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Will more severe sanctions work?

Penalties will be harder for Russia to shrug off

By The Mercury

The United States and the European Union, which in recent weeks levied sanctions on Russia that had more symbolism than impact, on Tuesday imposed sanctions that are worthy of the name.

Long threatened, the sanctions target Russia’s state-owned banks, oil companies and weapons makers as well as more of Russian President Vladimir Putin’s close associates.

Their purpose is simple: to persuade President Putin to stop arming and otherwise supporting pro-Russian separatists who are at war with Ukraine and to instead support a process that recognizes Petro Poroshenko as Ukraine’s lawful president. Among other things, the new sanctions will limit Russia’s state-owned banks’ access to European capital markets and halt or at least slow the export of oil-related equipment to Russia.

Whether the sanctions will work is another matter, and could depend on whether European nations are determined enough to force President Putin’s hand that they’ll absorb some economic losses themselves. Much has been made of Europe’s dependence on Russia’s oil and gas supplies, but the sanctions could affect other trade as well. The EU had been reluctant to approve sanctions, which President Barack Obama on July 6 said the United States was imposing. Yet the EU began to come around after the shooting down of the Malaysian airliner over eastern Ukraine and the subsequent actions of Russia and the separatists.

Russia has said little officially about these sanctions, though the New York Times reports that Russian business leaders and even some citizens have begun to second-guess President Putin’s policies and lament Russia’s involvement in the shooting down of the airliner. Overall, President Putin remains immensely popular, the Times reports, and a majority of Russians doubt the sanctions will have much effect on them.

Yet some observers suggest that President Putin has overreached, and note that Russia today is more interconnected with trading partners than the former Soviet Union was. “They were not anticipating the West to make radical moves, costly moves,” Nikolai Petrov, an independent political analyst, told the Times. “What is happening is different from what they wanted and what they expected.”

If he is correct — and sanctions are effective enough for President Putin, who fosters his combative image, to look for a graceful way out of a situation largely of his own making — that would be the desired outcome.

It’s also possible, however, that President Putin will become even more aggressive. That would only escalate tensions and further isolate Russia from many of its closest neighbors and trading partners.

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