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While Putin Toasts Crimean Takeover, Average Russians Brace for Shortages

Mission accomplished? Russia's President Vladimir Putin (R) and Prime Minister Dmitry Medvedev attend a meeting in Yalta, Crimea on August 14, 2014. Source: Reuters
Riesling or a nice Bordeaux, Dmitry? Russia's President Vladimir Putin (r) and Prime Minister Dmitry Medvedev attend a meeting in Yalta, Crimea, on August 14, 2014.
  • Why it matters

    Why it matters

    While the Kremlin keeps itself stocked with pinot noir, average Russians are facing skyrocketing prices for basic foodstuffs.

  • Facts

    Facts

    • Sanctions imposed by the West are already being felt by Russian consumers as food costs soar.
    • Putin said Russia is considering leaving the jurisdiction of the European Court of Human Rights, which recently declared the country liable for €1.9 billion to shareholders of the defunct Yukos oil.
    • The Russian president will not tap the billions in surplus to help Russian companies damaged by the sanctions.
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    Audio

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As usual, the Kremlin took very good care of itself.

Before Russia slapped extensive agricultural ban on goods from the European Union, United States, Canada, Australia and Norway in response to the West’s sanctions on Moscow for its actions in Ukraine, officials for President Vladimir Putin’s office imported almost 1.1 million bottles of wine. That’s nearly a quarter more than in the first half of 2013 and a record amount overall. According to Russian customs officials, the imports included 294,400 bottles of German wine and 488,100 bottles of French wine.

So the Kremlin’s connoisseurs of fine Western vintages will continue to enjoy a steady supply. They will proudly be able to display the private wine cellars in their luxury villas along the affluent stretches of Moscow’s Rublyovskoye Shosse, where glossy magazines celebrate the good life in Russia.

But average Russians won’t likely be raising a glass in toast.

Prices are already soaring on many staples of the Russian diet. Salmon prices, for example, have risen 20 percent since the prohibition of imports from Norway with little hope that costs will drop in the foreseeable future. The €1.5 million ($2 million) in Norwegian fingerlings ordered by Russkoye More, a large-scale Russian fish trader, can’t be delivered in time for release in August, which will complicate their cultivation. Those with food allergies are sounding an alarm, too. Anyone requiring gluten-free food or other special foodstuffs will soon have difficulty finding them on supermarket shelves since most of those products are imported.

Yet in a keynote speech delivered to both houses of the Russian parliament at Yalta on the Crimean peninsula, Mr. Putin reveled in his defiance and again celebrated the conquest of territory. In remarks clearly directed at the West, he announced Russia might soon leave the jurisdiction of the European Court of Human Rights, which in July ordered the country to pay shareholders of the now, defunct oil company Yukos a total of €1.9 billion after finding Mr. Putin’s government forced its liquidation through bogus taxes and an auction of its assets. Exiting the court’s jurisdiction would represent a further turning-away from the West.

Mr. Putin emphasized that the commercial conflict with the West does not mean the end of all connections, but said: “We cannot allow them to treat us with disdain.”

To make Russia more independent from the West, but primarily to shield it from a potential decoupling of trade based on the dollar, the Mr. Putin announced his intention of increasingly calculating his country’s exports of oil and gas in rubles and other currencies. He views the dominance of the American dollar as damaging to the Russian economy. Moscow is “working at the moment on an agreement with several countries to conduct trade in our respective national currencies,” he said.

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