EU seeks to drown the Russian economy and includes Putin in second package of sanctions

The European Union (EU) approved this Friday its second package of sanctions against Russia, the result of the start of Moscow’s military operation on Ukraine, with which it intends to drown the Russian economy with financial, energy and commercial restrictions and in which it also included the freezing of assets of President Vladimir Putin.

The bloc’s foreign ministers confirmed in an extraordinary meeting the retaliation agreed hours earlier by the EU leaders, which will begin to be applied once they are published in the EU Official Gazette, a formal step that is expected in the coming hours. .

Issues such as the expulsion of Russian banks from the Swift messaging system or trade restrictions on gas and luxury products are left out of this second package, which the EU reserves to include in new retaliation on which European services are already working. to hit Moscow again, if necessary.

Turning off the banking messaging service to Russian entities would be a serious blow to the Russian economy because it would mean stopping international transactions, but this possibility “is not mature enough” among community partners, explained the EU’s high representative for Foreign Affairs , Joseph Borrell.

“But it is not off the table, it could be adopted in the next few days. We are exploring all possibilities and (further measures) will be taken depending on the behavior of Russia”, expressed the head of European diplomacy.

In any case, the high representative of the EU advised not to wait for this third package of sanctions “in the following hours or days” and stressed that it depends on the evolution on the ground of the war and the behavior of Moscow.

Putin and Lavrov enter the blacklist

One element that did garner the unanimous support of the Twenty-seven this Friday was the inclusion on the blacklist of Putin and his Foreign Minister, Sergei Lavrov, whose assets will be frozen for their responsibility in the military campaign on Ukraine.

This possibility was debated by the Heads of State and Government the night before without the leaders being able to agree on it, but it was unlocked hours later at a meeting of ambassadors of the Twenty-seven and subsequently received the definitive green light from the ministers.

“It is an important step, the only leaders in the world who are sanctioned by the EU are (Bachar al) Assad of Syria; (Aleksandr) Lukashenko of Belarus, and now Putin of Russia”, recalled Borrell to emphasize the significance of the decision.

In addition, the EU extends the individual financial sanctions to the rest of the members of the Duma (lower house of the Russian parliament) who were not affected in the first package of retaliation and also to six people from the “russian financial world” who support the Kremlin and “benefit from eventsBorrell explained.

Cut off access to finance

For the rest, the Twenty-seven have preferred to focus on cutting financing channels and denying access to capital markets to the Kremlin, its public companies and Russian banks through a series of decisions in the financial field, instead of adopting trade restrictions that would also affect the bloc.

Alfa Bank and Bank Otkritie join the entities that had already been sanctioned by the block, the financing of public companies such as Kamaz, Rostec or Almaz-Antey is stopped and the opening of new deposits of more than 100,000 euros to Russian citizens is prohibited in European banks and the purchase of shares in Russian companies.

The EU is confident that these sanctions, which affect 70% of the Russian banking system and companies “key” also in the field of defense, increase financing costs, generate inflation and erode the country’s industrial base, reducing direct investment in Russia.

Added to the financial ones are energy sanctions that seek to prevent Moscow from having the appropriate technology to modernize its oil refineries; those on transport, which restrict the sale of aircraft and aircraft components, and the new trade measures, which attack sectors such as electronics, information technology or telecommunications.