(C) Meduza This story was originally published by Meduza and is unaltered. . . . . . . . . . . The Real Russia. Today. Wednesday, June 4, 2024 — Meduza [1] [] Date: 2024-06-06 The war in Ukraine 👾 Ukrainian hacker group says it’s stolen 1.5 terabytes of auto-insurer client data: KibOrg claims to have gained access to the Russian Union of Auto Insurers' database and acquired “billions of personal records” from the past 15 years, though the auto union denies that its database was breached. iStories journalists studied some of the data released by the hackers and verified that it belongs to real Russian citizens. KibOrg is known for hacking the Russian travel company Sirena-Travel and Alfa-Bank's complete client base. KibOrg claims to have gained access to the Russian Union of Auto Insurers' database and acquired “billions of personal records” from the past 15 years, though the auto union denies that its database was breached. iStories journalists studied some of the data released by the hackers and verified that it belongs to real Russian citizens. KibOrg is known for hacking the Russian travel company Sirena-Travel and Alfa-Bank's complete client base. 🇺🇸 U.S. official confirms American missiles are now flying into Russia: Ukraine has used U.S. weapons to strike inside Russia in recent days, Senator Mike Rounds of South Dakota and another Western official told The Associated Press on Wednesday. A day earlier, White House national security spokesman John Kirby told reporters that the Biden administration is “just not in a position on a day-to-day basis of knowing exactly what the Ukrainians are firing at what.” Ukraine has used U.S. weapons to strike inside Russia in recent days, Senator Mike Rounds of South Dakota and another Western official told The Associated Press on Wednesday. A day earlier, White House national security spokesman John Kirby told reporters that the Biden administration is “just not in a position on a day-to-day basis of knowing exactly what the Ukrainians are firing at what.” 🪖 A ‘difficult situation’ southeast of Kharkiv, admits Syrskyi: Ukrainian Armed Forces Commander-in-Chief Oleksandr Syrskyi wrote on social media on Wednesday that the military faces a “difficult situation” in Kupiansk, southeast of Kharkiv. “The enemy is trying to break through our troops’ defenses from two directions. Intense battles are ongoing,” Syrskyi wrote on Facebook. He warned that Russian forces are attacking elsewhere, too, in an attempt to “stretch the line of the active front” and limit Ukraine’s ability to redeploy troops where needed. Meanwhile, journalists at Strana say Ukrainian soldiers report heavy losses in the Kupiansk region caused, the soldiers say, by the mistakes of their commanders, such as an ill-fated attempt to retake the village of Ivanivka, which was defended by 10 times more Russian soldiers than expected and protected by Russian drones that were supposed to be disabled by means of electronic warfare. In an analysis published by iStories, former Federal Tax Service analyst Dmitry Nekrasov argues that Russia can afford its current military costs indefinitely if oil prices hold steadily above $30 a barrel and labor shortages aren’t too severe. Nekrasov says Russia has defied expectations by growing its economy despite high defense spending, comparable to spending by countries like Saudia Arabia, the U.S., and Israel in the past few decades, based on records showing that Russia’s current defense spending amounts to 9 percent of GDP at maximum. He also points out that Russia’s war-time deficit spending (-1.9 percent of GDP in 2023) is still lower than peacetime deficit spending in developed countries. “Most of the war-related economic problems can be reduced to depleting the positive balance of foreign trade,” says Nekrasov, adding that Russia’s abnormally high positive balance of foreign trade before the February 2022 invasion of Ukraine gave Moscow enough of a safety margin to lose exports due to sanctions without suffering “devaluations, hyperinflation, and the inability to provide critical imports.” The Kremlin is “spending” its pre-war trade surplus on the war, he explains. Nekrasov says it’s normal for a country at war to see industrial and GDP growth (assuming it’s not the battlegrounds for the war itself), and economic decline is typical only in the early post-war years. “All this negatively impacts the long-term development of civilian sectors, but it allows addressing military tasks here and now,” he explains. Less typically, Russia has managed income and consumption increases during the war (real disposable income was 5.5 percent higher in 2023 than in 2021). He credits (1) high salaries for combatants and payments to soldiers’ families, (2) a spike in salaries at defense enterprises now filling more and more defense contracts, and (3) rising salaries in civilian sectors trying to retain employees from moving to the defense sector. Nekrasov says he thinks Russians’ war-time real income and consumer spending have nearly peaked and will likely start to backslide by the fall (thanks to inflation and declining social benefits now that Putin’s re-election is done), but there’s a buffer here, too, in high household saving thanks to high interest rates. In other words, household consumption is expected to lag significantly behind real income. According to Nekrasov, a significant and long-term drop in oil prices is probably the only economic factor that could reduce the Kremlin’s ability to finance its war in Ukraine from “indefinitely” to “just a few more years.” At the same time, he notes that a labor shortage could become Russia’s biggest economic problem if the war continues for several more years, especially if Moscow resorts to another mass mobilization (which would pull more men out of the labor force but also spark another wave of emigration). The war has limited Russia’s policy options in the event of a sudden economic slowdown. In this event, the Kremlin would have to choose between (1) the high inflation of a currency devaluation or (2) more domestic borrowing, higher interest rates, and spending foreign exchange reserves to maintain the ruble and growing deficits, which would draw more money away from civilian sectors, put downward pressure on household consumption, and slow overall GDP growth. Nekrasov acknowledges that Russia faces near-100-percent utilization rates in some sectors, which means military production will stop growing as quickly as it has in the last two years. He also stresses that the war’s distortions generally harm the economy, but the most serious effects will be felt only in the long term. Thus, Vladimir Putin can continue the war in Ukraine until oil prices plummet or he runs out of Russians. The Insider argues that Russia’s advance toward Kharkiv has stalled without achieving a “buffer zone” or “pulling Ukrainian Armed Forces reserves from other directions,” which military experts believe are the offensive’s main goals. At the same time, The Insider cites Ukrainian analyst Konstantyn Mashovets, who has speculated that Moscow actually had a large-scale plan to seize “the entire territory of the Kharkiv region east of the cascade of reservoirs of the Siverskyi Donets,” but he says Russian troops were underequipped and understaffed. The Insider says Russia’s offensive made early progress due in part to poorly constructed fortifications north of Kharkiv and Russian electronic warfare apparently succeeding in knocking out Ukraine’s Starlink satellite Internet access on the battlefield. Additionally, Ukraine’s defenses were still limited by Western restrictions on using their weapons to fire into Russian territory, where Russia was launching its longer-range attacks. The Insider credits Ukraine’s halting of the Russian advance in part to the decision to replace the commander of the Kharkiv operational and tactical troops, appointing Joint Chiefs Deputy Chairman Mykhailo Drapaty, who managed to stabilize the front by more effectively using the (growing) resources available to him. Mashovets has argued that Ukraine should nevertheless pull reserves from other areas, shifting the military’s attention to Kharkiv. But there’s no consensus on Ukraine’s vulnerability here, and Russian WarGonzo correspondent Semyon Pegov has even suggested that Kyiv might mount a counterattack in the region and push Russian troops back to the border again. Finally, The Insider compares the Kharkiv offensive to several past invasions and occupations of major cities (Kharkiv in WWII, Seoul during the Korean War, Baghdad in the U.S. invasion of Iraq, and the liberation of Mosul from ISIS). The outlet concludes that Russia lacks the overwhelming force required to capture a major city like Kharkiv and won’t attain this power for the foreseeable future. Russian politics and policy 📺 Harassing Navalny’s mourners in Volgograd: Television presenter Sergey Mazanov has devoted a second broadcast to filming and harassing locals mourning the late opposition leader Alexey Navalny. On June 4, Navalny’s birthday, Mazanov visited Volgograd’s monument to the victims of Soviet political repressions and recorded two people leaving flowers at the memorial in Navalny’s honor. Mazanov insisted that the small turnout shows that “many people are starting to see the light” (meaning that they’ve lost faith in the Navalny movement). In late March, following news of Navalny’s death in prison, Mazanov filmed mourners at the repression victims’ monument and later read the names of 15 of these individuals live on television. (Several of the people then filed a joint lawsuit against Mazanov, but local prosecutors refused to take the case.) Television presenter Sergey Mazanov has devoted a second broadcast to filming and harassing locals mourning the late opposition leader Alexey Navalny. On June 4, Navalny’s birthday, Mazanov visited Volgograd’s monument to the victims of Soviet political repressions and recorded two people leaving flowers at the memorial in Navalny’s honor. Mazanov insisted that the small turnout shows that “many people are starting to see the light” (meaning that they’ve lost faith in the Navalny movement). In late March, following news of Navalny’s death in prison, Mazanov filmed mourners at the repression victims’ monument and later read the names of 15 of these individuals live on television. (Several of the people then filed a joint lawsuit against Mazanov, but local prosecutors refused to take the case.) 📉 A lost decade for Gazprom: Citing a report commissioned for Gazprom’s leaders, The Financial Times reports that the energy company “is unlikely to recover gas sales lost as a result of Vladimir Putin’s full-scale invasion of Ukraine for at least a decade.” By 2035, Gazprom’s exports to Europe will likely average barely a third of their prewar levels, and China is buying too little gas at lower prices to make up for the lost business. Leaked documents from a source close to the Putin administration reveal that Russian propagandists have a new target in their sights: government critics and opposition supporters. In an attempt to win over this skeptical audience, they’ve been repurposing out-of-context clips from a popular YouTuber’s old interviews, adding their own messages in the descriptions. They’ve also tried coming up with news stories they think might attract the attention of independent Russian media outlets (like Meduza). We got The Beet. Don’t miss Meduza’s weekly newsletter (separate from the one you’re reading here)! The justice system and human rights ⚖️ Another journalist arrested in absentia for reporting on Bucha killings: A Moscow court has issued an arrest warrant for journalist Dmitry Kolezev, the editor-in-chief of the media outlet Republic and founder of the Yekaterinburg-based publication It’s My City, on felony charges of spreading supposedly false information about the Russian military’s atrocities in Bucha. Kolezev now lives abroad, but he would face up to 10 years in prison if he returned home and was convicted. A Moscow court has issued an arrest warrant for journalist Dmitry Kolezev, the editor-in-chief of the media outlet Republic and founder of the Yekaterinburg-based publication It’s My City, on felony charges of spreading supposedly false information about the Russian military’s atrocities in Bucha. Kolezev now lives abroad, but he would face up to 10 years in prison if he returned home and was convicted. ⚖️ Another streamer imprisoned for talking about the Bucha killings: A Moscow court sentenced online streamer Anna “YokoBovich” Bazhutova to 5.5 years in prison for spreading supposedly false information about the Russian military’s atrocities in Bucha. During a June 2023 broadcast, she read aloud the stories of Bucha residents who survived the Russian occupation. Bazhutova later deleted the video and said she recorded it while under the influence of new medication for a mental illness, but she maintained her innocence in court, presenting herself as a pacifist opposed to war. A Moscow court sentenced online streamer Anna “YokoBovich” Bazhutova to 5.5 years in prison for spreading supposedly false information about the Russian military’s atrocities in Bucha. During a June 2023 broadcast, she read aloud the stories of Bucha residents who survived the Russian occupation. Bazhutova later deleted the video and said she recorded it while under the influence of new medication for a mental illness, but she maintained her innocence in court, presenting herself as a pacifist opposed to war. 🇮🇷 A fine for the friendly-nation foreigner: A Moscow court fined an Iranian national 50,000 rubles ($560) for “discrediting” the Russian military by appearing in public in a sweatshirt bearing the Ukrainian flag and coat of arms A Moscow court fined an Iranian national 50,000 rubles ($560) for “discrediting” the Russian military by appearing in public in a sweatshirt bearing the Ukrainian flag and coat of arms 🎗️ Dual citizen headed to prison for ‘liking’ posts mocking the St. George’s ribbon: The St. Petersburg City Court has sentenced a dual U.S.-Russian citizen Yuri Malev to 3.5 years for “rehabilitating Nazism” for writing two posts on the social network Odnoklassniki. The first post showed the St. George ribbon (an emblem of military pride and historical memory in Russia) with an “obscene caption” that the court described as “an identifying mark of a person with a non-traditional sexual orientation.” The second post showed a photograph of a corpse with a caption reading, “How to wear the St. George’s ribbon properly.” An 86-year-old woman reported Malev to the police. Malev confessed to the charges but said he merely “liked” the posts, which Odnoklassniki reposted to his account’s page. As the world turns 💰 Loans for shares: Citing a “leaked discussion paper,” The Financial Times reports that the Biden administration is “ready to lead a loan of $50 billion to Ukraine repaid by profits from frozen Russian assets if the E.U. can indefinitely extend sanctions against Moscow.” Currently, the European Union’s sanctions on Russian state assets expire every six months without renewal by unanimous consent. European officials have been exploring a different option: “bilateral loans to Ukraine, backed by profits on Russian assets frozen in their own jurisdiction.” According to a new joint investigation by The Insider and the Moldovan news outlet Malenkaya Strana, Moldova’s former Joint Chiefs of Staff chairman, Igor Gorgan, served for years as an informant to Russian military intelligence. The journalists gained access to Gorgan’s secret Telegram correspondence with his GRU handler, Colonel Alexey Makarov. The messages show that Gorgan regularly reported on Moldova’s domestic affairs and visits by Ukrainian military officials, who came to buy weapons. Gordan also reportedly “constantly bombarded” his Russian curator with requests to send Russian troops to “cleanse the country of all fascist scum.” In July 2023, just before a mass expulsion of Russian diplomats from Moldova, Gorgan stopped communicating with his Makarov and got a job at the U.N. Refugee Office in Chisinau. Following Wednesday’s investigative report, Moldovan President Maia Sandu’s chief of staff, Adrian Băluțel, said Gorgan’s state awards and military ranks would be revoked. On the sidelines of the St. Petersburg International Economic Forum, Vladimir Putin met with senior journalists from 16 global news agencies (including from countries that the Kremlin has designated as “unfriendly”). During their conversation, Putin argued that the cause of the war in Ukraine isn’t Russia’s invasion but the “coup” that ousted Viktor Yanukovych from the presidency in 2014. He also claimed that Russia enjoys a 1:5 advantage in irreversible losses over Ukraine and said that Western military instructors are among the casualties. On prisoners, Putin said Ukraine currently holds 1,348 captured Russian soldiers, while Russia has 6,465 Ukrainian POWs. The recent announcements by Western powers permitting Kyiv to fire its weapons into Russian territory will lead Moscow to consider an “asymmetric response,” Putin warned, adding that this escalation “is a recipe for very serious problems.” Putin also said that long-range attacks are only possible through logistical coordination with NATO members because weapons like Storm Shadow and ATACMS require flight mission commands that are ostensibly beyond Ukraine’s own capacity. The Russian president argued that American elites are interested in the Ukraine war only insofar as it threatens their “own greatness” and Washington’s claim to world leadership. Putin said he doesn’t believe it matters who wins the U.S. presidential election in November, while also emphasizing that Biden is a “predictable, old-school politician.” Commenting on Trump’s recent felony convictions, Putin said, “They’re burning themselves down from the inside — their own state, their own political system — and I must say, whether it’s pleasant or not, they also burning down, right before our eyes, their supposed leadership among democracies.” Putin claimed that it’s “obvious to the world” that the prosecution of Trump is “a direct use of the judicial system” for “internal political conflict,” adding that he believes the trials only help Trump’s re-election chances. Putin said improvements in U.S.-Russian ties are possible if future administrations “change their goal orientation” in accordance with American society’s “shifting mood” toward “normal relations with the world.” Putin also praised Russia’s relations with Belarus, Azerbaijan (but not Armenia), Iran, and China, before criticizing Germany’s leaders for dismissing the German people’s interests by cutting energy ties with Russia (which also risks the health of the world economy, the president claimed). No country can be free without independent media. In January 2023, the Russian authorities outlawed Meduza, banning our work in the country our colleagues call home. Just supporting Meduza carries the risk of criminal prosecution for Russian nationals, which is why we’re turning to our international audience for help. Your assistance makes it possible for thousands of people in Russia to read Meduza and stay informed. 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