The Political And Economic Results Of August 2014

In August 2014, Russia’s authorities announced that the funded component of labor pensions would remain frozen in 2015 – something that they had previously adamantly denied. This decision is fraught with numerous negative long-term consequences, including the erosion of the impetus to be paid over-the-counter wages and salaries. August saw an increase in the already acute competion for the resources of the National Welfare Fund (NWF), the main contesters being those Russian state-owned companies and banks that had begun to face difficulties with refi nancing their debts as a result of the sanctions imposed on them by the USA and the EU. In August, a lot of money was invested in the privileged shares in VTB and Russian Agricultural Bank (Rosselkhozbank), while Igor Sechin, chairman of Rosneft , asked the government to dole out Rb 1.5 trillion to help the state-owned giant oil company refi nance its debts. As no diplomatic solution to the military confl ict in eastern Ukraine has been found so far, the ongoing armed confrontation is fraught with risks of further escalation – which, in its turn, will inexorably result in the OECD imposing new sanctions against Russia..