Financial institutions hesitate: Putin is pushing Russian banks into occupied territories

Financial institutions hesitate
Putin pushes Russian banks into occupied territories

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Russia is consolidating its rule over the part of southern Ukraine that was annexed in violation of international law. President Putin is also putting pressure on financial institutions. So far the banks have not really wanted to follow suit.

Russian President Vladimir Putin has called on his country’s banks not to hesitate and operate in the annexed territories of Ukraine. “What they once feared, the sanctions, has long since happened. Why be afraid?” said Putin in Moscow at a meeting on the region’s social and economic development. “You have to go to these areas more actively and work there,” he said, according to the Tass agency.

In 2014, Russia annexed the Ukrainian peninsula of Crimea in violation of international law. After the 2022 invasion, Moscow also declared the Ukrainian administrative regions of Donetsk, Luhansk, Zaporizhzhia and Kherson to be Russian territory, in violation of international law. Russian troops only control part of these territories militarily. Russian banks were already cautious about getting involved in Crimea because of Western sanctions. They are also hardly represented in the other regions.

Putin spoke of a rapid integration of the territories into Russian structures. The Kremlin leader set the goal of bringing the areas that – as he claimed – historically belonged to Russia, to an average Russian standard of living by 2030. Two million people were already receiving regular pensions and other payments, he said. By 2025 there should be five million people. In fact, the occupying power ties the payment of pensions and social benefits to the Ukrainians living there accepting Russian passports. The fear of deportation from their own homeland also leads some people to exchange their Ukrainian passport for a Russian one.

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