History of Russia deficit required borrowing, primarily from Amsterdam; five percent of the budget was allocated to debt payments. Paper money was issued to pay for expensive wars, thus causing inflation. For its spending, Russia obtained a large and glorious army, a very large and complex bureaucracy, and a splendid court that rivaled Paris and London. However, the government was living far beyond its means, and 18th-century Russia remained "a poor, backward, overwhelmingly agricultural, and illiterate country." Peter I was succeeded by his second wife, Catherine I (1725–1727), who was merely a figurehead for a powerful group of high officials, then by his
Catherine the Great could see the benefits of Britain's friendship, she was wary of Britain's increased power following its victory in the Seven Years' War, which threatened the European balance of power. Peter the Great had succeeded in gaining a toehold in the south, on the edge of the Black Sea, in the Azov campaigns. Catherine completed the conquest of the south, making Russia the dominant power in south-eastern Europe after the Russo-Turkish War of 1768–74. Russia inflicted some of the heaviest defeats ever suffered by the Ottoman Empire, including the Battle of Chesma (5–7 July 1770) and the Battle of Kagul (21