Having completed their annexation of the Crimean Peninsula, Russia’s Finance Ministry has unveiled a myriad of aid packages for the new provincial government and the struggling Crimean economy in general.
Starting with $300 million in cash for the Crimean government and some small business aid for the port city of Sevastopol, Russia says they expect to spend around $6.82 billion on Crimea this year alone.
Crimea has a budget deficit of over $1 billion annually, and that deficit is only going to grow as the pay rates of government employees there come into line with the rest of the Russian Federation.
Russia doesn’t have limitless funds, of course, but they will see considerable savings from their cuts with the Ukrainian government, ending natural gas subsidies and other concessions related to hosting the Black Sea Fleet. Since the annexation of Crimea, Ukraine no longer hosts the fleet, so Russia says all such hosting deals are void.
Very smart move, since the parts of the country that stayed in the Ukraine are about to get his with harsh austerity measures. So, people in the Ukraine are about to see pay cuts, pension cuts, and subsidy cuts leading to huge price increases, while they'll see the civil servants in the Crimea all getting pay raises to bring their pay into line with the Russian standards.
Nothing gets a populations attention like seeing their neighbors prospering while they wait in line for bread and eggs. The "new" Ukrainian government (currently in meltdown mode) is going to have their hands full when the people they supposedly represent come back to the Maidan to throw THEM out.
"Russia doesn't have limitless funds". Indeed not! The naval base agreement becomes void in accordance with the "rebus sic stantibus" principle in public international law. The same principle annulled the US promise not to extend NATO eastwards when the Soviet Union ceased to exist. Yet another ripple effect of Nuland's monumental screw-up!