Verfasst von: Dr. Who | 14.3.14

754 | Sanktionen gegenüber Russland haben wenig Wirkung, wenn überhaupt

As German Chancellor Angela Merkel and Polish Prime Minister Donald Tusk discussed the situation in Ukraine and once again threatened Russia they are going to prepare more sanctions to punish the country for trying to protect the Russian-speaking population in Crimea, political observer Dmitry Babich shared in an interview with the Voice of Russia his take on the issue and explained why the proposed European Union sanctions will hardly have the desired effect, if any.

Let’s point out what German Chancellor Angela Merkel has just said.

She met with Polish Prime Minister Donald Tusk and they discussed measures against Moscow as they call it, they talked about common energy policy but I am afraid these measures are not going to be really serious because this is the problem: everything you could do against Russia has already been done. So, the problem is that they have no leeway to make a blow because all possible blows have already been dealt. For example, it is just laughable, they say that they are going to "put on hold negotiations on visa-free regime between the EU and Russia". Well, these negotiations have been dragging on for 25 years. And few people doubt that in 25 years or in 30 years or maybe in 40 years from now we will still be queuing up and the Embassies of western countries here in Moscow to get our visas.

Another terrible threat is that they will put on hold negotiations on the new partnership and cooperation treaty. Let me remind you that the old partnership and cooperation treaty expired in 2004, and so far we lived without it, it was not Russia’s fault. First, Poland blocked negotiations on the new treaty, they had small trade war with Russia, and somehow we all survived without it, and it is a very strange tool to influence Russia. And the third terrible threat is that they are going to include some Russian officials involved in what they call annexation of Crimea into some black list, so they will freeze their accounts. The problem is that we have already had the Magnitsky list, so all the Russian officials who are remotely connected to anything that irritates the West, and there are actually not many, they all already removed their assets from there.

American planes started to patrol the air space a few days ago in the Baltics.

It is an old song. American planes, the planes of NATO countries, some of them were even from Belgium, they have been patrolling the air space of the Baltic countries since they were taken into NATO in 2004, again there is nothing new. It was unpleasant news for Russians in 2004 and I remember that there was a scandal about it, but they already did it, so I don’t know what else they can do now. The major fault of the western policy towards Russia was that it has been so hostile, it has been so devoid of any dialogue that now when there is a real reason for confrontation, they have no cards on their hands. They already played them before.

What is going on in the White House?

I would say that first in the White House the possibility to apply sanctions is even smaller than in the EU because we have just about 12 billion trade between Russia and the US which is miniscule. Russia’s trade with the EU is much bigger but against what can the EU do? Merkel and Tusk discussed it and the only option that was voiced in the EU was that the EU would stop cooperating in the North Stream project and in the South Stream project, the two projects, which were supposed to carry Russian natural gas to the EU bypassing Ukraine.

Estelle Winters


  • Joe Tierney Joe Tierney, 13 March 2014, 22:50 #

    Predominantly, articles in the West regarding the effect of sanctions on Russia are wishful thinking. So-called "analysts" love to cite capital flight figures – but those figures largely represent rich Russian businessmen (oligarchs) stashing cash overseas – something Putin is aware of, has spoken against in the recent past and likely has the means to limit and reverse, going forward. To read articles such as this one, a person would conclude that there is no such thing as repatriation of funds – as if the capital flight is permanent. But it is not – repatriation of capital occurs under many circumstances, including those governed by politics and policies. It is important here to remember – Putin and his inner circle are predominently ex-KGB, while those outside (but operating near) the circle of governance are wealthy businessmen – oligarchs. Mr. Putin has shown before that he can bring the oligarchs to heel – especially when it is in the interests of the Russian State. He has made them rich since he took office in late 1999, as he promised, by revitalizing the Russian resources-based economy and affording them the opportunity to cash in. They are beholden to him and his inner circle. Mikhail Khodorkovsky (prominent oligarch) made the mistake, early on, of crossing swords with Mr. Putin. Putin made an example of him, and thus brought all the other oligarchs to heel. He can do the same again, if need be. Their bargain with Putin revolves around the aim of restoring the power and influence of the Russian State. Their personal fortunes and interests must come second – they look as though they need a reminder of this, and Putin is fully able to deliver it. So, the biggest risk to Putin is not this nature of capital flight – he can manage and control that. The biggest risk is – global investors souring on Russia. But here too, Putin holds the key cards, because of the attractiveness of resources-based (hard asset-based) investment opportunities like those found in Russia, relative to the opportunities found in the over-developed economies of the West, where profits are inordinately paper-based, and where financial, economic and currency stability are deeply in question. Those economies, while providing big profit opportunities, also carry their own very serious risks, and global investors know they must be prepared to sell out as fast as they bought in. The financial and economics systems in the West are fundamentally shaky – they require constant artificial dollapr-pumping stimulus to keep them from stalling, or much worse. So investors aren’t going to easily take Russia off the table – as long as Putin can demonstrate internal political control and stability, and an awareness of the interests of investors – so far he is managing this risk. Investors are largely ideological and political atheists – they only care about such matters insofar as they contribute to, or detract from, an atmosphere of investment certainty. Mr. Putin holds the cards here – he controls that atmosphere within Russia, and if he acts accordingly, global investors will not shun Russia. Also – the emergence of another ‚earthquake‘ in the West, like the one in the fall of 2008, will even make Russia look more attractive. Sanctions on Russia, and their unforseen repercussions upon the West, could even trigger such an event. This subject needs to be approached without passion, emotion, ideology and wishful thinking. Otherwise, one simply comes away with a shallow analysis of the matter and a false idea of the likely outcome.

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