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
Swedish invasion of Russia the Battle of Poltava, and shortly thereafter lost more possessions. George I of Great Britain led Great Britain and Prussia into war against Sweden, and Denmark reentered the war. Russia maintained its conquered possessions in Ingria and the Baltic, was able to consolidate its hold over Ukraine and Poland, develop the new city of Saint Petersburg, and gain vital trade links in the Baltic trade. Peter the Great also gained further prestige in Europe, and won Louis XIV as an ally. Swedish invasion of Russia The invasion of Russia by Charles XII of Sweden was a campaign undertaken during the