Ukraine war sets Russian economy back by a century

Industrialists call for the re-legalization of "patriot companies", corporate boxes that allow unrestricted access to market dynamics. The State should take over the debts of companies in difficulty. Russian banks ready to insure companies for 2 trillion rubles.

Moscow (AsiaNews) - A request from the business world in these days, when the weight of Western sanctions for the invasion of Ukraine is beginning to be felt, re-proposes in Russia the scenarios of the late 90s of last century, when the conversion to capitalist liberalism led to a severe economic crisis due to the collapse of the "financial pyramids". Entrepreneurs are now proposing to lift the ban on "firms-matrioške," the corporate boxes that allowed unrestricted access to market dynamics.

The authorities introduced the ban in 1995, when the perverse effects of the indiscriminate openings of three years earlier, with the drastic shift decided by Yeltsyn to the liberalist economy, were beginning to be noticed. In order to prevent possible fraud, the measure prevents company A from owning 100% of company B, which in turn owns 100% of company C. According to the Russian Union of Industrialists, such frauds would be impossible today, given the absolute control of state bodies over the entire economy.

The chairman of the Union of Industrialists, Aleksandr Šokhin, sent a letter to the chairman of the Duma Committee on Property Issues Sergey Gavrilov. He called for the extension of a rule approved in recent weeks at first reading, which allows the state to transfer 100% of shares to companies that in turn belong 100% to the Russian Federation. Currently, the state reserves a "golden share" in these companies, which is now being asked to be eliminated, and to extend the rule to all commercial companies.

In order to make these changes it will be necessary to introduce significant changes in the Civil Code and many other laws, bringing regulations back to a much more rudimentary level of state capitalism, which will in any case prevent a return to the open economy of the last two decades, with the participation of large international companies.

The main motivation for these demands is to prepare for the inevitable bankruptcy of many companies, due to market contractions caused by sanctions, and to restructure the whole economy in order to shelter under the protective wing of state structures. It will be an economy in some ways more similar to the Chinese one, where, however, the State has always maintained its own strength and control, as Gorbačëv hoped to achieve in the "perestroika" which failed at the end of the 80s.

Overcoming the ban on "matrioške" will help firms precisely by forming "secondary" companies and leaving "bad companies" to the State, as Forward Legal's lawyer Julia Bunygina believes, skipping many bureaucratic steps. Issues between partners and heirs will also have to be resolved, and this too will be simplified by state intervention, which as an initial reaction to sanctions had increased taxes on companies, and is now gradually decreasing them precisely in view of restructuring.

The president of the Central Bank of Russia, Elvira Nabiullina, has assured that Russian banks are ready to offer major mortgages of up to 2 trillion rubles, a quarter more than last year. Her ability to govern these processes is why Putin confirmed her for another term, despite her criticism and skepticism about the future of the Russian economy after the war in Ukraine.

• russia
• economy
• business
• sanctions
• war
• invasion
• ukraine