What happened on the 108th day of the war in Ukraine

Evgeny Schmilk goes back to work on Sunday. To make it, he pulled the familiar “M” out of his McDonald’s shirt and covered the “M” in his McDonald’s jacket with the Russian flag patch.

Mr. who maintains equipment at a restaurant in Moscow. Schmilkin promised, “It will be the same buns.” “Under a different name.”

McDonald’s restaurants in Russia are reopening this weekend, but without the Golden Arch. After the American Fast Food Company Pulled out this spring President Vladimir V on Ukraine. In protest of Putin’s invasion, the Siberian oil boss bought its 840 Russian stores. He said that since almost all the ingredients came from within the country, restaurants could continue to serve the same food.

Gambling, which underscores the dramatic slowdown in the Russian economy, could work in the face of one of the most serious sanctions ever imposed by the West. Three and a half months to the war, sanctions – and The flood of Western companies Voluntarily left Russia – failing to completely dismantle the economy or Mr.

Russia, Mr. Putin’s 22 years in power have been spent integrating into the world economy. It is not easy to unravel business relationships that are so big and intertwined.

Of course, the effects of sanctions will be deeper and broader, and its effects will begin to emerge. The standard of living in Russia is already declining, economists and traders say, and the situation will worsen as import stocks run lower and more companies announce layoffs.

Some of Russia’s own efforts may be lower than Western standards. Lada Granta’s first post-barrier model – a Russian sedan co-produced by French automaker Renault this spring – rolled down an assembly line at a plant near the Volga on Wednesday, with no airbags and no modern pollution controls. Or anti-lock brakes.

debt…Maxim Shipenkov / EPA, via Shutterstock

But the economic downturn was not as rapid as some experts had hoped after the February 24 invasion. Inflation is still high, at 17 per cent year-on-year, but it has fallen from a 20-year high in April. A meticulously observed measure of factory performance, the S&P Global Purchasing Managers Index, Showed Russian production expanded in May for the first time since the war.

Behind the positive news, Mr. Important among them: higher energy prices, while allowing the Kremlin to finance the war, raises pensions and wages to appease ordinary Russians. The country’s oil revenues Are up 50 percent this year.

In addition, Efficient work of the Central Bank After the invasion there was a panic in the financial markets and the ruble helped to recover from its initial decline. Store shelves are, for the most part, stockpiled due to the large number of inventory and alternative import routes established through countries such as Turkey and Kazakhstan and the low purchases by Russian consumers.

Even the new Lada Granda is much lower than the audience expected: despite the lack of foreign components, it still comes with power steering and power windows.

“Everything is not as bad as expected,” said a Russian car website Announced.

The survival of the Russian economy strengthens Mr. Putin’s hand by reinforcing his story that Russia will stand tall in the face of the West’s determination to destroy it. He met young entrepreneurs in a townhall-style on Thursday, his latest attempt to keep them interested in how the economy works and moves foreign trade, even as he wars. He stressed that while the West does not trade with Russia, other parts of the world do.

debt…Photo by Michael Mitzel’s pool

“We are not going to have a closed economy,” he said. Putin asked a woman about the consequences of sanctions. “If someone tries to control us in something, they control themselves.”

For the rich, luxury goods and iPhones are still widely available, but the more expensive ones are shipped from the Middle East and Central Asia to Russia. The poor have been hit hard by rising prices, but last month Mr. They will benefit from the pensions announced by Putin and the 10 percent increase in the minimum wage.

Most affected by the economic downturn are the urban middle class. Foreign goods and services are now hard to come by, Western employers are leaving and overseas travel has become harder and more expensive to curb.

But Natalia V., an expert in social and political geography at Moscow State University. Zubarevich notes that many middle-class Russians have no choice but to adapt to a lower standard of living: at least half of the Russian middle class, he estimates, work for state or state-owned enterprises.

“Sanctions are not going to stop the war,” Ms Zubarevich said in a telephone interview. “The Russian public will tolerate and change it, because it understands that there is no way to influence the state.”

Chris Weifer, a major economic adviser who has been focusing on Russia for a long time, released a note to his clients last week saying, “Some of our previous assumptions are wrong.” The note says inflation and the contraction of the economy turned out to be less severe than expected. His firm, Macro-Advisory Eurasia Strategic Consulting, revised its forecast to show a slight decline in GDP this year – 5.8 per cent over 7 per cent – and predicts a prolonged recession next year.

In a telephone interview, Mr. Weifer described Russia’s economic future as “more sluggish, more fragile”, lower incomes, but basic goods and services still exist. A large juice company, for example, Warned Customers say all of its boxes will soon turn white due to a shortage of imported ink.

debt…Natalia Kolsnikova / Agencies France-Press – Getty Images

“The economy is now moving almost to a stagnation, where it can avoid a recession,” he said. “This is a very basic stage of economic existence, which Russia may continue for some time.”

On Friday, as inflation stabilized, Russia’s central bank cut its key interest rate to 9.5 percent – the pre-invasion level. On February 28, the bank raised it to 20 percent to relieve the financial crisis. The ruble is currently trading at a four-year high, after falling in value in the days following the invasion.

One reason for the ruble’s unpredictable strength is the growing global demand for energy from the plague. In June alone, the Russian government expects more than $ 6 billion in airflow due to higher energy prices than expected, the Ministry of Finance Said Last week.

At the same time, Russian consumers are spending less – and giving Russian companies time to accelerate the ruble and set up new import routes.

However, Russian officials acknowledge that more difficult times are yet to come for the economy. The head of the central bank, Elvira Nabiullina, said on Friday that “the impact of the sanctions was not as severe as we initially feared,” adding that “it would be too early to say that the full effect of the sanctions has emerged”.

For example, it is not clear how Russian companies can obtain microchips used in a variety of products. Mr. with businessmen. At the Putin meeting, one developer said he was “very concerned about our microelectronics”.

Mr. Putin: “Me too. Honest ”

debt…Maxim Shemetov / Reuters

The ties that have tied Russia’s economy to the West have been dysfunctional for decades, sometimes more than a century. Aeroflot, the national carrier, acquired the new Boeing and Airbus jets and designed itself as a convenient transportation aircraft for people traveling between Europe and Asia. In the Ural Mountains, a factory worked with the German manufacturer Siemens to produce modern trains to replace the rusty Soviet stock.

By banning the use of European airspace, Aeroflot is now focusing on domestic routes and working to switch to Russian aircraft – which has been going on for years. Siemens, which created telegraph lines throughout the Russian Empire in the 1850s and helped bring the country into the industrial era, announced its withdrawal from Russia last month.

“Sanctions are suffocating the economy, and it will not happen all at once,” said Ivan Fedikov, who runs Infoline, a Russian market consulting firm, which advises companies on how to survive under current restrictions. “We’re only 10 to 15 percent aware of their effect.”

But when it comes to food, at least, Russia is still ready. When McDonald’s opened in the Soviet Union in 1990, the Americans had to bring everything. Soviet potatoes were too small to fry, so they had to buy their own rosette potato seeds; Soviet apples did not work for the bag, so the company imported them from Bulgaria.

debt…Via Reuters

But by the time McDonald’s left this year, its Russian stores had received almost all of their supplies from Russian suppliers. So when McDonald’s, It employed 62,000 workers in Russia, “Unnecessary human suffering in Ukraine can not be ignored,” said Alexander Kovor, one of its Siberian owners, who was able to open 25 restaurants, announcing in March that it would cease operations. Last month, he bought McDonald’s entire Russian business for an undisclosed amount.

Sunday – Russia Day, a patriotic holiday – he reopens 15 stores in Moscow’s Pushkin Square, including former Chief McDonald’s, in 1990. Thousands of Soviets lined up popularly For a taste of the West. The chain will operate under a new brand that has not yet been released, although a new logo has been released, which is said to represent a hamburger and French fries.

According to a menu, the hash browns go by the Russian name Leaked For a Russian tabloid. Also, since the secret sauce is proprietary, no Big Mac will be offered.

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