America and the European Union are talking tough on sanctions against Russia but dig a bit deeper and it becomes clear that these constraints are built on shifting sands. Our secret columnist in Brussels Schadenfreude reports
‘Sanction’ is a funny word. It can mean approval or punishment. So the sentence ‘the West has no plan to sanction sanctions against Russia’ is perfectly meaningful. European Union exports to Russia are around €125bn a year. European imports of Russian oil and gas are worth around €160m a year. Roubles pour into European financial markets to contribute to liquidity. A recent massive Russian investment in Cyprus – probably due future oil prospects – is a vital part of the country’s recovery.
Sanctions that cost are out. Instead when the British and Americans talk about sanctions against Russia because of its incursion into the Ukraine, they do not have the economic sector in mind. The contemporary version of sanctions is designed to hit significant individuals. Punishing entire populations only serves them to unite with their leaders.
So the talk is of sanctioning individuals by asset and travel freezes. The effect would be that the named individuals could not travel to the countries imposing the sanction and would not have access to any investment or other funds they have in the sanctioning countries. This is hardly like to bite.
Any sensible Russian plutocrats will have taken precautions to remain in control of their foreign-placed assets – through nominees, for example – and there are plenty havens for them. Travel bans will be an inconvenience but instead of going to country X to meet their contacts, they can invite them to come to Russia or to meet in a ‘neutral’ country. To wound individuals but not to hurt populations is an illusion with great political capital attached.