Vladimir Putin has asked Russia’s oligarchs to donate to the country’s dwindling defence budget to continue its invasion of Ukraine, it has been reported.
The Russian president is expected to continue the conflict, which began in February 2022, until Moscow has secured the remaining areas of Ukraine’s eastern Donbas region not under its control, according to the Financial Times.
At least two businessmen have told Putin they would be willing to make contributions to the defence budget after talks on Thursday, the newspaper reported.
Putin is understood to be pressing ahead with the invasion after Ukraine refused to withdraw unilaterally from Donbas during recent negotiations brokered by the US.
Russia will be in contact with the US about a new round of talks on a peace settlement as soon as conditions allow, Kremlin spokesperson Dmitry Peskov said.
Peskov said Russia had not lost interest in peace talks but added that key issues – including territory – had yet to be settled.
The Kremlin’s defence bill has increased by 42% to reach Rbs13.1tn (£121bn) last year and it has sought to stabilise its economy through taxation.
The economy minister, Maxim Reshetnikov, said on Thursday that Russia was considering another windfall tax this year if the rouble continues to weaken. Russia raised Rbs320bn (£2.95bn) through a one-off 10% windfall levy on some large companies in 2023.
In January, the Kremlin increased VAT to 22% in a bid to raise an extra Rbs600bn over three years from small and medium-sized businesses.
Russia’s budget deficit for January and February swelled to more than 90% of the figure projected for the whole year as US sanctions forced Moscow to sell oil at significantly discounted prices.
Earlier, Putin cautioned that Russian companies and the government should take a guarded approach when deciding how to spend windfall gains from higher oil prices resulting from the war in the Middle East.
“Now that the prices of our traditional exports are rising, but the markets are in turmoil, there may be a temptation to take advantage of the situation,” he told business leaders in Moscow.
Putin added this temptation could involve squandering the extra revenue, paying it out in company dividends or, in the state’s case, expanding budget spending.
“We must remain prudent. If the markets swing one way today, they could swing the other tomorrow,” he added.
“A moderate degree of conservatism and a moderately conservative approach are needed, both in the corporate sector and in public finances.”
On Wednesday, the Ukrainian president, Volodymyr Zelenskyy, told Reuters the US is making its offer of security guarantees for a peace deal in Ukraine conditional on Kyiv ceding all of the country’s eastern region of Donbas to Russia.
Zelenskyy said: “The Middle East definitely has an impact on President Trump, and I think on his next steps.
“President Trump, unfortunately, still chooses a strategy of putting more pressure on the Ukrainian side.
“I would very much like the American side to understand that the eastern part of our country is part of our security guarantees.”