No Aims, No Plan, No Success

February 1, 2023 –
From Transform Europe

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Targeting war spending is also problematic for another reason: even if Russia’s budgetary revenues were to collapse, it is uncertain whether the Kremlin would allocate less money to the war or not. It is much more likely that spending on other budgetary items would be cut first, such as in the social sector or on pensions. The war budget would likely only be impacted if cuts to social services were so significant that the Kremlin was threatened with public unrest. Unfortunately, we are miles away from this scenario at the moment.

Thus, there is no single, realistic, concrete aim in the EU sanctions resolutions that targets political change in Russia. As in so many other cases, then, the EU sanctions should primarily be understood as demonstrative — an official record of the EU’s own conviction and a domestic political signal that “we are doing something”. The standard reference work on the effects of economic sanctions, Economic Sanctions Reconsidered by Gary Hufbauer, Jeffrey Schott, and Kimberley Ann Elliot calls such sanctions “expressive rather than instrumental”.

National interests Trump international solidarity

The EU sanctions are not only short on aims — they are also short on a plan. That is because national economic interests more than anything ultimately determine the EU’s decision-making on specific sanctions. Let us examine two concrete examples among many.

As of December 2022, 1,241 Russian individuals were on the EU’s sanction list. Notably absent, however, was Vladimir Potanin, despite the fact that he is the second-richest man in Russia and has been a loyal Putin supporter for 20 years, even playing ice hockey with the Russian president on occasion. Potanin should have been on the list in the very first round of sanctions.

The reason why he has thus far been spared is relatively simple: he controls Russian production of nickel and other important metals and built a major battery plant in Finland together with BASF. The fears of the multinational chemical company and several Western European car manufacturers that Potanin might refuse to replenish supplies of key metals were evidently too great — and they still are. The US finally added Potanin to its sanctions list on 15 December 2022 (!), but he remains a welcome guest in the EU. This is what happens when your own car is more important to you than your neighbour’s life.

The second example is a brilliant one. Antwerp is the diamond capital of the world and enjoys 36 billion US dollars per year in turnover from the precious stones. It is a major industry, which is why the Belgian government still refuses to allow Russian diamonds to be placed on the sanctions list. So far, they have succeeded. At the same time, diamond mining in Russia is partially state-owned, meaning that the profits flow directly into the Kremlin’s war chest.

There are plenty of similar examples showing that domestic (often national) economic interests are more important than solidarity with the people of Ukraine. Ultimately, this has led to a patchwork of poorly targeted sanctions.

As the crowning achievement of its haphazard approach, the EU inches forward in tiny steps with all its sanctions. Every sanction is publicly discussed at length before being enforced and comes with a long transition period, so that, as a rule, the Russian economy has several months to prepare for its introduction.

What’s more, there is a clear, distinct lesson to be learned from experience with other sanctioned regimes: sanctions can only be successful if they are imposed quickly and harshly, thus producing the maximum possible effect on the target country’s economy. Baby steps achieve nothing.

What should we do? What has been missing, at least since 24 February 2022, is an honest debate about which sanction aims could be meaningful and how they could be achieved.

Stopping the Russian war machine would certainly be a worthwhile aim. This would include sanctioning all dual-use goods, in other words things that can be used for both military and civilian purposes. So far, only a few specific dual-use goods (such as drones) have been covered by sanctions

There are two unanswered questions that the Left should finally get around to discussing: what would be the side effects — including for the poorer elements of the Russian population — of a total ban on all dual-use goods? And would such a ban be at all effective in limiting Russia’s ability to wage war?

At the same time, we also need a discussion on the conditions under which the sanctions could be lifted. This is another clear insight gained from analyzing previously sanctioned regimes: success is only possible when the target country knows exactly what it must do in order for sanctions to be lifted.

The Party Executive Committee of Die Linke recently made an interesting proposal in this regard. Russia should receive a guarantee “that all EU sanctions introduced after 24 February 2022 will be lifted the moment the Russian military withdraws to its positions of 23 February, thus complying with the UN resolutions.” This is a very concrete proposal with a concrete link to Russian aggression from 24 February onwards. The issue of Crimea and related sanctions is excluded for the time being.

The only way that sanctions can have any prospect of success is by formulating clear aims, targeting these aims with focused sanctions, and explicitly communicating to the target country when and how those sanctions will be lifted. Unfortunately, the current EU sanctions fail to deliver on all of these counts.

Originally published on the website of the .

Source: Transform-network.net