Sanciones para Rusia

Biden Authorizes Sanctions Against Russia; Refuses Sending U.S. Troops to Aid Ukraine

European Union is also preparing official sanctions against the Russian Federation after the Ukrainian invasion

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On Thursday, President Joe Biden announced new sanctions against Russia for the invasion of Ukraine, which began last Wednesday. These aim to disable the Russian military apparatus, limit the financing capacity of Vladimir Putin’s government and major state-owned companies and banks.

This is the second announcement of sanctions by the White House in less than a week. On Tuesday, the Biden administration issued measures against several Russian government individuals and financial institutions.

“I just spoke with the G7 leaders this morning, and we are in full and total agreement. We will limit Russia’s ability to do business in Dollars, Euros, Pounds, and Yen,” President Biden announced in his speech. The Russian government’s borrowing rate was raised by 15%, which means a rising cost of debt for Russia.

Biden also said that the United States will impose greater sanctions on technology exports to Russia and impose restrictions on Russian industry to compete in technology sectors. According to Biden himself, the sanctions are capable of cutting off Russia’s high-tech imports in half.

While Biden announces new sanctions for Russia, in several cities around the world people demonstrate against the invasion. (EFE)

The Biden administration will also impose sanctions on four of Russia’s largest banks, which together have more than $1 trillion in assets. “That means every asset they have in America will be frozen,” President Biden explained. Among the sanctioned banks is VTB, which has more than $257 billion in assets.

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In addition to the banks, several members of the Russian elite and Putin’s cabinet, as well as their family members, will also be sanctioned. “These are people who personally gain from the Kremlin’s policies and they should share in the pain,” Biden stated.

Although within the sanctions package Biden did not include removing Russian banks from the SWIFT system, he did not rule out that it could be on the list of future measures, if necessary.

Sanctions on Russia could severely affect its economy

According to Jake Cordell, journalist of The Moscow Times, Russia would find itself on the verge of an “economic crisis” after the beginning of hostilities with Ukraine, due to the economic sanctions that will be imposed on it by the West. The Russian authorities themselves recognize the impact of the sanctions and according to officials, they have up to $630 billion dollars to cope with the impact of the economic sanctions.

The Russian government in recent years has maintained a fiscal surplus and its external debt barely exceeds 20% of its GDP, so Russia does not depend on international debt to finance its public spending.

On the other hand, the Russian economy is facing the highest inflation seen in six years, with an increase of more than 8.7% per year, so a further devaluation of the ruble would affect even more the Russian consumer’s pocket.

Las sanciones anunciadas por la administración Biden podrían escalar el tenso ambiente que se siente en Rusia, donde ha habido masivas protestas en contra de la invasión ordenada por Putin. (EFE)
The sanctions announced by the Biden administration could escalate the tense atmosphere felt in Russia, where there have been massive protests against the invasion ordered by Putin. (EFE)

In Russia up to 75% of the raw materials and capital goods needed to manufacture basic consumer goods are imported, so a devaluation of the Russian currency would also affect the productive capacities of the economy.

European Commission President Ursula von der Leyen said last Thursday that the European Union will impose a package of “targeted and massive” sanctions on Russia due to the aggression in Ukraine. The sanctions will range from restrictions on foreign assets of Russian officials to possible limits on energy purchases from Russia.

Russia earns up to $90 billion in revenue a year from energy sales to Europe, so a package of sanctions on energy purchases, or a restriction imposed by Putin himself, could have costs in the millions for Russia.

According to European Union officials, an official sanctions package for the Russian Federation, approved by the 27 member nations, will be ready by Friday.

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