.”

The latest fiasco in US negotiations has once again exposed Trump’s idiotic and unbalanced “strategy” in Ukraine. By appeasing Russia from the start, he undermined Ukraine by attacking Zelensky and cutting off arms deliveries. Trump’s selfish eagerness to play the role of peacemaker and make a quick buck, the choice of incompetent relatives and cronies as amateur envoys, and attempts to sideline and pillory Europe all help and embolden Putin.

Trump’s interference prolongs the war. He should step down before he causes more damage – and Europe (and NATO) must step in with more weapons to Ukraine, reparation loans using seized Russian assets, fully implemented energy sanctions, tougher kinetic responses to sabotage and cyberattacks, and a more united resolve to help end Putin’s era of terror.

The Russian nation is too big to fail. Her proud wrestling history shows that she cannot be beaten. But Putin can. He loses, he doesn’t win. And sooner or later, like the tsars and totalitarians of old, this same eternal Russia whose name he glorifies will devour him and spit him out.