By Silvia Andreoletti
Sanctions against Russia have been until now the main weapon used by the West to help Ukraine, but they might be doing more harm than good.
Ever since Russia’s invasion of Ukraine in February 2022, the eyes of the world have been turned to the region and on how to help Ukraine defend itself against its invaders. While other, more extreme measures have gained traction, such as letting Ukraine join the EU or NATO in an expedited process or declaring Ukraine a no-fly zone, most understand the practical limits of these ideas: the former, for example, would be almost impossible in the short term as well as cause a diplomatic sulking war we would never see the end of, while the no-fly zone would take the world closer to all-out nuclear war than it’s ever been before.
In the name of pacifism and practicality, sanctions have been the weapon of choice: widely seen as fair and low-risk (at least in the West), they have been quickly approved in most EU countries and went into action only days after the invasion started. Sanctions can be doled out in packages (think Kinder eggs, but nastier) and adjusted according to what event they are responding to: they become gradually more severe the graver the event is, which also makes them excellent tools in negotiations as leverage (but only up to a point – more on that later).
Sanctions on Russia have mainly been divided into two fields, each with a separate goal and different implementations.
The first kind are individual sanctions: these are against Vladimir Putin himself as well as more than one thousand others, mainly members of the government and parliament, military staff, businessmen who lead Russia’s biggest companies, and some family members of high-ranking politicians and oligarchs. They include freezing and seizure of assets abroad (from bank accounts to houses and yachts) and travel bans.
This is ostensibly to stop the money being used to finance Russia’s invasion, but there are other useful side effects too: many hope Putin’s entourage will turn against him if the war becomes too damaging to their private lives and finances, thus robbing him of his support. However, that is a very big “if”: so far, there hasn’t appeared to be any dissent in the ruling group in Russia, and Putin still remains very firmly in power.
The other kind of sanctions are macroeconomic ones: restrictions on trade between the EU and Russia, banning products that are Russia’s main exports, and blocking transport of goods through Europe. The financial sector has also been impacted, as Russia has been blocked from accessing SWIFT (not Taylor, but an important messaging service that banks use to keep track of money flow and exchange information between different countries): this in practice means Russia is banned from getting any foreign currency or transferring money abroad, and a large part of state reserves are also frozen.
The purpose of this is to negatively impact the Russian economy as much as possible, in order to make the cost of the war too much to bear and force Putin to focus on internal problems and abandon the invasion. However, this is causing massive amounts of collateral damage. The UN recently warned of a global famine of “catastrophic proportions” caused by pandemic-related disruptions, climate change and the war in Ukraine, as well as the sanctions. Ukraine and Russia are two of the world’s biggest supplier of grain, and Russia is a major exporter of fertilizer, so food supply is threatened both in the short and long term. Famine in Somalia has already reached a level where almost half of the country’s population doesn’t have enough food to survive, to name just one example.
Furthermore, inflation caused by the pandemic as well as the war is weakening economies everywhere. Consumer confidence in Europe is lower than it’s ever been since the start of the pandemic, and in less-developed countries the impact on food supply and prices is even worse.
Meanwhile, the Russian economy is doing just fine. The ruble has just reached an all-time record high, the Russian central bank just cut interest rates (meaning inflation is lower, which is usually a sign the economy is doing well), and as oil prices rise, Russia is finding new markets in Asia to sell to, which is minimizing the impact of the EU’s embargo. Even companies voluntarily pulling out of Russia didn’t have the major effect it was hoped they would. When McDonalds’s left Russia, saying its presence in the country was not “consistent with [its] values,”, it was celebrated as an act of corporate responsibility and ethics, and was expected to be a huge hit on Russian morale. However, after less than a month, most McDonald’s locations reopened under a different name and owned by a Russian oligarch, selling essentially the same famous Big Macs and fries.
Right now, the ones who seem to be suffering the most from EU sanctions on Russia is the EU itself, as well as the weakest and less-developed countries in the rest of the world. The overwhelming question then seems to be: what now? If the EU rolls back sanctions, it would be seen as tacit complicity with Russia and amount to leaving Ukraine alone in the face of its aggressors. However, any more sanctions would have a crippling effect on European economies and would not necessarily have the desired impact on the Russian one – if anything, it could bring Russia closer to India and China and weaken the EU’s power even more. If the end goal is reaching a negotiated settlement with Russia, more sanctions will also be counterproductive: if the EU uses up all its most damaging economic weapons now, Russia will have nothing more to lose and might become even more aggressive towards Ukraine and the West.
This is not to say the EU or Ukraine are to blame for all the troubles happening in the world, and all things considered, sanctions might only be the worst way to manage the Ukraine crisis “except for all the others,” to paraphrase Churchill. However, sanctions are also not the uncontroversial golden bullet to punish Russia and stop the war with no repercussions for anyone else they are often hailed to be.