pearlbeer wrote: ↑Thu Feb 22, 2024 1:13 pm
But sanctions? What is left to sanction? Didn't we drop the hammer repeatedly post invasion? Didn't we kick Russia out of Swift (the global banking standard)?
WTF is left to sanction and why the hell WOULD there be something left to sanction?
I'm lost as to why any democratic-NATO-adjecent-type country would do anything with Russia. Speaking of "sanctions"...are there any, really? Where is the crippling of the Russian economy and potential collapse of currency we were all promised? Where are the good and food shortages? It's been years now of war in the Ukraine with the US throwing nearly a trillion dollars their way. That's about half the GDP of Russia. So, I'm at a total loss as to how and why we levee additional sanctions. Are they a punishment, will they deter future acts? Did our "most serious sanctions ever" previously do shit to slow or stop the invasion in Ukraine?
Andrew Ross Sorkin of the NYT attempts at least a partial answer and also explores some of the difficulties around seizing and utilizing Russian assets outside Russia. The rest is taken from Sorkin's daily newsletter:
"Even as Vladimir Putin faces new U.S. sanctions after Aleksei Navalny’s death, the Russian president emerged this week with two big corporate concessions that could strengthen his hand. Danone, the French food conglomerate, agreed to sell its Russian assets to a Putin crony, at a steep discount, while the snack maker Mondelez said it would remain in Russia.
Putin is on something of a winning streak at the two-year anniversary of the Kremlin’s invasion of Ukraine. Despite a price cap on Russian oil exports, the International Monetary Fund predicts solid growth in Russia’s gross domestic product this year. What is more, Putin can afford to play for time as he waits to see if Donald Trump wins in November, perhaps bringing warmer relations and sanctions relief.
“I have very bad news,” Alexandra Prokopenko, a Russian economist who spent years at the Central Bank in Moscow before leaving Russia in 2022, told DealBook. “For the next 12 to 18 months, Putin definitely has the money to maintain the current level of war.”
Vivienne Walt reports for DealBook on the cards that Putin holds:
He has important friends, and is making new ones. After Europe’s ban on Russian oil, Putin found eager buyers in India and China. The supply of discounted fuel is just one way that ties between Moscow and Beijing have deepened. The Chinese have also supplied Russia with key equipment to drill for natural gas in the Arctic after Western companies cut off its access to the technology. Elsewhere, Russia is relying on a shadow fleet of tankers from friendly countries to move its oil around the world, earning billions a month, according to Bloomberg data.
Many Russian professionals who fled after the invasion are returning, having found a chilly reception abroad. Meanwhile, restricted goods like semiconductors, some U.S.-sourced, arrive relatively seamlessly via a newly constructed supply chain that threads from China through the Persian Gulf countries to Turkey. “Russia has switched to a war economy early and with significant success,” Holger Schmieding, an economist at Berenberg Bank, told DealBook.
The Russian economy has been rebuilt around war. Defense and security spending makes up about 40 percent of the country’s budget, after Putin increased Russia’s military budget this year. “Russia is hooked on military steroids,” Prokopenko said.
Pain could still set in. Russians could slowly begin to feel the war’s economic toll. “Putin has enough money for continuing this war for another year,” Sergei Guriev, a Russian economist and provost of Paris’s Sciences Po university, said in an email. “After this he will have to cut nonmilitary spending, like education and health care,” he said. “At some point it will create problems for Putin.”
What it costs the West to enforce sanctions
An $82 million mansion in London’s Hampstead Heath modeled after Versailles. Villas on the French and Italian Riviera. A $325 million superyacht, the Amadea, impounded in San Diego, and artworks galore.
The value of Russian assets, including business property, seized by the West since the Kremlin invaded Ukraine is in the billions. It’s costing Western countries millions more to manage and look after the loot.
Worse still, selling off the sum of frozen Russian assets, as some countries are calling for, could create even bigger financial and legal problems.
Some U.S. officials say it is time to sell off the assets, rather than continue the expensive upkeep. This month, they petitioned a Manhattan court for permission to sell the Amadea, which is owned by a Putin crony, Suleyman Kerimov, and costs taxpayers about $600,000 per month to clean and maintain. In Britain, the authorities have estimated over $1 million in upkeep costs for the frozen Hampstead Heath property.
Some $300 billion in frozen sovereign funds are even more of a headache. They are part of Moscow’s vast investment portfolio that Western banks and financial institutions froze after the outbreak of war. The White House has called for using the funds to rebuild Ukraine.
Some European leaders think that would be a bad idea. Italy, France and Germany worry that such a move would violate international law, harm Europe’s reputation among investors and mess with international trade.
Prokopenko, the Russian economist, said: “It could undermine trust in Europe. Gulf and Asian countries have reserves in Europe. The euro would be less favorable.”
Group of 7 leaders meet this weekend virtually to discuss how to aid Ukraine. One idea is seizing the profits from Russian assets. The payoff could be big. Last year, Euroclear, a clearinghouse in Brussels holding two-thirds of the assets, made a 4.4-billion-euro profit by reinvesting matured Russian securities."