Top Russian banker is fired after warning Putin was leading country into 'social crisis' amid 'war of attrition' with Ukraine

By PERKIN AMALARAJ, FOREIGN NEWS REPORTER and WILL STEWART Published: 15:50, 17 August 2026 | Updated: 15:59, 17 August 2026 The Kremlin has fired a top Russian banker for warning Vladimir Putin he was leading the country into 'social crisis' and a failure to gain victory in the Ukrainian conflict. Andrei Klepach, a longtime Moscow insider, insisted Russia 'will not win' its 'war of attrition' with Ukraine. He forecast Putin was leading Russia into the same turmoil that triggered revolutions in 1917 and 1992. Klepach was dismissed as chief economist at Kremlin-controlled development giant VEB.RF, formerly known as Vnesheconombank, which finances major Putin projects and plays a central role in supporting Russia's war-ravaged economy. The boss of VEB.RF, Igor Shuvalov, fired Klepach after 'a call from above', local media reported. A leak of the top economist's explosive comments in a speech led to his firing, which came as a senior member of Russia's liberal Yabloko party was sentenced on Monday to 11 years and one month in a penal colony for condemning the war in Ukraine.  He challenged Putin's belief that Ukraine will eventually collapse in a speech, which is published on the website of the Nikitsky Club - a forum of economists, academics and government officials.  It marked a rare public critique by a senior figure at a state institution of the costs of continuing the war that Moscow launched in 2022. 'We have this illusion that everything there will collapse. It has not collapsed and will not collapse,' he said, pointing to huge Western support. Andrei Klepach, a longtime Moscow insider, was dismissed from his top role following a 'call from above' 'We are losing both technological and economic competition globally.' He warned: 'We are losing it not only to China and the US. In some respects, we are losing it to Ukraine.' 'The conflict in Ukraine with the participation of NATO has already lasted longer than [Soviet involvement in the Second World War], and so far its end is not in sight,' said Klepach. 'Both sides are increasing the intensity of strikes, including on each other's economies.' Putin could make the same mistake as last Tsar Nicholas II and the Soviet gerontocracy which both steered the country in the wrong direction, he said. He compared the danger with the February Revolution of 1917, which toppled the Romanov dynasty, and the crumb ling of the USSR in 1991. 'No one expected the February Revolution [1917] either,' he said, recalling that Soviet founder Vladimir Lenin had doubted he would live to witness a revolution only weeks before it began. 'The situation in the Soviet Union in 1991 — we had been heading towards it slowly and consistently, and everyone understood that we were heading towards a crisis, but there was no fatal inevitability that the Soviet Union would collapse,' he said. The site of a recent Russian fiber-optic FPV drone strike that left two cars in flames in Sloviansk in the Donetsk area, Ukraine, 17 August 2026 Ukrainian rescuers work at the site of a Russian strike in Kyiv on August 16, 2026 'I believe Russia will not fall apart,' he concluded, 'but I am almost certain that we will face a social crisis.' Veteran insider Klepach held key posts in the Russian government and the central bank as well as at arms-maker Almaz-Antey, the Tactical Missiles Corporation and state nuclear energy corporation Rosatom.  In the speech in May, Klepach highlighted Russia's resilience to Western sanctions but said pressures were mounting due to Ukrainian strikes on energy and logistics infrastructure.  He pointed to rising income inequality and a slower GDP growth rate than in the U.S. and Ukraine. In July, the Russian central bank suggested the economy might not grow at all this year.  Over the summer, repeated Ukrainian attacks on Russian oil refineries and warehouses of top online retailer Wildberries have created supply shocks, raising inflation risks and public unease. President Vladimir Putin has said the economy is stable despite what he called external attempts to undermine it. 'Economically we will not collapse, but our lag will continue to grow, with all the resulting consequences,' Klepach said in his speech, predicting a social crisis could arise 'precisely when nobody is particularly expecting it.' Ukrainian rescuers work at the site of a recent Russian fiber-optic FPV drone strike that left two cars in flames in Sloviansk in the Donetsk area, Ukraine, 17 August 2026 Ukrainian rescuers use a water hose as they work to extinguish a fire at the site of a Russian strike in Kyiv on August 16, 2026 There is currently no sign of serious social unrest in Russia, amid tight wartime censorship, protest bans, long jail sentences for dissidents and the growth in influence of the Federal Security Service, the main successor agency to the Soviet-era KGB. Klepach also criticised what he called Russia's over-dependence on China and said uncoordinated monetary, budgetary, and industrial policy had contributed to this year's economic slowdown. 'The quality of governance is almost constantly deteriorating,' he said. 'Decisions are being made all the time that have an extremely low level of justification but long-term strategic consequences.' Klepach's sacking comes after Lev Shlosberg, the party's deputy chairman, was accused of discrediting Russia's armed forces and spreading false information about them. In a closing speech to the court in the city of Pskov last Friday, he maintained his innocence, said he was the victim of a political trial and repeated his call for an immediate ceasefire in the 4-1/2-year war.  The verdict, published by the court, follows an August 10 decision by Russia's Supreme Court to exclude Yabloko from taking part in a parliamentary election next month.  The Supreme Court on Monday rejected an appeal against that ban. Yabloko, the only registered political party to call for an end to the war, has come under heavy pressure from the authorities in the run-up to the election, where any sizeable anti-war vote could have embarrassed the Kremlin.  Shlosberg used his closing speech to deliver a searing indictment of the war. 'The lives of countless thousands of people have been cut short during this time. Sooner or later, the precise and complete death toll - with names included - will be made public, and the entire nation will shudder at this list of martyrs,' he said, according to a transcript by independent news outlet Mediazona. 'Today, cemeteries in our country, including military ones, are growing far more rapidly than maternity wards, kindergartens, and schools,' he said. Black smoke is seen rising from a distribution warehouse near Moscow, Russia after Ukraine's drone attack on August 16, 2026 Firefighters try to put out a fire at a city book market following a Russian missile attack in Kyiv, Ukraine early Sunday, August 16, 2026 Mediazona and the BBC Russian service have recorded the names of at least 239,354 Russian military dead, based on publicly available records. Based on records of the estates of dead people, which they used to calculate excess mortality among Russian men, they estimate the true toll at more than 350,000. Neither Russia nor Ukraine publishes up-to-date casualty figures. Moscow says it is fighting to address security threats from NATO and Ukraine, and to defend the rights of Russian-speakers living in Ukraine. Kyiv and its Western allies reject these as a false premise for launching the deadliest conflict in Europe since World War Two.