**Russian Soldiers’ Debt Cancellations to Hit Banks Hard**
The UK Ministry of Defense shared a warning on social media. They said that debt cancellations for Russian soldiers might put extra pressure on Russian banks next year.
Russia is trying to stop a new wave of mobilization, which could damage public support for the war and lead to more people leaving the country. To avoid this, Russia passed a law in late November. This law lets soldiers who joined after December 1st, 2024 cancel their debts up to $94,400.
The measure adds to an existing program that helps Russian military personnel pay back loans. Since October 2022, over 411,000 applications have been filed for mortgage and personal loan repayment.
Experts think Russia is using financial incentives to make up for the costs of the war. So far, there have been over 760,000 casualties in Ukraine, with an average of 1,532 per day in November.
The UK predicts that debt cancellations will weaken Russian banks by 2025. This will happen because of high interest rates and sanctions. It’s likely to make the banking sector less able to handle economic shocks.
In related news, the EU plans to impose new sanctions on Russia next year. These sanctions will target specific sectors of the economy that have not been covered or have been covered poorly so far.