A Sanctions Update with Eddie Fishman and Sergey Aleksashenko
Jun 27, 2024
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Sanctions expert Eddie Fishman and economist Sergey Aleksashenko discuss the impact of US Treasury sanctions on Russia's war machine, strategies to undermine Kremlin's oil revenues, recent reshuffling in Russian elites, G7's proposal on leveraging Russian bank reserves for Ukraine, and using Russian central bank reserves to support Ukraine.
Sanctions aim to disrupt Russian financial transactions, leading to de-risking by global banks.
Targeting Russian oil sales through financial sanctions poses challenges in impacting profits effectively.
Deep dives
Economic Impact of Sanctions against Russia
The recent podcast episode delves into the economic impact of Western sanctions on Russia, particularly focusing on the effectiveness of the measures in pressuring the Russian economy. Discussing the escalation of sanctions and the implications of the latest US Treasury announcement, the episode highlights the increased risks for foreign firms aiding Russia's war efforts. By targeting a broader range of Russian entities, including major banks, the sanctions aim to disrupt financial transactions with Russia, potentially leading to significant de-risking by global banks.
Challenges in Enforcing Oil-related Sanctions
The podcast addresses the challenges of imposing sanctions on Russian oil revenues. Different strategies to target Russian oil sales, either by restricting volume or revenues, are explored with a focus on leveraging financial sanctions to impact Russia's oil trade. The conversation revolves around the feasibility and practicality of implementing such measures, emphasizing the need for long-term strategic thinking and political will to effectively undermine Russia's oil profits.
Appointment of Economists in Top Defense Roles
The episode discusses the unconventional appointment of economists like Belousov to top defense positions within the Russian government. The decision is analyzed with respect to its potential impact on rationalizing and streamlining the military industrial complex, focusing on the economic aspects of defense strategy. By appointing technocrats to key roles, the Kremlin shows a shift towards a full-fledged war economy, underscoring the significance of economic considerations in ongoing military operations.
Utilization of Frozen Russian Central Bank Reserves
The podcast delves into the recent proposal by the G7 to leverage frozen Russian central bank reserves to support Ukraine. Contrary to misconceptions, the proposal does not involve confiscating the reserves themselves but rather aims to use the interest earnings on those funds. The discussion highlights the breakthrough nature of this approach, providing significant financial support to Ukraine without requiring direct taxpayer funding or extensive political approvals, potentially offering a sustainable solution to bolster Ukraine amidst ongoing tensions.
Maria recently sat down with sanctions expert Eddie Fishman and economist Sergey Aleksashenko to provide a timely update on the evolving sanctions regime leveled against Russia. (Recorded on June 18, 2024.)
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