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Global Economy

EU adopts measures against Russia

At a special summit, the heads of state and government of the EU approved a comprehensive package of sanctions against Russia. The punitive measures affect, among other things, the areas of energy, finance and transport. In addition, there should be export controls for certain products and restrictions on visa policy.

EU Commission President Ursula von der Leyen swears by the unity of the EU after around six hours of deliberations, to which the Ukrainian President Volodymyr Zelenskyj was also connected. "Our unity is our strength," she said. Russian President Vladimir Putin is trying to redraw the map of Europe. "He must and he will fail."

However, the heads of state and government were not as united as von der Leyen described it. Several of them called for even more far-reaching measures even before the special summit began. Among other things, the focus is on the banking communication network Swift. A Swift exclusion would effectively exclude Russian financial institutions from the global financial system.

Germany is one of the countries that currently reject this sanctions instrument. Chancellor Olaf Scholz justified this attitude in Brussels with strategic considerations. One should initially stick to the package of sanctions that has been prepared over the past few weeks, he said. Everything else must be “reserved for a situation where it is necessary to do other things as well”. However, Scholz did not say what kind of situation that could be.

Austria's Chancellor Karl Nehammer also spoke out against including Swift in the current package. "Swift is currently not an issue in the proposals either," he said. "The background to this is that Swift's suspension would affect the Russian Federation less than the European Union." Firstly, Russia has its own payment system and secondly, Russia would immediately switch to the Chinese payment system.

According to an EU diplomat, Italy, Cyprus and Hungary also agreed with Germany that it was not the right time for the Swift exclusion. In contrast, several heads of state and government spoke out in favor of the harshest possible punitive measures and some also named Swift.

The Slovenian Prime Minister Janez Jansa emphasized that the strictest possible sanctions package must be decided – including Swift exclusion. And Polish Prime Minister Mateusz Morawiecki said: "We must work for massive sanctions, for strict sanctions against Putin, against Russia. We cannot allow Putin to cross another Rubicon." In EU circles it is considered possible that Russia will be excluded from Swift at a later date. The heads of state and government called on the responsible institutions to start work on a new, third sanctions package immediately. It should also create the possibility of freezing the assets of Russian oligarchs in the EU.

Cut banks off from EU financial markets

According to the information, the main purpose of the sanctions against the financial sector is to cut off banks from the EU financial markets. In the future, they should no longer be able to borrow or lend money in the EU. In addition, the refinancing of Russian state-owned companies in the EU should be prevented. Your shares will no longer be traded in the EU.

Something similar is planned for the energy sector. The main purpose of the sanctions against the transport sector is to cut off the supply of spare parts and other technology to the Russian aviation industry. It was said that this could have a huge impact with relatively little effort and even shut down entire fleets. The export controls for high-tech products and software are intended to make it difficult for other key Russian industries to develop further. The country could be hit hard in the medium and long term, it said in Brussels.

Visa Policy Restrictions

The restrictions on visa policy that have been decided are aimed at Russians, who have previously had privileged entry opportunities into the EU. In addition to diplomats, this also includes business people, for example.

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