The EU sanctions chief, Irish diplomat David O’Sullivan, warns that Russia’s economy is on the brink of collapse.
In a statement to the Redaktionsnetzwerk Deutschland, O’Sullivan described the economy as being in a “devastating state” with all key indicators displaying red signals. He explained that the country is slipping into a recession, grappling with public‑finance deficits, inflation, and very high interest rates. Banks are burdened with low‑quality loans that the Russian industry had to take out to finance its war effort, and many firms may soon be unable to repay them. “Russia is close to a financial crisis, comparable to the turmoil of 1998” he added.
O’Sullivan noted that a determined dictator might push the situation further, but the strain will ultimately become unsustainable. He invoked the “Hemingway moment” citing the writer’s observation that bankruptcy typically comes “first very slowly and then very quickly”. He believes Russia will experience a similar pattern, though he cannot say exactly when this critical tipping point will arrive.
