Punitive measures – economists: scope for further sanctions – economy
According to economists, the West can still significantly increase the sanctions against Russia because of the attack on Ukraine. “He hasn’t shot the most poisonous arrow yet: stopping gas imports,” said the director of the Austrian Institute for Economic Research (WIFO) in Vienna, Gabriel Felbermayr. According to the Federal Statistical Office, Germany alone transferred 19.4 billion euros for oil and natural gas to Russia in 2021. “However, this weapon would also be very expensive for the EU,” said Felbermayr. Above all, natural gas, which is also important for industry, cannot be easily replaced by imports from other countries.
The trade expert at the Kiel Institute for the World Economy (IfW), Hendrik Mahlkow, sees it similarly. “We’re not at the maximum yet,” he says. In this way, the western allies’ trade in goods with Russia could be completely stopped, which did not happen even during the Cold War with the Soviet Union. “That would be the sharpest sword, it would hit the Russian economy very hard,” said Mahlkow. According to IfW calculations, a trade boycott of gas alone would cause Russia’s gross domestic product to collapse by 2.9 percent. “Russia is dependent on the EU markets,” said Mahlkov. The European Union accounted for more than a third of Russia’s total goods exports in 2020. Conversely, however, the EU only delivered around four percent of its exports to Russia and obtained a good five percent of its imports from there.
The experts also see scope for tighter sanctions in the financial sector. “The exclusion of many Russian banks from the Swift system is not comprehensive,” Mahlkow said. “There are still transactions, especially in the energy sector, that are exempt from the Swift ban.” So far, only 70 percent of Russian banks have been banned from the international payment network Swift. All private banks that are under state hands could also be thrown out of Swift.