French President Emmanuel Macron confirmed this Friday that the EU intends to impose sanctions on high-ranking Russian politicians.
After the shock of Russia's attack on Ukraine, the West responded with rapid punitive measures. The European Union and the USA imposed far-reaching sanctions on Russia, but have not yet pulled out the whole register.
At a crisis summit in Brussels – the Ukrainian President Volodymyr Zelenskyj was involved – Chancellor Olaf Scholz and the other EU heads of state and government agreed on punitive measures in the areas of energy, finance and transport – 70% of banks and state-owned companies are targeted. In addition, there should be export controls for certain products and restrictions on issuing visas.
Punitive measures include: The asset freeze of Russian groups, banks and individuals. Exports of semiconductors and other sensitive goods to military-affiliated organizations in Russia are suspended.
Six Russian banks, including the country's second-largest institution, VTB Bank, are completely affected by US sanctions. This means that US persons and companies are not allowed to do business with them, their assets in the US – or even their assets that come into contact with the US financial system – are frozen. In addition, the government bans all US institutions from maintaining accounts for the largest Russian financial institution, Sberbank. This makes transactions in US dollars extremely difficult for the bank, which, according to the White House, manages around a third of all Russian assets.
The dollar and the euro are the world's most important trading currencies, which are also not easy to replace in many international trades. The US Treasury Department explains it this way: "Russian financial institutions carry out $46 billion worth of currency transactions worldwide every day, 80 percent of which are in US dollars. The vast majority of these transactions are now suspended." Around 80 percent of all Russian deposits are affected by sanctions, according to the ministry.
OF THE LEYEN
"Our unity is our strength," stressed EU Commission President Ursula von der Leyen after the decisions:
"President Putin has decided to bring war back to Europe. This is an all-out invasion of Ukraine, it fundamentally challenges our peaceful order."
A phone call from French President Emmanuel Macron to Kremlin chief Vladimir Putin initially brought nothing. After the offensive began, Macron became the first Western politician to speak directly to Putin. The French President called the conversation "open, direct and short". He asked Putin to end the fighting as soon as possible. But this had no effect. Macron spoke out in favor of not letting the thread of the conversation break completely.
Emmanuel Macron, President of France, currently holding the EU Council Presidency:
"While we condemn, sanction, continue to make decisions and act, we leave this path open so that on the day the conditions are met, we can achieve an end to the fighting for Ukrainians."
However, the European heads of state and government were not entirely in agreement: Several, including Kiev, called for even tougher penalties, also with a view to the banking communication network SWIFT (Society for Worldwide Interbank Financial Telecommunication). A Swift exclusion would effectively exclude Russian financial institutions from the global financial system.
But US President Joe Biden said the measures taken would hit harder. States that make up about two-thirds of global economic output are behind the sanctions.
Joe Biden, US President:
"First of all, the sanctions that have been proposed for all of their banks are of equal scope, perhaps more severe than SWIFT. Plus, it remains an option, but at the moment that's not the position the rest of Europe wants to take."
GREAT BRITAIN
Great Britain and its partners want to freeze all assets of the Russian bank VTB. Access for all Russian banks to the British financial system will also be stopped. The money houses should no longer trade in pounds and do no business in London.
Japan is also blocking financial transactions and the delivery of semiconductors and raw materials with immediate effect.
The USA imports significant quantities of Russian oil, but overall the economy is much less closely linked to Russia than that of the European countries. But the US government controls one powerful weapon: access to the world's largest financial market and the global reserve and trading currency, the US dollar. Washington is now using this lever with its western allies.
AUSTRALIA/CHINA
Australian Prime Minister Scott Morrison accused China of throwing a lifeline to Russia by easing trade restrictions while much of the world tries to stop Russia's invasion of Ukraine.
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