The true victors
Putin delivers a patriotic speech during Moscow’s Victory Day parade
Hello from the Bear Market Brief.
This week in the news:
Thousands of Russian soldiers and hundreds of combat vehicles took part in Moscow’s Victory Day parade.
During an interview that aired this week, President Putin discussed why Russia invaded Ukraine and his thoughts on choosing an eventual successor.
The Finance Ministry is reportedly considering tightening Russia’s “budget rule,” which would result in reduced fiscal spending in next year’s federal budget.
Ukraine launched its largest drone attack on Russia to date, causing mass delays in air travel across the country.
— Sara Ashbaugh, Editor in Chief
Victory Day in Moscow
On Friday, Russians celebrated the 80th anniversary of victory in World War II with parades across the country. The largest Victory Day parade took place in Moscow, where over 11,500 Russian soldiers marched across Red Square—including 1,500 servicemen from the “special military operation.” Military units of 13 other “friendly countries” also took part, from countries such as Belarus, Vietnam, Egypt, and China, among others. After an address by President Putin, the parade continued, showcasing almost 200 tanks and dozens of armored vehicles, personnel carriers, and artillery systems. For the first time, it also featured trucks carrying combat drones, likely because of their prominent role in the war in Ukraine. A flyover by fighter jets concluded the parade, painting the sky in the vibrant red, blue, and white of the Russian flag.
After several years of relative international isolation following the full-scale invasion of Ukraine, this year saw a significant increase in the number of foreign officials attending Russia’s Victory Day celebrations. 27 world leaders visited for this year’s parade, the largest number since 2015. This is a sharp increase from previous years; in 2022, no foreign leaders were in attendance, and last year there were only 9. This year, the leaders of almost every post-Soviet country (excluding Ukraine, Georgia, Estonia, Latvia, and Lithuania) were present, as well as the leaders of Brazil, Burkina Faso, China, Cuba, Egypt, Ethiopia, the Republic of the Congo, Venezuela, Vietnam, and Zimbabwe, among others. The heads of Serbia and Slovakia were the only European representatives to attend. The presence of Chinese President Xi Jinping is of particular significance, highlighting the increasingly close ties between Russia and China. The Chinese leader sat next to Putin during the parade, wearing the orange and black St. George ribbon that symbolizes Russian military might. This year’s attendance by foreign leaders is evidence of Putin’s success at finding allies in Asia, Africa, and South America. It also speaks to his ongoing attempts to counter Western hegemony by creating a “multipolar world order.”
Although most of Putin’s Victory Day speech was focused on commemorating World War II, he also mentioned Russia’s present-day war in Ukraine. “Russia has been and will continue to be an indestructible obstacle to Nazism, Russophobia, and anti-Semitism,” he said, hinting at a common claim by Russian media that Russian troops are fighting neo-Nazis in Ukraine. He then added, “The whole of Russia, our society, and all people support the participants in the special military operation.” Additionally, he noted that Russia will not support a “distortion” of the history of World War II, perhaps in reference to a remark made by Donald Trump last week that the U.S. “did more than any other Country, by far” to win the war. Russia “will never agree with the distortion of those events or attempts to justify the murderers and slander the true victors,” Putin said.
Last Monday, Putin declared a unilateral three-day ceasefire in Ukraine from May 8-11 to coincide with Victory Day. Despite this, Ukrainian officials have reported strikes continuing throughout the last few days, calling the ceasefire a “farce” and a “theatrical show.” According to the Russian Defense Ministry, Russian troops have “completely ceased combat operations” but are reacting in a “mirror-like manner” to attacks by Ukrainian forces. At least one person has been killed in Ukraine’s Sumy region as a result of recent Russian attacks. Ukrainian authorities continue to call on Russia to agree to the full 30-day ceasefire proposed by the U.S. and Ukraine. Only a full ceasefire will “enable peace negotiations and the real path to a fair and sustainable peace,” Ukrainian Foreign Affairs Minister Andrii Sybiha posted on X.
— Sara Ashbaugh
Thousands of Russian soldiers marched across Red Square on Friday during Moscow’s extravagant Victory Day parade. Russia’s first Victory Day parade took place in 1945, shortly after Germany’s surrender in World War II, but the event didn’t become an annual tradition until after the dissolution of the Soviet Union. May 9 was declared a national holiday in 1995 and has become an important patriotic celebration for Russians in the years since. Historically, Moscow’s Victory Day parade has been attended by a wide range of foreign dignitaries. Foreign participation dropped off significantly after Russia’s full-scale invasion of Ukraine in 2022; this year, however, 27 world leaders attended the event. (photo: Aleksey Maishev / RIA Novosti)
We watched Putin’s interview so you don’t have to
As part of a documentary that aired to commemorate Vladimir Putin’s 25 years in power (timed to coincide with Russia’s Victory Day celebrations), Russian state TV showed an interview with Putin by reporter Pavel Zarubin recorded earlier this year. The carefully choreographed talks aimed to present Putin as a modest and relatable person whose mind is focused on the concerns of the Russian people, while he is also in touch with his “historic” role. However, Putin also discussed some sensitive topics, such as the timing of the full-scale invasion of Ukraine and his eventual succession.
Talking about the invasion, Putin repeated the oft-heard story that Russia ostensibly tried to resolve the “Donbas issue” through peaceful means after 2014 (referring to the failed Minsk Agreements). He underlined that Russia as a state was not ready for a confrontation with the “collective West” in 2014, essentially framing the war in Ukraine as such from its very beginning and also portraying it as a “moral conflict.” The purpose of this was likely to suggest that the Kremlin never intended the “special military operation” to be a short affair. He also repeated his earlier claim that the West is “trying to provoke” Russia into using nuclear weapons in Ukraine. This remark was likely meant for Western consumption, underlining that Russia still has this option, at a time when ceasefire negotiations seem to be at a dead end.
Putin seemingly insisted on talking about his eventual successor in the interview, but ended up saying remarkably little about the topic, mentioning only that he is “constantly thinking” about it and that any potential candidate—or, as he stressed, several candidates—would have to command the trust of voters. Earlier, Putin had dismissed all talk about appointing a successor, so this remark itself could count as a shift. At the same time, Russia’s domestic politics have become increasingly personalistic over the past years, and Putin is aging. It is likely that the President feels that he periodically needs to confirm that he has not “selected” anyone in order to avoid a premature conflict over power in a post-Putin era (which could end with the defeat of his handpicked successor, thereby weakening Putin’s standing as well), focusing the conversation instead on maintaining the policies associated with Putin.
— Andras Toth-Czifra
Budget cuts coming?
OPEC’s decision to increase oil production is further worsening Russia’s prospects of collecting projected revenues from oil sales, after the general economic insecurity triggered by U.S. President Donald Trump’s tariffs cooled markets. For 2025, the government calculated revenues assuming an oil price of $69.70 per barrel, but, as of early May, the price was under $50, leading to a severe gap between projections and receipts in the first months of the year. This has caused the Finance Ministry to increase its deficit projection to 3.8 trillion rubles for the year, a record since the Covid pandemic.
The Finance Ministry is reportedly considering tightening Russia’s so-called “budget rule,” albeit officially they have denied this. The rule, which was suspended in 2022 to help the Russian government finance the war but reinstated in 2024, sets a cutoff price for Urals crude oil. Any oil- and gas-related revenues from exports over this price go to the National Welfare Fund (FNB), and, if oil is priced below the cutoff, the fund’s liquid reserves can be used to stabilize Russia’s budget. These liquid funds currently stand at 3.5 trillion rubles. The cutoff price is currently set at $60 per barrel, but Bloomberg’s sources claimed it could be lowered to $50 starting next year. This would essentially trigger a reduction in fiscal spending in next year’s federal budget, unless the government is able to compensate for the loss of revenues with higher tax receipts or a devaluation of the ruble (which risks inflation). Corporate and personal income tax rates did rise this year, but recent industrial production and consumption data suggest that economic growth is losing steam in non-military sectors. At the same time, defense spending is likely to remain high for the foreseeable future even if active fighting in Ukraine stops, suggesting that spending cuts, if they are deemed necessary, would most likely affect investment projects.
Analyses published by Raiffeisenbank and Bloomberg analysts over the past week suggest that Russia’s economy shrank by at least 0.3% quarter-on-quarter in the first three months of 2025, the first such drop since 2022. According to recent growth projections published by the Ministry of Economic Development, GDP growth this year is expected to drop to 2.5%, with a comparable slowdown in domestic demand and industrial production. In the Ministry’s conservative scenario, growth will slow to 1.8% this year on the back of low oil prices, with the ruble weakening to almost 100 against the U.S. dollar.
— Andras Toth-Czifra
Chinese President Xi Jinping arrived in Russia on Wednesday for diplomatic talks with President Putin before attending Moscow’s grand Victory Day parade. Putin and Xi held two rounds of talks on Thursday, as well as an informal discussion about the war in Ukraine, Chinese reports said. In a joint statement, Putin and Xi reiterated their commitment to “decisively counter Washington’s course of ‘dual containment’ of Russia and China,” and Xi promised solidarity with Russia against “hegemonic bullying” from the West. Putin also announced plans to visit China in September to commemorate the anniversary of victory over Japan in World War II. (photo: Grigory Sysoyev / Host agency Ria Novosti / Handout via Reuters)
Largest-ever Ukrainian drone attack on Russia
On Tuesday, Ukraine carried out its largest drone attack on Russia to date, triggering air travel restrictions in airports across the country. According to the Russian Defense Ministry, a total of 524 drones were involved in the attack, including at least 19 that were shot down near Moscow, raining debris upon the city. Local authorities reported drones in the Voronezh and Penza regions as well and an attack in Kursk that cut off power to the city of Rylsk. Drones also targeted the Mordovia Republic and the Tula and Yaroslavl oblasts.
In response, Rosaviatsia, Russia’s Federal Agency for Air Transport, imposed temporary flight restrictions on more than a dozen airports, including all four in Moscow: Sheremetyevo, Vnukovo, Domodedovo, and Zhukovsky. Flights were grounded in the cities of Samara, Kazan, Yaroslavl, Volgograd, Nizhny Novgorod, Nizhnekamsk, and Kirov as well, among other places. Major airlines (such as Aeroflot and its subsidiaries Rossiya and Pobeda) warned passengers of ongoing flight cancellations and delays. According to the Russian Association of Travel Agencies, by Wednesday, more than 350 flights and 60,000 passengers had been affected by the disruptions. “Planes that didn’t arrive at their destination on time will be late for other flights. This delay will trigger the next delays like a domino effect,” the Association said.
The attack came just days before Moscow’s Victory Day parade, which was attended by world leaders from more than two dozen countries. Serbian President Aleksandar Vučić was among those reportedly affected by the flight disruptions; his plane was forced to make an emergency stop in Azerbaijan before eventually arriving in Moscow. By Thursday, however, the Russian Ministry of Transport reported that all major Russian airlines had resumed regular operations, and Rosaviatsia said that the situation in Moscow’s airports had stabilized. President Zelenskyy had earlier warned foreign leaders that it may not be safe to attend Russia’s Victory Day parade. “Our position is very simple: we cannot take responsibility for what happens on the territory of the Russian Federation,” he said. On May 7, Zelenskyy briefly commented on the flight disruptions during his daily video address, saying, “It is absolutely right that the Russian sky, the sky of the aggressor state, is also restless today.”
— Sara Ashbaugh
Report in Short: The War’s Impact on Russia’s Regional Power Dynamics
This week on Report in Short, Aaron Schwartzbaum speaks with András Tóth-Czifra about his recent report, “The Kremlin’s Balancing Act: The War’s Impact On Regional Power Dynamics.” In the report, Tóth-Czifra explains the shift of government control, highlights instances of pushback, and identifies limitations on the Kremlin's strategy going forward.
Quickfire: Regions
Chechnya’s leader Ramzan Kadyrov told the government-controlled outlet Chechnya Today that he wanted to “step down” from his position, quickly adding in a follow-up Telegram post that only Vladimir Putin could make this decision. This is not the first time that Kadyrov has said something like this—he has made similar statements over the past years. Rumors about the ill health of the Chechen leader abound, and Kadyrov has been promoting his children to senior government positions (most recently, he appointed his 17-year-old son to head the Chechen Security Council). However, these statements are usually attempts by Kadyrov to solicit attention or additional funds from the Kremlin or to showcase his special relationship with the Russian President. Just days after the above statements, Putin met Kadyrov in the Kremlin and apparently advised him not to resign.
Due to a massive wave of drone attacks by Ukraine, Russian authorities were forced to call off Victory Day parades in several regions, as well as occupied Crimea. In several southern regions, regional authorities cited elevated risk of drones and “terrorism.” The drone attacks also paralyzed air traffic and left thousands of passengers stranded at airports across the country, as far east as Siberia. Air traffic disruptions have been especially severe this year, but “Victory Day” parades were scrapped in several regions over the past two years as well. Parades this year are especially significant, as 2025 is the 80th anniversary of the USSR’s victory in World War II, and the Kremlin likely wanted to showcase Russia’s reopening and imminent victory in the war in Ukraine. Several regional authorities were planning to hold events that they had been forced to cancel over the past years.
Local authorities in Bashkortostan’s Abzelilovsky District banned protests against copper mining near the Kyrktytau mountain range, citing Covid-era restrictions. The protest movement, which started in April, is trying to prevent the development of a mine owned by the Russian Copper Company due to expected pollution affecting the Maly Kizil and Bolshoy Kizil rivers. In 2020, similar protests forced the company to suspend the project, but it was later reopened. The developments highlight both that environmentally damaging industrial projects remain a pressure point in Bashkortostan—where the protection of natural resources often also takes a cultural dimension (as in the above case)—and that the Russian authorities are using various emergency measures introduced in different contexts to quell dissent.
— Andras Toth-Czifra