The newspaper writes that the economies of Western countries are more vulnerable than their governments expect. New York Times. After the introduction of anti-Russian sanctions, the USA and a number of European states received a very strong “rebound”, while the measures taken did not have a tangible effect on Russian President Vladimir Putin and did not stop special operations.
“US officials have promised that if Russia attacks Ukraine, its financial system will be undermined. President Biden (Joe – socialbites.ca) boasted in March that the sanctions were “crushing the Russian economy” and that “the ruble was in ruins”. However, Russian oil revenues are breaking records as crude oil prices rise. The ruble hit a seven-year high against the dollar this week after falling in February.
At the same time, the White House assures that the Russian economy has already suffered and will continue to grow. On June 26, the G7 leaders will meet in Madrid to discuss new plans to tighten the screws even further. However, the authors of the material say that Putin still has all the power and is unlikely to enter peace talks with Ukraine while “his army is gaining momentum.”
The publication recalls that Elina Rybakova, deputy chief economist of the Institute of International Finance, said last week that the Russian financial system has already returned to normal functioning.
“Few Biden officials expected the sanctions to stop the war immediately. But neither did the administration and its European counterparts anticipate the economic pressure they are experiencing now. Despite initial assurances that the sanctions would not affect Russia’s energy exports, the United States has since banned imports of Russian oil, and the European Union has announced plans to cut its imports by 90% this year.
Partly as a result of these actions, energy prices rose sharply in the US and Europe. And, oddly enough, sanctions and related embargoes allow America’s main strategic rival, China, to purchase large volumes of oil at deeply discounted prices, as Russia tries to recoup its customers’ lost revenues.
Most governments often misunderstand the worldview of the Russian elite and “what Putin cares about,” according to Alina Polyakova, head of the Center for European Policy Analysis. “It has long been clear that Putin and his circle do not care about economic growth. What worries Putin and the elite is income, and they still get revenue from the sale of energy, ”says Polyakova.
Ukraine is fiercely resisting, so the conflict is lasting longer than experts initially predicted, and Russia and its rivals are engaged in a long-term and still escalating economic war.
“The key question now is whether Western capitals will be prepared to endure sanctions. Speaking to reporters last week, Mr. Biden said that “at some point it’s going to be kind of a waiting game: what the Russians can stand and what Europe will be ready to stand”, the NYT.
Politicians’ views on whether to introduce the next package of sanctions “vary differ”. The newspaper recalls that in recent discussions about the embargo on Russian oil, Hungary refused to discuss the restrictions and exceptions were made as a result.
“Overall, I think we’ve reached the political limit of sanctions,” said Gerard DiPippo, senior fellow at the Center for Strategic and International Studies. “There is probably no need for new sanctions and certainly not enough to stop the conflict. But Ukraine’s battlefield victories are probably both necessary and sufficient. That should be the focus of US policy,” he adds.
US and EU sanctions
On February 22, the EU sanctioned State Duma deputies who voted for the recognition of the independence of the Donbass republics. The EU has also banned European companies from doing business with the LPR and DPR, and has imposed sanctions on Russia’s public debt, limiting access to the community’s capital and financial markets. Three days later, a second package of measures was agreed upon: 78 Russians were blacklisted, including President Putin and Foreign Minister Sergei Lavrov. On February 28, the third sanction package started to work, the assets of the Central Bank were frozen.
On March 15, the EU agreed on a fourth package of restrictive measures, specifically banning it from doing business with 12 Russian companies with state participation of more than 50%. The EU imposed restrictions on the trade of metal products with Russia. The fifth package on April 8 meant a ban on the import of coal and other solid fossil fuels from Russia, as well as the export of semiconductors, machinery and transport equipment to the Russian Federation. The sixth package of restrictions for the Russian Federation was adopted on 3 June. It includes a delayed embargo on overseas shipments of oil and petroleum products from Russia, disconnecting several more banks from SWIFT, as well as suspending the broadcast of a number of Russian TV channels in Europe.
The United States decided to end its permanent normal trade relations with Russia and also banned energy imports. Washington has also approved a legislative initiative that includes the seizure of certain assets linked to the Russian Federation with the aim of selling them and providing additional assistance to Kiev. The law also covers assets of the Central Bank of the Russian Federation blocked due to sanctions, and assets of Russian entrepreneurs that have been arrested.
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