WASHINGTON: US President Joe Biden on Thursday announced “severe” economic sanctions that will make President Vladimir Putin a “pariah” for invading Ukraine, but conceded a lack of Western unity for enacting an even tougher measure.
In a speech from the White House, Biden said four major banks would be hit with sanctions by Western powers and that export controls on sensitive components would “cut off more than half of Russia’s high-tech imports.”
“This is going to impose a severe cost on the Russian economy, both immediately and over time,” Biden said.
The measures, on top of a raft of other sanctions already announced this week, will make Putin “a pariah on the international stage,” Biden said.
“Any nation that countenances Russia’s naked aggression against Ukraine will be stained by association,” he said.
Biden confirmed that for now there was no attempt to put sanctions directly on Putin, who is widely reported to have amassed a huge, secret fortune during his two decades in power.
He also said that a much-talked-about move to cut Russia from the SWIFT international payments system — essentially crippling its banking sector — was not happening.
Ukraine pleaded for yanking Russia from SWIFT on Thursday, but Biden revealed that the Western coalition could not come to an agreement.
“It is always an option but right now that’s not the position that the rest of Europe wishes to take,” he said.
– G7 closes ranks –
Biden spoke to the nation after having attended a virtual, closed-door meeting that lasted an hour and 10 minutes with the Group of Seven.
The group of rich Western democracies — Britain, Canada, France, Germany, Italy, Japan and the United States — said it was standing firm against Russia’s “threat to the rules-based international order.”
Biden tweeted that G7 leaders “agreed to move forward on devastating packages of sanctions and other economic measures to hold Russia to account. We stand with the brave people of Ukraine.”
In a joint statement, the seven industrial powers also said they were “ready to act” to minimize disruptions to world energy markets as a result of Moscow’s assault on Ukraine and with sanctions already targeting a major pipeline from heavyweight energy producer Russia.
In London, Prime Minister Boris Johnson said Britain was freezing the UK assets of Russian titans in banking and arms manufacturing, sanctioning five more oligarchs, and banning Aeroflot.
And Germany’s vice-chancellor, Robert Habeck, signaled Thursday that the Western sanctions aimed to “cut off the Russian economy from industrial progress” and attack and freeze assets and financial holdings, and… dramatically limit access to the European and American markets.”
– Next step –
The first round of Western sanctions was unleashed Tuesday, after Putin announced he would send troops as “peacekeepers” to two small areas already controlled by Moscow-backed separatists.
The US government joined European allies in imposing sanctions on two Russian banks, Moscow’s sovereign debt, several oligarchs and other measures.
Then on Wednesday, as the Russian invasion force became clearly primed to attack, Biden announced he was imposing sanctions on the Nord Stream 2 natural gas pipeline from Russia to Germany — one of Moscow’s highest-profile geopolitical projects.
Germany had earlier announced it would block the pipeline from opening for deliveries.
US State Department spokesman Ned Price warned this week that “no Russian financial institution is safe.”
Some measures risk causing economic fallout for Western countries and could imperil the global economy recovery after the Covid pandemic. Already stock markets are tumbling and oil prices are soaring over $100 a barrel.
The SWIFT option in particular is seen as problematic. It would at least for some time disconnect Russia from basic commerce — hugely disrupting Putin’s economy — but it would also carry considerable potential aftershocks to the wider, US-led financial system.
