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http://en.rian.ru/business/20120305/171752212.html

“Rapid growth in spending has already widened Russia's non-oil and gas fiscal deficit to 10 percent of GDP, and pushed up the fiscal breakeven oil price to around $117/barrel for 2012. We have previously said that a failure to make progress in reducing the non-oil and gas fiscal deficit back down towards its pre-crisis target of 4.7 percent is one of the factors constraining Russia's rating at BBB,” the statement said.

Mickey Mouse credit rating agencies at it again. Note that in the above statement they are talking about some contrived "non-oil and gas" deficit, when the actual deficit is much smaller. Yeah, a country with a sovereign foreign debt of $36 billion (http://en.rian.ru/business/20120301/171671096.html) or 2% of GDP is a real risk. According to these clowns Russia has the same level of risk as Ireland (also BBB) and its imploded housing bubble. The sovereign debt of Ireland is about $142 billion (http://www.economicshelp.org/blog/3118/ ... onal-debt/) or 105% of GDP.

Fitch did not downgrade the US credit rating when the real deficit (not some BS number) exceeded 10% of GDP. Also, Fitch expects oil and gas prices to collapse apparently. Does Fitch expect a global depression that will outclass the 1930s? Not bloody likely.

Absolutely. Kind of ridiculous.
Medve-Putin lately envisaged a significant increase in military spending for the next decade or so, following the recent technical problems in the space/military sector like the collapse of the Phobos mission to Mars. They talk of some trillions roubles, rouble to dollar currently hovering around 30. Reasonable thing to do in light of the increased security risks because of Lybia, Syria, Springs, winters etc.

Now Putin gets elected, the spending will likely go on, and the next day they threaten with the ratings downgrades. Russia has hundreds of billions dollars in foreign reserves and funds - treasuries etc.- and, as said above, almost nil foreign borrowing. How a drop in oil prices may impair Russia's ability to repay the debts in these circumstances? Only if the US defaults on treasuries, perhaps.

One may wonder why bother at all with borrowing internationally at a high interest rate and at the same time place proceeds from export oil sales in foreign treasuries at almost zero rate. This is like taking a mortgage at 10%, and instead of repaying it, placing all your earnings to a bank deposit at 1% rate. Obviously, a conservative and financially sound policy, according to the agencies. It helps the noble cause of financing the US budget deficit. If you spend internally or on your military - your will get the righteous fury of the agencies and the downgrade.

"may cut if" = "threat to make them do something"