By Darren Smith, Weekend Contributor
The Group of Seven Nations (G7) agreed to impose new sanctions and move more swiftly against Russia for the state’s actions in The Ukraine. The group accused Moscow of violating the de-escalation measures mutually agreed to during the Geneva Accord designed to reduce tensions in the region.
The powers in North America, Europe, and Japan agreed Saturday to impose new targeted sanctions. In an official statement, the G7 announced:
“Given the urgency of securing the opportunity for a successful and peaceful democratic vote next month in Ukraine’s presidential elections, we have committed to act urgently to intensify targeted sanctions.”
The market is also beginning to deal blows to Russia’s increasingly perilous economy. Standard and Poors, a benchmark rating service for sovereign debt and other investments, announced that it was cutting the insurance rating due to the risk of Russia defaulting on its debt; lowering its rating to BBB- making it just one step above a junk rating. This is certain to affect large Russian government owned businesses such as Gasprom that supply the nation with hard currency. The reduction of this rating carries an 18% probably of default within the next three years. Russia defaulted on its sovereign domestic debt in 1998 and plunged the nation into a financial chrisis forstering a devaluation of the Rouble and an 84% rise in inflation.
Could Russia later be an example of hard sanctions working as opposed to a much more costly direct action by both sides militarily?
Standard and Poors last downgraded Russian Debt in 2008, after which Russia’s currency and bonds fell in value. S&P in a recently released statement declared:
“The tense geopolitical situation between Russian and Ukraine could see significant outflows of both foreign and domestic capital from the Russian economy and hence undermine already weakening growth prospects.”
How much the economic costs to Russia will be influential on the senior leadership of Russia, who are receiving a popular boost of confidence and support, or whether it could be spun into a scapegoat to the advantage of President Putin, remains to be seen.
But the actions of Russia, the G7, Ukraine and other stakeholders might find themselves in a multifaceted war of attrition in every sense of the word. But if economic warfare might prove to be formidable to deter and oust aggression in the world, it would be a welcome departure of the death and despair inherent in essentially all state conflicts in past history.
By Darren Smith
Sources:
Deutsche Welle
Standard & Poors
Wikipedia
The views expressed in this posting are the author’s alone and not those of the blog, the host, or other weekend bloggers. As an open forum, weekend bloggers post independently without pre-approval or review. Content and any displays or art are solely their decision and responsibility.
Russia was not a fit space to hold the Olympics. Putin is the goof of the 21st Century. Ukraine is crooked. What are we doing with allowing Poland and Latvia and all these cancer wards into NATO? We are setting ourselves up for a war.
When I hear comments from U.S. government officials, pundits or social commenters, I am ashamed at the self-righteous, arrogant take the various U.S. mouthpieces display whenever talking about anyone outside of the U.S. It is shameful. We collectively as a country (and especially our government!) are not that wise nor do we behave that righteously to judge everyone else. We Americans are human beings just like all our other fellow human beings on this planet. Who was behind those 2006 Ukrainian uprisings? Did we Americans (or our CIA) have a hand in the unrest? Why do we support a coup of the Ukrainian government and risk making Putin an enemy (totally unnecessary and unwise!!!). Why can’t we follow the Chinese version of “imperialism” which isn’t imperialism, but instead, doing good business with the respective country. For instance, we wage war on Afghanistan and hemorrhage treasure and blood, meanwhile apparently China is on the other side of the mountains mining for resources and doing good business with the Afghans, forging long-term relations, while we wage war on these people with money we don’t have and troops that we really shouldn’t throw away for no reason. Why can’t the U.S. have foreign policy with a longer view and just a hint of humanity over commerce?
As an American of Ukrainian heritage, I applaud any efforts the G-7 is making to maintain the sovereignty of Ukraine. That’s what the people were protesting when the former Prime Minister broke his promises to the people. Ukrainians want closer relations with Europe, and resent being tied to Russia’s apron strings.
maxcat What part of an armed coup do you think is GOOD? What does not being tied to Russia’s apron strings MEAN? Do you think that the Ukraine should not have gas from Russia or have any trade with them? You do know that Yanukovych wanted a deal with the EU, but THEY offered worse terms and Russia offered a better deal which would have bailed out the Ukraine on better terms than the one the EU gave. I guess your objection is ANY deal with Russia is de facto BAD. Do you think the Ukraine can get up and move?
Why are fascists now in control of the police and military in the UNELECTED government of the Ukraine? Are you a fascist or think that they are good folks? Why is it that one of the first laws they passed was to deny any official use of Russian? You sound like the xenophobes in the US who want to declare ENGLISH ONLY in the US. I guess you agree with them. Do you want to ethnically cleanse the Ukraine of all persons of Russian origin? By the way, I visited the Ukraine in 1984 so I do know about the place from first hand experience and as a traveler had some Canadian Ukrainians show me around.
Paul Schulte
Dredd – you do realize that the Koch Bros are small potatoes in the oil biz. George Soros of Wall Street fame spends far more funding leftist groups. He is a 1% and you do not go after him, what is the deal? I am sure his funds own oil stock.
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“The more you observe politics, the more you’ve got to admit that each party is worse than the other.” -Will Rogers
Any member of Oil-Qaeda deserves all the wrath they get.
Paul S
Do you have figures that compare Soros to Koch? I understand that it is very hard to verify Koch amounts, as they have managed to create networks that make it almost impossible
George Soros, background and contributions to political and activist groups.
http://www.discoverthenetworks.org/individualProfile.asp?indid=977
Part 5 of a series on the Koch Bros.
http://nypost.com/2014/04/18/those-evil-koch-brothers-5/
How the wrong-wing nuts would handle things and put Putin on the Ritz:
Somebody, including Putin, is on Koch propaganda.
Course, that is their only product in the book-larnin’ department.
They, like Putin, also sell drugs (A History of Oil Addiction).
Dredd – you do realize that the Koch Bros are small potatoes in the oil biz. George Soros of Wall Street fame spends far more funding leftist groups. He is a 1% and you do not go after him, what is the deal? I am sure his funds own oil stock.
The word “bully” is abused here. it needs to be saved for situations like mespos post or here. Putin is a bully. He has a 70% approval rating in his country. Sanctions take time. Ukraine does not have time. Putin will take what he wants. He is smarter, tougher, and more ruthless than any leader out there. I called Putin the most dangerous man in the world when I first came here and was scoffed @ by faux intellectuals. But, it was so easy to see. Putin is Cold War KGB. It was clear to anyone who understand history his goal was to first restore the Soviet Union, and then to look elsewhere, w/o the failed Communist system that proved it’s downfall previously. There is no Politburo for this evil b@stard to deal w/, he is in total control. Even if we threaten military force, Putin learned all he needed to know w/ week kneed Obama’s “red line” in Syria. He saw that the poker playing Obama is a bluffer. Putin will call any bluff. We have a law professor for president, not a leader. We all pay for our sins.
I agree with the column as far as it goes, but a couple of caveats:
– Putin is playing a weak hand extremely well.
– Obama is playing a very strong hand poorly.
– The Russian tolerance for pain far exceeds that of most western democracies making predictions hard.
– Putin has shown imagination in crafting asymmetrical responses – as an example, if our air base in Central Asia were to be shut down, our Afghan forces would be dependent on Pakistani logistics.
– The Germans (industry, not people) are less than enthusiastic about sanctions on Russia; I suspect that there are European forces undermining our efforts.
Bottom line, I agree that Putin will be pressured into being “sensible”, but both timing and ultimate effectiveness are hard to predict.
rafflaw
Dredd,
I released your post from the spam filter only to find you had rewritten it with only 2 links!
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Thanks rafflaw.
They have to move even more swiftly. The world has shrunk to the size of a grape with regards to “more elbow room.” Social media will be watching.
Dredd,
I released your post from the spam filter only to find you had rewritten it with only 2 links!
Paul,
What is Obama supposed to do in your mind? Attack Russia? Send our finest into harms way again? The economic sanctions as outlined in Darren’s article suggests that they are already working and will work. The idea that we can only influence countries via force is dangerous and faulty.
rafflaw – MAD worked. Obama is a lightweight on the world stage so Putin thinks he can do whatever he wants. Every time Obama has drawn a line in the sand, he has moved it when challenged.
From Dr. Roberts:
(Is the US or the World Coming to an End?).
For those who don’t know Dr. Roberts: “President Reagan appointed Dr. Roberts Assistant Secretary of the Treasury for Economic Policy and he was confirmed in office by the U.S. Senate. From 1975 to 1978, Dr. Roberts served on the congressional staff where he drafted the Kemp-Roth bill and played a leading role in developing bipartisan support for a supply-side economic policy. After leaving the Treasury, he served as a consultant to the U.S. Department of Defense and the U.S. Department of Commerce.” (About Dr. Roberts)
Dredd – it is clear that Putin has no fears of anything that Obama might do, so he is free to do whatever he wants. The biggest problem is that Russia has a natural gas pipeline supplying the Ukraine and can cut them off when he wants. He is also supplying gas to other parts of the EU. We would have to start supplying the EU with natural gas to pick up the slack.
From Dr. Roberts:
(Is the US or the World Coming to an End?).
For those who don’t know Dr. Roberts: “President Reagan appointed Dr. Roberts Assistant Secretary of the Treasury for Economic Policy and he was confirmed in office by the U.S. Senate. From 1975 to 1978, Dr. Roberts served on the congressional staff where he drafted the Kemp-Roth bill and played a leading role in developing bipartisan support for a supply-side economic policy. After leaving the Treasury, he served as a consultant to the U.S. Department of Defense and the U.S. Department of Commerce.” (About Dr. Roberts)
I don’t have much faith in the bond rating business. After all didn’t they degrade the US Bonds? Yes, the same ones this country borrows money from?
This is something we need to stay out of.
randyjet – and yet many people think Putin was behind the coup and now that the Ukranians have said they are going to crush the pro-Russians who are seizing building, military stores, etc. Putin is threatening them.
Add to this that high level ‘talks’ between the US and Russia have ended. Troops from NATO are arriving in Poland. And a fun time was had by all. 😉
I don’t think most folks think Putin was behind the coup, but they think that the current government is benign towards Russian speaking citizens and that they have no right to worry. Even though one of their first acts was to make Russian illegal in government, and they say that they withdrew that “Law”, but think that they are even handed and decent folks! After a year or two goes by, then they will make Russian illegal again, and this time it will stick and they will proceed to ethnically cleanse the Ukraine if the EU and the US have their way.
I supported the idea of the US bombing Syria over the poison gas attacks Assad did, and I find it funny that this little limited strike roused such a storm of protest, yet sending US troops to this area is seen as good policy. The two situations are not the same, but now we DO have troops on the ground which will embolden the Poles who would love to kill Russians. That makes Polish nuts the dictators of US policy since we will be forced to back whatever provocation or attack they wish to do.
After WWI, Poland was created, and one of the first things they did was to attack Russia. I really think that it is dumb to give a blank check to the Poles in this matter.
While I am not a fan of Putin and would never vote for him if I had the chance, so far his actions seem to be rather reasonable in this specific situation. He is faced with the fact that an agreement that was agreed to by all parties, was simply overthrown by fascist thugs and a coup forced Yasunovych out of office by arms. I am struck by the fact that so many here slam Obama for disregarding laws that he does not like enforcing, but say nothing about a coup that they and many others are supporting. If one is dedicated to the rule of law and negotiation, the US needs to stop supporting armed thugs. I also find nothing in the 10 oligarchs who run the Ukraine that makes them better than the Russian ones.
I also remember how Hitler came to power in which the parties who supported him in the vote thought that they could control him and “moderate” his policies. Giving avowed fascists power of the police, and military is NOT the way to keep democracy or promote it. I hate to say it,, but all this warfare of economic or military means is hardly justified for the problem at hand. The EU and US diplomats should have supported Yasunovych and the agreement that they had signed on to. Trying to abrogate such agreements and use shortcuts that deny ones word and principles does not lead to good results. I am ashamed at Obama’s lack of principle on this. I can understand Kerry’s position since he is not the boss and has to tow the line, but I hope that his talents will be put to better use in negotiations to solve this problem.
In my opinion, between the Obama staff & the CIA helping to foment a coup against Ukraine they are arguably guilty of yet another crime. How many coups do they need to try? The Cuban twitter scandal, no ones prosecuted, Holder maybe the most inept AG of all time. Everything this admin does is about US govt control, be it the disgusting acts of the NSA, NDAA, assassination, bailouts, protecting war crimes, it’s a litany of crimes. With regard to Ukraine, Putin maybe a deplorable leader but has been the most rational actor in the last couple of years while the US empire plods on assisting the military coup in Egypt & breaking the law by continuing financial aid. Then there was the Syria debacle which Putin bailed out the smooth talking ignoramus Obama from starting yet another disastrous war, which would simply increase attacks against Americans who shouldn’t be in the Middle East anyway. Putin offered to help America in the aftermath of 9/11 & currently allows the supply routes in Afghan to remain open for American troops. Putin did not take over Crimea, he is defending his countries historical & present national interests. All the US is doing with the senseless antagonizing of Russia is risking the cut off of gas to Europe & Ukraine, and China and Russia banding even closer together. It’s all part and parcel with “The Grand Chessboards” absurd theory of US hegemony. These sociopaths in the Obama White House, my Isreal first PM in Canada(& puppet) the soon to be bankrupt France & EU are going to start a world war. To what defend the dollar from an imminent collapse? It’s coming anyway, there’s no denying the US Japan & EU cannot meet there financial obligations. So to defend the dollar & US supremacy these buffoons will start WWIII. It’s disgusting to watch the complete abolition of the rule of law, international law & the like since 9/11 by the US & the world continues to takes sides with this fading republic.
Just my two cents.
“sanctions would work” “military action would or would not work”…
Work for what?
this type of thinking always assumes there is a “good” side with good intentions , and that all the differences of opinions lie in the methods used to reach some unquestionably noble goals.
Why am I the only one thinking the way I do. Sometimes it drives me crazy.
But wait.
What does India have to say about this. And china? Indonesia, Pakistan, All African nations? Brazil? Mexico? Vietnam? Bangladesh?…
the smallest one of the nations i mentioned has a population that doubles that of england in size. Some have twenty times the population of france. Where is the “International community”?