Sanctions on Russia: The Western Response to the Ukraine Conflict

Created: 02/22/2022, 14:41

By: Max Schaefer

In the Ukraine conflict, the USA, the EU and Western allies decide on tough sanctions against Russia.

What measures are in the room?

Frankfurt – The Ukraine conflict is escalating: Russian President Vladimir Putin* has recognized the independence of the separatist regions of Donetsk and Luhansk and, according to media reports, has sent troops to the areas in eastern Ukraine.

The USA*, the European Union and other Western countries have immediately announced sanctions against Russia* as a reaction.

Shortly after Vladimir Putin's speech on his plans in Ukraine and reports of troop movements, US President Joe Biden* signed a decree.

It bans doing business in or with the two Russian-recognized regions in eastern Ukraine.

The US goal is "to deprive Russia of the opportunity to benefit from its blatant violations of international law," Biden said on Twitter.

The US government is also considering personally punishing Vladimir Putin.

Joe Biden has not yet explained the possible sanctions against Putin in more detail.

However, it is safe to assume that his assets would be frozen.

The EU, on the other hand, still reserves the right to sanction the Russian president directly.

Sanctions against Russia: This is what the EU is planning in the Ukraine conflict

In view of the Russian escalation in the Ukraine conflict*, the EU Commission announced other serious sanctions against Russia on Tuesday (February 22, 2022).

Accordingly, the EU plans to ban trading in Russian government bonds.

This is intended to make it more difficult for the Russian state to refinance.

Several hundred people and companies are also to be added to the EU sanctions list, including 350 members of the Duma* who voted to recognize the alleged "people's republics".

Banks doing business in eastern Ukraine have also been hit by the sanctions.

Olaf Scholz announces the temporary stop of the Nord Stream 2 gas pipeline. It is one of many sanctions against Russia by the West.

© Kay Nietfeld/dpa

When people, entities and companies are added to the EU sanctions list, all assets present in the EU are frozen.

Business may no longer be conducted with the sanctioned persons.

In addition, those affected are no longer allowed to enter the EU.

Ukraine conflict: Britain announces 'barrage' of sanctions against Russia

There are also plans in case of an attack on the whole of Ukraine.

Then there are, among other things, export bans on high-tech technology.

The package of sanctions proposed by the EU Commission still has to be approved by the foreign ministers of the 27 member states in the Council of Ministers.

A meeting in Paris is planned for Tuesday (February 22, 2022).

Britain's* Prime Minister Boris Johnson* has announced a "barrage" of economic sanctions against Russia.

Russian companies are to be prevented from raising capital on British markets.

Sanctions against Russia in the Ukraine conflict: Nord Stream 2 stopped, exclusion from Swift is in the air

The exclusion of Russia from Swift is a possible sanction in the Ukraine conflict.

This is the main international banking system used by financial institutions to inform each other about cross-border payments.

In the EU, according to Bayerischer Rundfunk, Russia is unlikely to be excluded from Swift.

It is feared that international trade could be disrupted as a result.

The Russian energy sector is also a target of western sanctions.

The most prominent measure is the stop of the Nord Stream 2 gas pipeline between Russia and Germany, which Chancellor Olaf Scholz* (SPD*) announced on Tuesday (February 22, 2022).

Western sanctions in the Ukraine conflict: This is how Russia wants to protect itself

After the illegal annexation of Crimea in 2014, sanctions were repeatedly imposed on Russia, weakening the ruble and reducing foreign investment.

Since then, the Kremlin has been trying to take measures to prevent the complete collapse of the economy and the financial system in the event of further punitive measures.

The country has set up a foreign exchange reserve in the central bank and around 13.5 trillion rubles, the equivalent of 157 billion euros, in the Russian sovereign wealth fund.

Due to the dependence of many European countries on Russian oil and gas, sanctions against Russia could also have disadvantages for the West.

This could increase energy prices.

Russia, which has looked for other customers in the past and is increasingly supplying to China*, could also turn off the gas tap completely.

Western sanctions: Russia's elites have hardly been hit so far

The economic and political elite in Russia has hardly suffered from sanctions so far, but the general population has: purchasing power has been steadily declining, the current high inflation and the gradual devaluation of the ruble are aggravating the situation.

Although the central bank learned lessons from 2014 to protect the currency, the ruble has been falling since the start of the Ukraine crisis.

(ms with AFP/dpa)