Sanctions Archives – ITSS Verona

May 18, 2026 — No Comments

Putin Hints at Ending Ukraine War, Can Russia’s Economy cope?

By Sorin Dojan - Russia Team

Russian President Vladimir Putin said on Saturday (9 May) that he thought the war with Ukraine is “coming to an end”, more than four years after the start of Russia’s large-scale military campaign in Ukraine, which significantly altered European security dynamics and regional trade patterns. Three days later, Deputy Prime Minister Alexander Novak said the government now forecasts GDP growth of 0.4% in 2026, significantly down from the 1.3% previously expected.

For many looking at the latest string of data coming from the Kremlin, ending a four-year war that has driven consumer prices higher in the process sounds like the first hurdle in a series of challenges to overcome. These range from stubbornly persistent inflation and high interest rates to a militarised economy losing momentum and a shrinking GDP growth. Russia's economy entered recession in 2022, and the recovery that followed was uneven, marked by persistent declines in retail sales, sluggish income growth in some parts of the country, and regional budget constraints^[1].

Amid the economic disruptions caused by sanctions, certain industries emerged to keep the economy afloat. But the winners that underpinned Russia’s economy during the war could suffer disproportionately from any future economic redress. The challenge for the regime will then be to find alternative paths to growth in a heavily sanctioned economy with limited export strings and partners.

What to do with the military industrial complex?

Following Russia’s invasion of Ukraine, the world witnessed a highly coordinated sanctions response, with the West collectively imposing almost 24,000 punitive measures against individuals, entities, vessels, and aircraft as of August 2025, according to Castellum.AI, an AI-powered agency specialising in Anti-Money Laundering (AML).

The Russian economic revival that emerged later was highly volatile and disproportionate, with weapons-producing regions among the war’s economic winners, as evidenced by regional tax collection data. On the other hand, the regions mostly pressured were the ones bordering Ukraine, those specialising in ferrous metal production and places with industries heavily sanctioned by the West^[2].

The Russian military-industrial complex operates differently from its American counterpart. Whereas the US defence industry relies heavily on private investment, Russian companies in this industry largely depend on state subsidies, making the government a major contributor to the military-industrial complex^[3].

There is no doubt that Russia has overinvested in its military to boost production and growth, but above all to replace the hardware damaged in the war. In 2025, the defence sector absorbed 15.9 trillion roubles in 2025, or around 7.2% of the country’s revised GDP forecast for that year. For comparison, its close ally, China, spent around 1.7% of its GDP on the military, according to World Bank data, yet Beijing is not involved in a costly war forcing the state to implement extensive stabilisation measures.

The question that then emerges is what happens to such government spending once the war comes to an end?

One would be tempted to assume a return to the pre-2022 status quo, but that would depend on the West lifting sanctions and allowing Russia’s once-productive industries (particularly Europe-destined commodities) to resume humming at full speed.

There is no guarantee of success. As recently as last week, European diplomats and officials cited by POLITICO said the bloc was getting ready to impose a fresh wave of sanctions, this time targeting Moscow’s shadow fleet of ageing tankers. The EU is also eyeing the opportunity to impose sanctions that were previously opposed by ex-Hungarian Prime Minister Viktor Orban, including punitive measures against Patriarch Kirill and other members of the Russian Orthodox Church. French politician and Minister Delegate for Europe Benjamin Haddad said in April that it was not the time to lift sanctions on the Kremlin but rather “step up […] pressure”, namely on the Russian energy sector.

For now, it is expected that Russia will maintain the same level of military investment to replenish military stockpiles and replace personnel lost on the battlefield^[4]. Yet for how long that can be justified is subject to debate. As one Carnegie analyst put it: “Any attempt to rapidly cut spending will result in collapse. But nor can the military machine be fed indefinitely.”

NVO, CC BY-SA 3.0 , via Wikimedia Commons

Defence investment is not necessarily conducive to a thriving economy. According to a RUSI study, defence expenditure plays little role in promoting economic growth; a European Commission report separately stated that “it is impossible to determine if this tendency [to spend more on defence] is favourable or negative to growth.”

It is not hard to imagine why. The military-industrial complex is part of a command economy, largely detached from market forces that drive flexibility and a more efficient resource reallocation. At the macro level, such inflated expenditure is only justified in times of war^[5].

In Russia’s case, being left with an overinflated military-industrial complex that serves as one of the few engines of growth is dangerous to its future economic recovery. Disinvest too soon and you might risk upsetting an overexpanded industrial workforce. But choosing to continue allocating resources toward military procurement rather than civilian economic activity is equally unproductive.

Either way, Putin’s speech in early May signals more than just a willingness to pull out from a war that has cost the Kremlin thousands of lives. Instead, his remarks come against the backdrop of a Russian economy showing signs of “stagflation”. The central bank interest rate stands at 14.5% as of April 2026, significantly higher than the rates in Western economies. Core inflation hovered at 6.3% in Q1 2026, up from 5% registered in the previous quarter.

If Novak’s statement serves any good in this context, it might be that it could force the Kremlin to give peace a genuine chance after four years of sustained military operations with significant economic and human consequences. At what cost could peace come for the national economy? It remains to be seen.

^[1] Yuriy Gorodnichenko, Iikka Korhonen, and Elina Ribakova, War-Induced Economic Convergence in Russian Regions (Peterson Institute for International Economics, 2025).

^[2] Andrey Yushkov and Michael Alexeev. “Russian Regions in Wartime: Fiscal and Economic Effects of the Russo-Ukrainian War,” Post-Soviet Affairs 40, no. 4 (2024): 313–325. https://doi.org/10.1080/1060586X.2024.2355047.

^[3] Gorodnichenko, Korhonen and Ribakova, War-Induced Economic Convergence, 6.

^[4] Maria Snegovaya, Nicholas Fenton, Tina Dolbaia, and Max Bergmann, The Russian Wartime Economy: From Sugar High to Hangover(Center for Strategic and International Studies, 2025).

^[5] Dmitry Gorenburg, Samuel Bendett, Ken Gause, Pavel Luzin, Gabriela Iveliz Rosa-Hernandez, Paul Schwartz, and Elizabeth Wishnick, Crafting the Russian War Economy: The Effects of Export Controls on Russia’s Defense Industrial Production (CNA Corporation, 2024).

May 23, 2022 — No Comments

Dr. Ali Fathollah-Nejad on Iran’s Nuclear Policy and the JCPOA

In this interview conducted by the "Iran Desk" at ITSS Verona Dr. Ali Fathollah-Nejad addresses and analyzes Iran's nuclear policy and the revival of the JCPOA. The interview focuses on the possible outcomes of Iran's nuclear policy, the effect of Iran's nuclear policy in the region, and the international response and reaction from the international community.

Dr. Ali Fathollah-Nejad is a German–Iranian political scientist focusing on Iran, the Middle East, and the post-unipolar world order. He is an associate fellow with the American University of Beirut’s Issam Fares Institute for Public Policy and International Affairs (AUB-IFI) and author of the much-acclaimed book Iran in an Emerging New World Order: From Ahmadinejad to Rouhani (2021). Ali holds a Ph.D. in International Relations from SOAS.

Interviewers: Shahin Modarres, Yasmina Dionisi and Filippo Cimento.

May 16, 2022 — No Comments

Manochehr Dorraj on the development of bilateral relations between Iran and China

In this interview conducted by the "Iran Desk" at ITSS Verona Prof. Manochehr Dorraj addresses and analyzes the gradual development of bilateral relations between Iran and China. The interview focuses on the importance of Iran to China, how both countries try to optimize their gain and influence through this bilateral relation, and how this relation is affected by and may affect regional bilateral relations with China.

Manochehr Dorraj is a Professor at Texas Christian University where his areas of focus cover International Affairs, Comparative politics, Political Theory and Middle East politics. He received his Ph.D. from the University of Texas at Austin. He is the author, coauthor, editor or coeditor of 7 books and more than 80 refereed articles and book chapters.

Interviewers: Shahin Modarres, Yasmina Dionisi and Filippo Cimento.

April 18, 2022 — No Comments

Iran’s Nuclear Policy: Roots and Reasons

By: Shahin Modarres, Yasmina Dionisi, Filippo Cimento.

How often do we consider nations with glorious histories tend to live under the constructed shadow of their past and continue a collective sense that is tangible yet sophisticatedly laying behind layers of time? Is it correct to assume the roots of Iran's nuclear program are somehow attached to reviving its past? What are the main differences between pre and post-1979 Iran and its nuclear development policies?

The issue appeared in the public debate a few years after Mohammed Reza Shah Pahlavi came to power in 1944. The latter, who studied in Switzerland, developed a western attitude enriched by power aspirations and ideals of modernization. In this project, the nuclear program has always been present. For Shah, modernization necessarily passed through the implementation of a nuclear program. First, Shah intended to give his country a real energy alternative, not forgetting that nuclear weapons could give a strong international legitimacy: a powerful state, a state capable of defending itself, is a compelling state and a state which is able to develop its regional influence. Moreover, the program could give birth to a process of technological and scientific progress, increasing the power of the country through investments in new researchers. With the 1979 revolution and the change in the alliance system, Iran remained isolated and the nuclear program was suspended.

*Image Source*: https://www.nytimes.com/1974/06/28/archives/france-and-iran-sign-4billion-accord-shah-will-receive-5-nuclear.html

The decision of resuming the nuclear program has been guided by the will to conserve independence from other powers, intensify the distances from the United States, and start the first net of relations with its neighbours from a strong position of power. The government started gradually to intercept the feeling of the elite and of the public that the nuclear strategy crystallized the regional position. In other words, nuclear power could give to Iran not only a decisive international bargaining leverage but mostly a stabilizing tool in domestic politics. In some way, the perception that the Iranian people could have of the government and of its action could have been influenced by the ideal of a political elite capable of taking strong decisions. The Iranians would see the development of a nuclear program as an ambitious project enabling the country to develop a strategic aim and enhance its regional influence. From this element, some scholars have claimed that a new uniting consensus aroused around the nuclear pact, allowing the executive power to gain a wider leeway. Scholars have argued that the main reason that pushed Iran toward a nuclear program was deterrence. In this reconstruction, a primary role is played by the War against Iraq, which must be analyzed in a wider context. The war broke out after 1979 when Iran was isolated, and Iraq exploited the opportunity to improve its relations with the US. Such an attack, which engaged Iran all of a sudden, found it unprepared and taught to Iran the importance of appearing strong and resistant.

However, it could be claimed that deterrence is a dangerous strategy and that Iran in this way could face enormous risks in challenging the international community in such an open approach. Nonetheless, among the political elite, a decisive idea has spread and motivated the choices of Iran: if Iran goes beyond the imposed threshold, the international community will accept it. This has been a compelling argument that animated the internal debate about the nuclear program. In the international non-proliferation agenda, Iran’s nuclear program has been placed as a priority security issue: the consequences of a nuclear Iran, in the fragile region of the Middle East, could trigger threatening outcomes. To counter such a threat and identify the main efforts to be undertaken to address it, studies have focused on understanding the causes behind Iran’s nuclear aspirations. Realism has been the predominant international relations theory for this purpose. Yet, an opposite analysis has placed constructivist interpretations at the center of the debate.

In constructivist views, the revolutionary values associated with the regime are linked to the development of the nuclear programme. As such, normative factors have been proposed as the elements behind the Islamic Republic of Iran’s foreign policy. Mahdi Mohammad Nia has argued that, since 1979 brought the clerical regime under Ayatollah Khomeini to power: The Iranian nation has been dominated by a revolutionary ethos and this has been translated into its foreign and security policy. Consequently, Iran's nuclear aspirations should be looked at through the lens of this discourse.

This discourse involves the aim of the Islamic Revolution. Through such, the regime has been seeking to reaffirm its independent, anti-western, anti-hegemonic, and anti-colonial nature. The nuclear weapon would therefore fulfill these values. It is in this same argument that Homeria Moshirzadeh shows how the main discourses of justice, independence, and resistance are profoundly ingrained in the constitution of the identity of the Islamic Revolution and that therefore gaining nuclear weapons. Constructivists aside, realism continues to dominate the analysis of nuclear Iran. In fact, the security dilemma is still sought as an important motivator. According to Shaheen Akhtar and Zulfiqar Khan, the regime’s perceived threat from the not-so-distant Israeli nuclear weapons would continue to act as an urgent security threat and that within an anarchical order, where Iran itself acknowledges its vulnera

Overall, the role of domestic politics, thus in conjunction with both theories, remains prevalent in scholarly analysis. Shahram Chubin and Robert S. Litwak for instance have argued that the question of nuclear development in Iran is rooted in domestic politics and that efforts to address the regime’s aspirations must look at the nuclear debate within the Iranian public. It is essential to conclude that in the current frame of international relations particularly the Middle Eastern dynamics of power development of a nuclear program is not justified yet understandable. By comparing the cooperation once held before 1979 between Iran and the international community and the bitter hostility that gradually developed after the revolution it is important to focus on the role of the agent, not the context.

March 21, 2022 — No Comments

Russia-Ukraine War Fact Sheet

By: Sofia Staderini

The Russian tactic is that of a pincer encirclement of entire Ukraine – from Russian territory and occupied Crimea, Donbas, and Belarus - and inside they follow the same tactic as Kyiv's focus, methodically destroying civilian infrastructure and nuclear power plants. The attempt is to demoralize and coerce Ukrainians. Yet morale is rising and these same civilians are becoming soldiers. Such support somewhat offsets the quantitative advantage of the Russian army in manpower and equipment. Now, Russian troops make advances into Ukrainian territory only at the cost of hundreds of soldiers every day, failing for now to take control of any regional center.

Their qualitative advantage is very reduced, as can be inferred from the high level of losses, which seems to be well above 5%, in men and materials. Russia could take control of the territory, but only with long times and high destruction. Reservist and conscript call-ups, as well as the ongoing shipment of Syrian and Chechen militants to Russia and Belarus, will not be able to affect the balance of troops around Kyiv in the coming week, slowing down the Russian tactic as it is momentarily unable to conduct simultaneous attacks.

*Image Source*: https://it.depositphotos.com/folder/La%20verità%20sulla%20guerra%20della%20Russia%20in%20Ucraina-299150880.html?offset=200&qview=551211048&utm_source=newsletter&utm_medium=email&utm_campaign=ntf_ruby_war&utm_term=100_images

Russia is now deploying maneuverable Kinzhal hypersonic missiles, reported by Russian state news agencies as a “next-generation weapon”. While it is very unlikely that the deployment of Kh-47M2 missiles will have a major impact on the current stall of the invasion, It could likely point out a shortage of other weapons and a propagandistic effort to distort Russia’s military failure.

However, after an end of decades of deterrence orthodoxy, the danger of a possible escalation involving nuclear weapons is real. Indeed, Putin has used nuclear threats to create a wide perimeter in which he may pursue a conventional war in Europe. NATO countries are doing everything to avoid escalations, complying with a policy of non-intervention for avoiding direct contact with the Russian military.

While not directing intervening in Ukraine, NATO countries are deploying significant military aid to the country while drastically raising defense spending, reclaiming the alliance's historical role as a protective haven against Moscow's military activities. Germany in particular is now increasing its defense spending to more than 2% of its economic output: a historic departure from its postwar commitment not to transfer armaments to combat zones. Moreover, the European Union's recent investments (€500 million) in arms and other aid to the Ukrainian military mark a “watershed moment” in its history.

*Image Source*: https://www.ndtv.com/world-news/russia-now-global-economic-pariah-ruble-worth-less-than-one-penny-us-2811892

However, many countries are starting to be bitten by the economic effects of the war, especially those with currencies linked to the rubble. More sanctions implications are quite likely to emerge in the coming weeks, particularly in a case like the EU-Russia energy partnership, where dependency is significant. Indeed, the Russian invasion of Ukraine is now serving as a geopolitical catalyst on key strategic, economic, and societal issues and will certainly bring to consider re-alignments, particularly in Post-Soviet countries and the Middle East. NATO's deterrent posture must be strengthened as well as cooperation and dialogue with the various regional actors in order to figure out the next evolutions in the geopolitical chessboards.

January 28, 2022 — No Comments

Zeno Poggi on The Sanctions Regime against Iran

Dr. Zeno Poggi, co-founder, President and CEO of ZPC S.r.l., Vice President of ACCUDIRE S.r.l. and President of AWOS- A World of Sanctions, tackles a complex issue: The Sanctions Regime against Iran.

Interviewer: Anna Lorenzini