The diplomatic effort seems to have failed. After months of tensions around Ukraine, Russian President Vladimir Putin on Monday, February 21, To recognize the two separatist territories that make up part of the Donbass region – “People’s Republic of Luhansk” and “People’s Republic of Donetsk” – and announced the sending of its army in support.
For Westerners, it is time to phase out sanctions against Moscow. What form will this retaliation take? What effects can they have on Russia? Can these measures, by the ricochet effect, punish the Europeans?
Why use the weapon of sanctions?
Ukraine is not a part of North Atlantic Treaty Organization (NATO), A political-military alliance whose members promise to protect each other during an attack. Therefore the direct intervention of the Atlantic Alliance in the territory of Ukraine is not an option. Of course, many countries supply military equipment to Kiev, but no one sends troops to fight on its soil. Sanctions are another measure of pressure on Russian President Vladimir Putin.
What are the sanctions announced against Russia?
EU member states immediately condemned the Kremlin’s decision. They translated their anger into action without delay, announcing the first series of sanctions effective Wednesday.
These retaliations aside, Russian political leaders are being targeted – for now Visa restrictions on the EU, where their assets will be frozen – on the other hand, banks involved in financing pro-Russian separatists – will no longer be able to issue or trade bonds in European markets. The EU supports a step-by-step approach and has other measures to deal with the possible escalation of the conflict.
Germany suffered a very symbolic blow : President Olaf Scholes announced Tuesday Pause Nord Stream 2 authentication. Completed in November 2021, the gas pipeline will carry Russian gas to Germany via the Baltic Sea, which is not yet in service.
Following Berlin, US President Joe Biden made the announcement on Wednesday Restrictions against the company responsible for operating the Nort Stream 2 gas pipelineConnecting Russia with Germany. “Today I ordered my management to impose sanctions against Nortstream 2AG and its leadersHe said in a statement. These actions are part of our first round of sanctions in response to Russia’s actions in Ukraine. ⁇
For his part, Mr. The UK on Tuesday decided to freeze the assets of three billionaires believed to be close to Putin and ban them from the territory. British sanctions target five Russian banks, including Rosia and Bromswiysbank, which are very active in financing the defense industry. “If there is an invasion we will do more”British Prime Minister Boris Johnson warned.
In agreement with their European allies, The United States has decided to suspend Western funding from Russia. Certainly, Moscow can no longer raise funds in the US or Europe and trade its new debt problems in the US or European financial markets.
Two Russian public sector banks are targeted – Vnesheconombank and Promsvyazbank – which represent assets of 70 billion euros (far less than the major banks in the sector). Washington is attacking five relatives of the Russian president who see their assets in the United States frozen.
Here again, some activities are in stock. At present, there is no question about banning the export of equipment with US parts to Russia. Disconnect Moscow from the Swift Financial Information SystemThis will have dire consequences for Western companies.
Has Russia ever encountered such sanctions?
After Crimea was annexed by Russia in 2014, the European Union and the United States agreed Continuing sanctions. This resulted Mass capital flightDecline in investments and a sharp fall in the ruble.
However, the cost of these retaliatory measures “Russia was not strong enough to support the withdrawal, but the Europeans found it unacceptable.”, Explain The world Sven Biscop is Professor of Strategy at the University of Kent and Director of the “Europe in the World” program at the Ekmond Think Tank in Brussels.
In fact, these sanctions did not prevent the Kremlin from taking action Massive cyber attacks, To kill Or Attempt to assassinate Political enemies, and threatening the Donbass with invasion. Their impact on Russian development is minimal : – 0.2% of Gross Domestic Product (GDP) per annum between 2014 and 2018, according to the International Monetary Fund. Massive gas projects in the Arctic by the Russian group Novotech and the French Total were funded without the help of the dollar. Recent Report of the US Congress Russia’s oil exports to the United States have increased despite restrictions on certain technologies imposed by Washington.
Will the new restrictions be more effective?
The first sanctions determined by the West must have limited consequences. However he acknowledged that their numbers were not enough to defeat Vladimir Putin’s. Banks targeted by the European Union and the United States are relatively small, and most of the Russian capital outside the country has already been repatriated as a preventive measure. Advertisements targeting certain oligarchy will have little impact on the Russian economy.
On the other hand, the increased difficulties for the Russian government to access Western capital markets to refinance its debt may weigh on the value of the ruble and extend the purchasing power of Russian consumers of imported goods.
Benoit Witkin, Reporter The world In Moscow, subtlety : “The Russians are poor, but the state treasury is full. Russia can boast of amassing nearly $ 640 billion (6 566 billion) in foreign exchange reserves (savings that allow a country to continue importing despite variations in international trade). It has a sovereign fund of $ 183 billion (2 162 billion), which is a large wool stock that will allow mitigation of the shock of sanctions.
“Forgive me for revealing, but we will not worry about all their obstacles”Russian Ambassador to Sweden Viktor Tatarintsev bluntly warned in an interview with a Swedish newspaper. Aftonbladet February 12.
It should be noted here that the sanctions announced on Tuesday are part of a graduation strategy: if Russia expands, the West has the opportunity to take further action. The first “set” of sanctions with limited scope also offers an opportunity for diplomacy. “This is the beginning of an invasion and this is the beginning of our response.”, Thus briefly A senior U.S. government official.
What are the consequences for Europeans?
Can the revenge decided against the Kremlin turn against the Europeans? This is possible if Russia decides on sanctions, especially in the energy sector. Europe imports 40% of its gas demand from Russia., With strong diversity between twenty-seven. Slovakia and Austria come exclusively from Russia. In contrast, Spain does not buy anything from Moscow. In Hungary and Finland, 80% of the supply is Russian; This percentage drops to 50% in Germany and more than 20% in France.
So the Kremlin has real power over its neighbors. Members of gas-exporting countries, including Qatar in particular, warned on Tuesday that they have little potential to rapidly increase supplies to Europe. In recent months, tensions between Brussels and Moscow over Ukraine have already contributed Gas prices are rising in the European market.
In the agricultural market, Russia is the world’s largest wheat exporter and, along with Ukraine, represents a quarter of the world’s exports of this essential grain. It is also one of the largest producers of nickel and aluminum in the world.
Within the EU, Germany has strong trade relations with Moscow, but only 2% of its exports go to Russia.
In Paris, the Ministry of Finance notes the impact of sanctions “Russia will be stronger than the EU. [Cette dernière] Exports equivalent to 1% of its GDP [PIB] To Russia, [celle-ci] It exports 11% of its GDP to the European Union. Although there are obvious differences between member states. To France, Russia is the fifteenth market and the seventeenth importer.
Selection of our articles on the Ukrainian crisis