Biden’s sanctions seem contradictory, but leave the door open for Putin

Joe Biden strikes again with the bite style of Vladimir Putin’s handling of his foreign policy towards Russia.

At first glance, presenting the most robust sanctions package against the Kremlin since 2018 two days after inviting the Russian president to speak about the delicate crisis in Ukraine seems contradictory.

But a closer look at the measures shows that they signal to the Kremlin that Biden is ready to face, but has left room for the Russians.

Although noisy, the expulsion of diplomats and individual sanctions are just common political annoyances. They have happened before and will continue to happen, with the usual retaliation with the same measures.

It gets complicated when it comes to financial measures.

Since Putin annexed Crimea to prevent Ukraine from joining NATO (Western military alliance) in 2014, Russia has experimented with various economic sanctions applied by the West.

The recession that the country faced in 2015-2016 is often read as the toll of action against its neighbor, but this ignores the real crisis that Russia faced was that of falling oil prices. oil, the export of which is at the heart of its economy.

There were even positive side effects. Russian agriculture, with the reverse sanction banning imports from the West, developed a lot during the period and became as big as the oil industry. There was food inflation, but real import substitution.

More important for the Kremlin, instruments were gradually put in place to protect itself from the effects of punishments. In 2020, foreigners bought just $ 5 billion of the $ 73 billion issued in Russian bonds, according to Rosstat, the federal statistics service.

Of course, there were consequences, measured differently by analysts. The International Monetary Fund calculated in 2019 that the sanctions alone cost 0.2 percentage point of GDP growth each year since 2014.

Complaints have also been lodged in Europe, which participates in these earlier sanctions, as trade with Russia, the continent’s main source of energy, has been hampered.

With all its splendor, the combo of sanctions of this Thursday (15) admits several caveats. The main one, the ban on trading Russian securities, only concerns new issues. In addition, this does not prevent transactions from being carried out through Russian state-owned enterprises in the secondary market.

If there was a total veto on any negotiation, there would be a monstrous problem for the Russian economy. In that sense, Biden fired a warning shot.

It should also be noted that the package of companies under sanction was not included in those already undergoing sanctions for the construction of the Nord Stream 2 gas pipeline with Russia. This is another concession to Germany, Putin’s partner in the company and its main beneficiary, but also it is a sign.

There will, of course, be some weeping and gnashing of teeth in Moscow, especially as Biden confirms his style of play. The American has chosen Russia as the opponent he hits the hardest on, leaving his greatest strategic enemy, China, on alert.

This had already happened early in his tenure, when Biden agreed to Putin’s terms to extend the only current strategic nuclear weapons limitation agreement Donald Trump had allowed to die.

At the same time, he announced an investigation into the circumstances of the poisoning and imprisonment of opponent Alexei Navalni and other misdeeds related to Putin, such as the famous and unfinished action in the 2016 elections and 2020.

Soon after, the United States announced ad hoc sanctions against Russia. All of this appeals to local fans and reinforces the image of the tough guy of Biden, accused in the election campaign of being hesitant and fragile at the height of his 78 years. Of course, with China it’s different, but that’s for later.

Such treatment is frowned upon in Russia, which, even for its nuclear power equal to that of the United States, wants to be treated as a pair. And no American president had ever called his Russian colleague a murderer.

This makes Biden’s tactics both smart and dangerous, especially when there are perhaps more than 80,000 Russian troops concentrated around Ukraine’s pro-Kremlin breakaway areas, themselves under threat of a takeover by Kiev.

The American had withdrawn Wednesday (14) in sending two warships to the Black Sea, after direct threats and a Russian military exercise with live ammunition in the region. It matched Biden’s call for a summit.

It is uncertain what impact the bite after Thursday’s coup will have on conversations, except it is assumed that Biden warned Putin of what he was going to do in his phone call.

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