An additional array of Western sanctions would deliver “new shocks” to a Russian economy already reeling from the loss of billions since the country’s 2014 invasion of Ukraine, one of Moscow’s top economic officials admitted Tuesday.
“Unfortunately, any new sanctions will trigger new shocks and require new adjustment efforts,” Alexei Kudrin, the head of Russia’s Audit Chamber, told reporters in remarks carried by state-run news agency TASS.
Russia has lost $6.3 billion since annexing Crimea, the country’s economic development ministry revealed Tuesday, as Western powers have cracked down on key industries, as well as some of the leading oligarchs in Russian President Vladimir Putin’s inner circle. European Union sanctions cost the country $2.4 billion and U.S. restrictions almost $1.2 billion, the ministry reported.
Kudrin speculated that forthcoming sanctions “might be stricter” than previous ones, adding that the blacklisting of aluminum industry titan Oleg Deripaska and energy tycoon Viktor Vekselberg, who attended President Trump’s inauguration, was especially painful.
“Unfortunately, last year’s sanctions against companies of the holding of Deripaska and Vekselberg have substantially influenced not only the market, but investor sentiment as well,” he said. “That was not a shocking impact, but we fall short in terms of investment and economic growth.”
EU and U.S. lawmakers are working in parallel to punish Russia for firing on Ukrainian naval vessels that tried to pass through a crucial contested shipping lane in November. Russian forces seized the ships and arrested 24 Ukrainian sailors in the Kerch Strait incident. Top EU diplomats reportedly have agreed to impose sanctions on eight individuals involved in the clash.
“The objective of sanctions is not that they stay forever, it is to put pressure in order to overcome the situation, so the objective of sanctions is that one day they will be lifted, but we do not see positive steps, and this is why the member states have so far reiterated their will to keep them,” Federica Mogherini, the European Union’s top diplomat, said Monday.
A bipartisan pair of senior senators have something tougher in mind, in the form of legislation targeting Russian energy and financial sectors, as well as the shipbuilding industry and additional oligarchs.
“I know that there are different views in Europe as to whether new sanctions should be imposed on the Kremlin,” New Jersey’s Bob Menendez, the top Democrat on the Senate Foreign Relations Committee, said Monday while making the case for the restrictions to European officials in Brussels. “Moscow will continue to push until it meets genuine resistance. Our collective sanctions measures taken to date, while commendable, have failed to change Kremlin behavior because they have not succeeded in changing the Kremlin’s calculus.”
The sanctions put financial pressure on Russia at a time Putin is trying to modernize his military, with an emphasis on nuclear weapons, even as the government has sought to restrain domestic spending through pension reform.
“It is more difficult to meet the targets we set regarding raising growth rates above the global average,” Kudrin conceded.
