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Global Economy

More US sanctions – and more soldiers

US President Joe Biden has announced further "strong" sanctions against Russia in response to the Russian attack on Ukraine. The penalties should hit the Russian financial system and, via export controls, also the technology sector, Biden explained in the White House.

Specifically, four Russian banks are to be cut off from the US financial system, which together held around a third of Russia's assets, said Biden. Among them is also Russia's second largest institution, the VTB Bank. The banks would thus be excluded from the US financial market and transactions in US dollars. The same steps are also planned by partners in the EU, Great Britain and Japan, Biden said.

Biden: "Putin is the aggressor"

Certain large Russian companies should no longer be allowed to take out loans in the USA. In addition, exports to Russia are to be restricted and sanctions imposed on other individuals close to Putin. Biden did not initially give details, but emphasized again that America is not acting alone, but together with its partners. Biden said Putin wanted war, but now he has to be isolated internationally and become a "pariah on the world stage".

However, Putin should not be personally sanctioned. While the option is "on the table," Biden said, he did not respond to reporters' question as to why no sanctions will be imposed on the Russian president personally.

More US soldiers to Germany

In addition, the US wants to move more soldiers to Germany: "Now I authorize the deployment of additional US forces to Germany as part of the NATO response," he said. According to the Pentagon, there should be 7,000 soldiers. But there will be no deployment in Ukraine, Biden said. The troops are there to defend NATO partners: "We will defend every inch of NATO territory," said Biden.

Problems threaten Russian economy

The United States had already banned trading in Russian government bonds and imposed sanctions on two smaller state-owned banks on Tuesday as a result of Russia's recognition of the separatist areas in eastern Ukraine. The White House had emphasized that the punitive measures could also be extended to the largest credit institutions if Russia invaded Ukraine.

According to the White House, the majority of Russian currency transactions and about half of foreign trade were still in US dollars. If the EU and the US were to exclude Russian banks from their financial systems, Russia could face dramatic economic upheavals. The dollar and the euro are the main trading currencies, which are also not easy to substitute in many international trades.

Gas and oil prices are also rising in the US

With reference to the rising gas and oil prices, which are also causing problems for the President domestically, he explained: "I know it's hard and the citizens are already suffering." But the US would have to react to this aggression or they would end up worse off. He called on US companies in the oil and natural gas sector not to take advantage of the situation to raise prices.

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