Saving energy now is an EU no-brainer 28 Jun 2022 The bloc has hiked LNG imports by 50% to replenish storages and cut its Russian gas dependency. But if Moscow turns off the taps, Germany could sink into recession. All the more reason to kick off energy-saving measures this summer and try to curb gas prices by cutting demand.
Enforcement is weak link in Russian sanctions push 28 Jun 2022 Western capitals have frozen assets and blacklisted oligarchs. The United States has many well-funded financial crimes regulators, but there’s little formal coordination with poorer European counterparts in policing breaches. Places like Dubai offer hiding places, too.
Russia’s economy will soon be unrecognisable 16 Jun 2022 When the Ukraine war eventually subsides, Moscow will try to tempt companies and investors back. But its $1.5 trln GDP will have changed dramatically, with poorer consumers and more basic modes of production. Returnees will find a very different economic beast.
Aeroflot’s travails are metaphor for Russia 9 Jun 2022 Sanctions have curtailed the state-run carrier’s routes and grounded its jets. Moscow will underpin a $3 bln rights issue by raiding its rainy-day fund. As its economic isolation deepens, more oil dollars will have to be diverted to struggling domestic enterprises.
Europe’s energy subsidies help Putin and pollution 8 Jun 2022 EU leaders are trying to cushion the blow of rocketing energy bills. But keeping a lid on gas prices encourages consumption, which enriches Russia and hinders decarbonisation. Better focus public support on poorer households, and push harder on energy efficiency.
Oil embargo will hurt Putin more than EU 31 May 2022 Europe will halt 75% of Russian crude imports now and 90% by year end. Replacing the lost fuel will hike EU consumers’ red-hot energy bills. Moscow can sell oil elsewhere but may still lose more than a third of its most lucrative export revenue source, hurting its war machine.
How sanctions against Russia could backfire 26 May 2022 The threat of financial punishment did not prevent President Vladimir Putin from invading Ukraine. History shows that economic penalties can stoke conflict by pushing countries to be more self-sufficient, Edward Chancellor writes. Investors risk being stuck with stranded assets.
Seizing oligarch assets is a slippery slope 26 May 2022 The EU hopes to confiscate $31 bln of yachts and villas from blacklisted billionaires. Washington is mulling similar steps. However wrong Russia’s invasion of Ukraine may be, short-circuiting the criminal process to seize property risks weakening trust in Western rule of law.
U.S. sanctions give Russia default it doesn’t need 25 May 2022 The Treasury won’t let Moscow pay U.S. bondholders, tipping it into default. The move further isolates Vladimir Putin but will have minimal impact. It’s a surreal twist given Russia can still pay its debts, while battlefield foe Ukraine urgently needs relief but isn’t getting it.
Russia fossil fuel embargo has an inexorable logic 25 May 2022 Western allies are discussing buyer-imposed caps or tariffs to shrink Russia’s oil and gas revenues. But the measures would keep money flowing to Moscow, and could trigger the abrupt end of Russian imports they are meant to delay. Better to jump straight to an embargo now.
EU funds can ease, not end common energy pain 18 May 2022 Brussels has earmarked 300 bln euros to cut fossil fuel ties with Russia. Rising rates make cheap, repurposed Covid-rescue loans more attractive to many EU states, increasing the chance they’ll be used. But higher fuel purchases will still have to come from national budgets.
Using Russian assets in Ukraine would be a mistake 17 May 2022 Seizing $200 bln of central bank reserves frozen by the EU and U.S. could provide financial relief and moral comfort to the war-torn country. But it would also trigger legal fights and give Russia even less reason to back down. Confiscation is no substitute for a realistic plan.
Western companies have 50 bad ways to leave Russia 16 May 2022 Multinationals can sell out like McDonald’s, shut down like Zara owner Inditex or shrink operations like Nestlé. Hopes of finding a Chinese or Indian buyer may prompt some to drag their heels. But the threat of forced nationalisation gives others an incentive to hurry.
Renault’s Russia exit plans mix logic and delusion 10 May 2022 The French carmaker could sell its Russian assets for a symbolic euro with a plan to buy them back at a later date. Its hope for a “return to normal” after the war in Ukraine sounds optimistic, if not delusional. But for now, Renault sheds a burden and avoids the Kremlin’s ire.
Europe may swap one energy dependency for another 9 May 2022 The bloc is ramping up investment in renewable sources to help kick its addiction to Russian oil and gas. Yet China currently controls at least 75% of the solar panel supply chain. To gain its energy freedom, Europe will also need to invest in manufacturing at home.
EU’s oil embargo is slave to volatile crude price 4 May 2022 The bloc wants to stop buying Russian exports within six months. That looks too slow to properly choke off funding for President Vladimir Putin’s war machine. Yet going any faster could make crude prices spike, exacerbating Europe’s battle against inflation.
Russian nickel king laughs all the way to the bank 3 May 2022 Vladimir Potanin has snapped up his third financial asset since the war began. The Norilsk Nickel CEO has so far evaded U.S. sanctions despite links to President Putin. Dozens of Russian billionaires are in similar boats, poised to make out like bandits from the Western exodus.
Russia plays the fool in its own default theatre 3 May 2022 Moscow looks set to meet foreign currency bond payments, after saying a month ago it could only pay in roubles. High oil and gas prices mean it has ample revenue to meet its obligations. But the debt grandstanding may not yet be over, notably if the EU imposes an energy embargo.
Africa is imperfect solution to Europe’s gas woes 28 Apr 2022 The continent’s vast reserves and growing liquefied gas supplies can cut some of the bloc’s energy dependence on Russia. Yet lack of infrastructure, domestic needs and rigid contracts limit Africa’s ability to boost exports quickly. Political instability is a further headache.
Putin’s gas shock is acid test of EU unity 27 Apr 2022 In severing Polish and Bulgarian supply, the Russian leader shattered a fragile equilibrium that had seen European energy buyers fund his war. He hopes other EU states will carry on, dividing the bloc. Instead, Europe should backstop the costly process of ditching Moscow’s fuel.