Monthly Report No. 12/2025

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Vasily Astrov, Vladislav L. Inozemtsev, Birgit Niessner and Roman Römisch

wiiw Monthly Report No. 12, December 2025
53 pages including 30 Figures

Current issues accessible exclusively for Members. Free access after an embargo period of six months.

  • Chart of the Month: Russia’s military spending is not as high as you might think
    by Vasily Astrov
     
  • The war as the new Russian business model
    by Vladislav Inozemtsev
    The largely mercenary army deployed in the war against Ukraine represents a radical break with 300 years of Russian history, when soldiers were very cheap. For the time being, this strategy has allowed the ruling regime not only to avoid a deeply unpopular mass mobilisation, but also to utilise a labour force that would have been of little value to the rest of the economy. However, the longer-term economic and social costs associated with this strategy are likely to be profoundly negative.
     
  • Opinion Corner: A geoeconomic mistake by the EU in Kosovo
    by Birgit Niessner
    The EU’s measures taken against Kosovo, which were triggered by disputed municipal elections in 2023, have suspended key agreements and frozen EUR 600m in development funds, leaving the country isolated. These measures are widely seen as unjust and counterproductive, especially given Kosovo’s progress toward European standards and integration. The EU’s stance runs counter to its stated goal of deeper engagement with the Western Balkans, undermines its credibility and opens the way to rival powers like Russia and China.
     
  • Economic growth and income convergence in the EU
    by Roman Römisch
    Why have the EU member states of Central and Eastern Europe caught up so rapidly with Western Europe, and what does this progress truly imply for living standards? This article looks beyond headline GDP figures to explain how economic growth, demographic change and rising price levels have together shaped income convergence in the region over the past two and a half decades.

 

Reference to wiiw databases: wiiw Monthly Database, wiiw FDI Database

Keywords: war in Ukraine, defence spending, mercenary army, social mobility, EU measures, EU integration, economic growth, income convergence, demographic trends, purchasing power standards

Countries covered: EU, EU-CEE, Kosovo, Russia

Research Areas: Macroeconomic Analysis and Policy, Sectoral studies

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