The U.S. and Europe announced this week they are willing to adopt the harshest economic sanctions yet on Russia. This decision was made a day after the leaders of Germany, Britain, France and Italy agreed with President Obama that additional action was imperious as a result of the Russian forces buildup along the border with Ukraine.
This action was decided Tuesday during a joint videoconference in Brussels, as a result of the Russian-backed separatists downing the passenger jet belonging to Malaysia Airlines on July 17 in eastern Ukraine. Almost 300 people died in the crush.
“It’s precisely because we’ve not yet seen a strategic turn from Putin that we believe it’s absolutely essential to take additional measures, and that’s what the Europeans and the United States intend to do this week,” said Tony Blinken, Obama’s deputy national security adviser.
The European Union is Russia’s main trading partner and therefore it intends to restrict transactions with Russia’s state banks, as well as limit technology exports vital for the country’s oil and weapons industries. However Russia has found salutary moves, as it decided to align itself more closely with BRICS, representing the five major emerging economies of Brazil, Russia, India, China and South Africa.
A senior White House official said last week that the West’s sanctions goal is to achieve “substantial impact on Russia without putting at risk the global economy.” The Obama administration has weighed additional forms of attack, such as arms embargoes. “Our belief is that, generally, economic measures have the potential of the greatest impact on Russia’s calculus and the calculus of those around Putin.”
Things have got worse during the past days, as President Putin’s behavior has seemed more unpredictable than ever, amid escalating violence in the eastern Ukraine. Moreover he has failed to return several phone calls from Angela Merkel, the German chancellor.
In the meantime the U.S. released satellite images that prove that rockets have been fired from Russia into eastern Ukraine and that heavy artillery for separatists also crossed the border.
Unfortunately, actual efficient measures have to be carefully planned, as there’s a delicate relationship between Europe and Putin’s Russia. For instance European business lobbies have warned against these new sanctions. The Association of German Chambers of Commerce and Industry said some 300,000 jobs depend on exports to Russia. In addition, they fear Moscow could hit some of the more than 6,000 German firms doing business in Russia.
Despite the fact that Russian banks will be barred from listing new bond or equity issues on European exchanges, oil and gas imports will not be targeted, because of concerns about the impact on Russian energy imports. The EU will instead target “sensitive technologies” that could be used in deep-sea drilling, arctic exploration and shale oil extraction, business worth about $ 201 million.