posted at 03:50
Author Name: Sam Ro
Vladimir Putins Response To New Sanctions
The U.S. and the European Union announced a fresh round of economic sanctions on Russia in their efforts to punish to the country for its ongoing involvement in destabilizing Ukraine. "We think Putin now faces a stark choice between a pragmatic response, supporting de- escalation in Ukraine in return for neutrality, decentralisation and the lifting of sanctions - or what we characterise as a 'patriotic' response, in which Putin focuses on support to the pro-Russian separatist movement in Ukraine, which could trigger a further tightening of sanctions and deepen the divide with the West," they wrote in a note to clients on Tuesday. Sanctions often just spark nationalism, and anger is often directed toward the implementer of those sanctions. "Russia has announced that it will not respond in an 'eye-for- eye way' - and in any case, we think that a reciprocal approach would not be effective, given different dependencies," said the analysts. "For instance, few G7 citizens or leaders have assets or family in Russia, and Russian banks are not an important source of finance for G7 countries. In fact, if Russia responds with economic measures, we think the most effective measures are likely to be restrictions on exports of oil and gas." "We are skeptical at this stage that Russia would block oil exports, given the disruptive impact this would have on the budget and trade," said the analysts. "Moreover, Russia did not block oil exports in the early 1980s, when the Cold War was at its height." For now, Russia's response is likely to be more targeted.

Posts Archive