Russia: A Wave of Sanctions

Update: Russia’s invasion into Ukraine has set in motion a range of punitive measures against Moscow. It might be only the beginning.

• Vladimir Putin’s decision to recognize two separatist regions in eastern Ukraine as independent and to send troops has stirred up emotions in the West resulting in a new wave of economic sanctions.
• A usually reluctant Germany went ahead by putting the approval of the Russian-German gas pipeline Nord Stream 2 on hold. The US and Central Europeans had urged the country to do so for years.
• The EU, the US and the UK are targeting Putin’s inner circle including oligarchs and companies which are beneficiaries of trade with the West. The Kremlin is already used to these measures however.
• The big question is if and how severely western economies will be hurt by the war and the impact of sanctions. German analysts are cautiously optimistic that the energy sector will show resilience.
• European and American companies are preparing for a new reality: a war in the center of Europe and the possibility of trade disruptions. Exposure to both Russia and Ukraine is small hoewever.
• The Russian government is betting on Western countries to buckle when rising prices start to hurt their population. But for the time being Nato countries are committed to stick to sanctions.