Russia Reform Monitor: No. 2082

July 5:

Russia's rainy day fund is running out. According to The Moscow Times, current draft governmental estimates project that the country's official Reserve Fund will be depleted next year, forcing the Kremlin to begin dipping into the National Welfare Fund to meet federal spending requirements. The Russian government is not, however, mulling cuts in spending. "The ministry is not planning significant cuts to Russia's expenses in anticipation of the State Duma and presidential elections," which are slated to take place this Fall and next Spring, respectively. Instead, "Russia will fill holes in its budget caused by a consistent decline in gross domestic product using funds and loans," with domestic borrowing predicted to increase "four or five times within three years."

July 6:

Russia's Defense Ministry is shaking up the country's Baltic Fleet. According to The Moscow Times, the Ministry has announced a purge of the Fleet's entire senior and mid level command - a move unheard of since the Stalin era, and a sure sign of deep structural problems within the body that Western officials and experts identify as one of the main threats to Western ships in Europe.

July 8:

NATO's latest summit in Warsaw, Poland has concluded with a commitment to further reinforce the Alliance's eastern flank against Russian aggression. London's Guardian newspaper reports that, at the high-level meeting, President Obama announced that the United States will be deploying 1,000 additional troops to Poland next year in a move meant to reinforce Polish defenses - and expand the Alliance's deterrent capabilities vis-a-vis Moscow. The additional U.S. troops will make up one of four new battalions being fielded by NATO in Eastern Europe as part of the bloc's response to Russia.

July 9:

In a diplomatic spat reminiscent of the Cold War, Russia has expelled two U.S. diplomats from the U.S. embassy in Moscow after Washington forced two Russian embassy staff members out of the country.According to the BBC, the tit-for-tat began when a Russian policeman attacked a U.S. diplomat near the U.S. embassy in Moscow. Russian officials claim that the diplomat was a CIA agent who refused to show identification papers when prompted, although video evidence does not support this claim. Washington has pointed to rising instances of harassment against U.S. diplomats by Russian security and intelligence services.

July 10:

Germany's federal police is raising the alarm over what it views as the growing presence of the Russian mafia in the country. "We are experiencing Russian-Eurasian organized crime as very dynamic," Deutche Wellereports Holger Munch, the president of Germany's Federal Criminal Office (BKA), as telling journalists. "It is currently expanding the West." According to BKA estimates, as many as 40,000 persons living in Germany may have a connection with the Russian underworld, while ten percent of Germany's inmates are Russian-speaking, providing Russian organized crime with "great potential for recruitment" among Germany's criminal class.

July 11:

The Kremlin continues to expand its military plans for the Arctic. According to Itar-TASS, Russia's Defense Ministry is planning to construct 10 airfields in the region as part of a larger plan to strengthen the Russian government's hand there. "Russia's Federal Agency for Special Construction (Spetsstroy) is building military infrastructure facilities on six islands in the Arctic," the news agency reports, citing the Izvestia newspaper. According to Russian government officials cited by the paper, "more than 100 tons of material resources for more than 150 facilities - lighthouses, islands, military units are planned to be delivered to remote military garrisons."