Putin can fund Ukraine war for years to come, ex-official says as Trump’s resolve is tested

Russian President Vladimir Putin has enough capital to fund the war in Ukraine for years to come despite economic pressure mounting, the former head of the country’s central bank told CNBC on Friday.

“The Russian economy is close to stagnation,” Sergey Aleksashenko, former deputy chairman of Russia’s central bank, told CNBC’s “Europe Early Edition.”

Aleksashenko said on Friday the “mood is not good,” with the Bank of Russia forecasting growth of just 0.9% for the country’s economy this year, compared with 4.3% last year.

But he added that the “glass is half full,” with the central bank gradually bringing inflation down and various industries moving in opposite directions.

Asked whether Putin has enough money to finance the war in Ukraine, Aleksashenko said: “Unfortunately, yes.”

“Despite all rumors, despite the growing budget deficit, despite the growing borrowings by the Minister of Finance, he has enough money to finance the war,” he told CNBC.

“I am quite sure that he is able to finance the war another two, three years, at least. Maybe more,” he added.

Russia’s full-scale invasion of Ukraine began in early 2022, with troops now in their fourth winter of conflict.

Aleksashenko’s comments came after NATO chief Mark Rutte issued a stark warning to allies that they were at serious risk of attack by Moscow.   

“We are Russia’s next target, and we are already in harm’s way,” he said in a speech in Germany on Thursday. “NATO’s own defenses can hold for now, but with its economy dedicated to war, Russia could be ready to use military force against NATO within five years.”

Despite international efforts to bring the war to an end, Putin has signaled he is willing to keep waging the war to achieve Russia’s aims. Last week, he warned that Russia would take a key Ukrainian territory “by force” if Kyiv’s troops did not withdraw willingly.

In a bid to ramp up the economic pressure on the Kremlin, European officials have announced proposals to use frozen Russian assets to support Ukraine’s reconstruction — a move that Russian officials have called tantamount to justification for war.

On Friday, Russia’s central bank announced it was suing Belgian clearing house Euroclear in a Moscow court “for recovery of losses caused to the Bank of Russia.”

“The actions of the Euroclear depository caused damage to the Bank of Russia due to the inability to manage cash and securities,” it said in a statement, according to a Google translation. It said the lawsuit was also “in connection with the mechanisms of direct or indirect use of the Bank of Russia’s assets without the consent of the Bank of Russia, which are officially being considered by the European Commission.”

Euroclear declined to comment, and the Belgian government had not responded to a request for comment when this article went live.

Ukraine and its European allies are also scrambling to keep U.S. President Donald Trump – whose administration wants a peace deal with both Moscow and Kyiv – onside.

While Russia has publicly touted its “alignment” with Washington, Trump has been hitting out at European leaders.

On Wednesday, he said he didn’t want to be “wasting time” discussing the peace plan with his European counterparts, according to NBC News, adding that he had already exchanged “pretty strong words” with officials in the region.

“Sometimes you have to let people fight it out, and sometimes you don’t,” he said.

Earlier this week, he claimed Ukrainian President Volodymyr Zelenskyy hadn’t read the U.S.′ draft peace proposal to end the war, while Russia was “fine with it.”

The proposal, initially drafted by the U.S. and Russia without input from Ukraine, has been altered from its original 28-point version that reportedly included Ukraine giving up land in its eastern Donbas region and slashing the size of its military. However, concessions of Ukrainian land and security guarantees for Kyiv remain sticking points in the peace plan, which Ukraine is reportedly under pressure from the U.S. to agree to before Christmas.

The White House said Thursday that the U.S. remained engaged in the peace process. But Press Secretary Karoline Leavitt told reporters that Trump was “extremely frustrated with both sides of this war” and “sick of meetings just for the sake of meeting.”

Trump spoke with the leaders of the U.K., Germany, and France in a call on Wednesday, and Leavitt said the president was “aware” of a fresh proposal sent by Ukraine’s Zelenskyy.

“He doesn’t want any more talk, he wants action. He wants this war to come to an end,” Leavitt said of Trump during the press briefing. “The administration has spent more than 30 hours, just in the past couple of weeks, meeting with the Russians and the Ukrainians and the Europeans.”

“If we feel like those meetings are worthy of someone on the United States’s time this weekend, then we will send a representative,” she added.

— CNBC’s Holly Ellyatt and Silvia Amaro contributed to this article.