The Russian stock market fell Tuesday on signs that President Putin might escalate his war on Ukraine.
New legislation in Russia's parliament would increase punishments for military crimes such as desertion, damage to military property, and insubordination, raising fears of a full deployment later.
The military draft gave up huge swaths of territory in eastern Ukraine, so some hard-line lawmakers want to expand it.
Moscow moved to hold sham referendums to annex occupied territory. While annexation wouldn't be recognized as legal, it raises the possibility that any attacks on Russian forces there could be used as an excuse to escalate the war.
The ruble-denominated MOEX stock index plummeted 8.7% to hit the lowest point in over a year.
Russia's potential move to annex occupied Ukrainian territory is a sign of a stark escalation of the conflict with Kyiv, which is bad news for hopes of an end to the war sooner than previously thought.
The war effort seems to be slipping away as Putin seems to be doubling down on the invasion.
Russia's defense industry should increase its production of weapons, he said. The finance ministry is considering raising taxes on energy exports, as the Kremlin looks to shore up its budget and war chest.
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