In the balmy Moscow summer, Russians danced through Sunday night to celebrate their national football team’s improbable passage to the World Cup quarter finals, after a penalty shootout against Spain. The Russian authorities more broadly are basking in a championship that has been high-quality, good-natured, and given Russians a chance to mingle with foreigners that many have never had before.
President Vladimir Putin has proved he can put on circuses for his people. Keeping the bread coming is proving trickier. Away from the World Cup host cities — where protests are banned — demonstrators rallied in 45 towns on Sunday against a rise in the pension age. In an attempt to “bury” the news, the measures were announced on the World Cup opening day. Retirement ages will rise for men from 60 to 65 by 2028, and for women from 55 to 63 by 2034. Value added tax is being raised from 18 per cent to 20 per cent.
The pension age increase was arguably long overdue, reducing the need for budgetary transfers amounting to 2 per cent of gross domestic product a year to cover pension shortfalls. Together with the VAT increase and oil industry tax reforms, the moves are meant to help fund a Rbs8tn ($126bn) spending programme on healthcare, education and housing Mr Putin announced in May.