As Russian President Vladimir Putin declared in a fiery speech earlier today that the Donbas region is now part of Russia, and Ukrainian President Volodymyr Zelenskyy has all but been assured of a fast track to NATO membership, the US is trying even more economic sanctions in the hope they'll cause some pain.
The US is imposing what it describes as “swift and severe costs” on Russia, including sanctions on a figure the Biden administration says is key to Russia’s economy, after President Vladimir Putin announced the annexation of regions of Ukraine following what the West casts as “sham referenda.”
Putin signed documents on Friday to formally begin the process of annexing four regions of Ukraine during a ceremony in the Kremlin, a clear violation of international law amid Russia’s invasion of Ukraine that began seven months ago.
US officials have been working behind the scenes to coordinate their response with allies over the course of the last several days and deploy it immediately after Putin’s official action, people familiar with the process said. The response marks an escalation and expansion of the most sweeping sanctions regime ever to target a major economy, one that has been steadily ramped up throughout the more than seven months since Russia’s invasion.
The US, a Biden administration official said, is “targeting additional Russian government officials and leaders, their family members, Russian and Belarusian military officials, and defense procurement networks, including international suppliers supporting Russia’s military-industrial complex” through announcements from the Departments of Treasury, Commerce, and State.
The US actions, which include a combination of export controls, visa restrictions and asset freezes, serve as an effort to further clamp down on Russian supply chains – and the individuals directing the efforts - critical to maintaining the war effort. US officials and their allies have closely monitored real-time Russian efforts to circumvent sanctions already in place to curtail access to critical components for the defense industry, and many of the new targets come from that effort.
That includes sanctions from the Treasury Department on a key player in keeping the Russian economy afloat: Elvira Nabiullina, an economist who has been leading Russia’s central bank since 2013.
President Joe Biden sharply condemned Russia’s annexation of Ukrainian territory in a statement Friday.
“The United States condemns Russia’s fraudulent attempt today to annex sovereign Ukrainian territory. Russia is violating international law, trampling on the United Nations Charter, and showing its contempt for peaceful nations everywhere,” Biden said, adding that those actions have “no legitimacy” and will continue to “always honor Ukraine’s internationally recognized borders.”
He also urged “all members of the international community to reject Russia’s illegal attempts at annexation and to stand with the people of Ukraine for as long as it takes.”
Secretary of State Antony Blinken said Friday that the “United States unequivocally rejects Russia’s fraudulent attempt to change Ukraine’s internationally recognized borders.”
“We will continue the United States’ powerful, coordinated efforts to hold Russia to account, cut Russia’s military off from global commerce and severely limit its ability to sustain its aggression and project power,” he said.
The problem is, Putin has been planning this for a long time.
Putin has spent years building up his defenses, amassing hundreds of billions in foreign currency reserves, bringing much of Russia’s industrial base under state control and selling Russia’s vast energy resources to the world. US officials grudgingly acknowledge that Nabiullina has done an effective job managing Russia through this initial phase of the sanctions, just as she did in 2014 after Putin’s Crimea annexation triggered a much less severe round of sanctions from the West.
This time, Nabiullina has deftly raised interest rates, imposed capital controls, and sought holes and workarounds to float an economy under siege – an effort that came even as the US and allies took the unprecedented step of targeting the central bank directly with sanctions shortly after the invasion.
“A good central banker can do things to buoy the currency,” one senior US official said earlier this year. “They have a very good central banker. We knew that then; we know it now.”
So yes, sanctions have not wrecked the Putin economy just yet, but it has done a lot of damage to the US and EU. Putin is hoping he can force Ukraine to sue for peace with his newly annexed territories intact, especially if energy prices remain sky high.
He may not be wrong. At the very least, we see what the result of that damage has achieved: recent elections in Sweden, Italy, and the Baltics have meant to the rise of Russia-friendly fascism there, and the same is happening here in the US.
Would a GOP controlled Senate block any more aid to Ukraine?
I would say that's a very good possibility.
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