Russia Policy Monitor No. 2683

July 7, 2025 Ilan I. Berman, Eleanor Pugh

Related Categories: Economic Sanctions; Europe Military; Warfare; Arctic; Europe; Russia; Ukraine

TARGET: FINLAND
In tandem with its ongoing war on Ukraine, Russia is showing clear signs of a broader strategic expansion in other directions, in line with the Kremlin's designs over former Russian territories and holdings. For instance, recent satellite images reveal significant Russian military activity in its northwest, bordering Finland, indicating plans for permanent expanded military presence there – and potentially setting the stage for a push by the Kremlin into the Nordic nation.

Previous Russian military development in the area – including the construction of equipment halls in Alakurtti and Petrozavodsk, and the establishment of a tent camp on the Karelian Isthmus – could be chalked up to the immediate goal of supporting Russia's ongoing Ukraine campaign. But now, Moscow has begun building a new garrison in the military town of Kandalaksha, located 100 km from the border with Finnish Lapland, intended to house a new artillery brigade and part of an engineer brigade. Additionally, apartments, community centers, and schools have been built or renovated in bordering regions to support military families who relocate there. Forty-two billion rubles, or about 460 million Euros, have reportedly been allotted for the renovation of military towns in the Murmansk Oblast.

Significant military upgrades have also been observed at the Sapyornoye garrison on the Karelian Isthmus, which previously saw low levels of military activity in recent years. Sapyornoye, located just 70 kilometers from the Finnish border, has received recent deliveries of a variety of new military equipment, indicating it could be intended for an engineer brigade. The nearby Kamenka garrison appears to be in the process of an upgrade from a motorized infantry brigade to a division, entailing an increase in troops from 4,000 to 10,000.

The conclusions being drawn in Helsinki are ominous. "If the sole purpose was to send the troops to Ukraine, there would of course be no need for such infrastructure there," Marko Eklund, a Finnish military expert, says. (Yle.fi, June 18, 2025; Kyiv Post, June 18, 2025)

RUSSIA'S ECONOMIC WOES
The Russian economy is now "on the brink of going into a recession," Economy Minister Maxim Reshetnikov has warned. Reshetnikov made the pronouncement at the recent St. Petersburg International Economic Forum. It represents a somber assessment, and a contrast to more rosy views by the likes of Finance Minister Anton Siluanov and Central Bank Gov. Elvira Nabiullina. Reshetnikov counseled that, while the country has fared better than predicted as a result of high defense spending that has bolstered economic growth and injected money into the country's poorer regions, rising inflation and ongoing sanctions, as well as a lack of foreign investment, remain ongoing threats to the Russian economy. Whether Russia's economic condition continues to worsen, he said, "all depends on our decisions" – a thinly-veiled reference to the ongoing war in Ukraine. (Associated Press, June 19, 2025)

A GRIM MILESTONE FOR MOSCOW
Last month, despite official silence from the Kremlin, Russia marked a grim milestone in its ongoing effort to dominate neighboring Ukraine. The British Ministry of Defense estimates that Russia has now reached one million wartime casualties in the conflict. The Center for Strategic & International Studies, a Washington think tank, confirms the projection, pinning deaths at 250,000 and total casualties at over 950,000. That death toll is five times greater than fatalities from all Soviet and Russian wars combined since World War II. Russia's funeral industry has boomed as a result, charting earnings of 40 billion rubles from January to April 2025, a 12.7% year-on-year increase. (The Guardian, June 22, 2025)

MORE FODDER FOR THE UKRAINE FIGHT
Adequate manpower to prosecute its war on Ukraine has been a persistent problem for Moscow, and Russia's government continues to search for ways to bolster its forces. The latest effort comes courtesy of the lower house of Russia's legislature, the State Duma, which passed a new law allowing stateless individuals to join the Russian military under contract. Previously afforded only to Russian citizens and foreigners, this law will allow those from annexed regions, who have lost their Ukrainian citizenship but not yet gained Russian citizenship, to join Russia's military ranks (and profit as a result).

Another cohort is also at play. Andrey Kartapolov, chairman of the State Duma's Committee on Defense, said that this will expand the opportunity to serve Russia in the military for the "many residents of European countries who move to Russia [and] face the revocation of their citizenship." According to the FSB Border Service, 89,000 stateless individuals entered Russia in 2024 for reasons other than tourism or transit. (Meduza, June 24, 2025)