Less than 24 hours after Russia ordered the deployment of military forces into eastern Ukraine, the West has sent a clear message that Moscow’s aggression won’t go unanswered. But the harshest sanctions may be kept in reserve as a deterrent to even greater escalation.
Germany halted certification of the Nord Stream 2 pipeline on Tuesday, the most forceful move taken so far to impose economic and financial penalties on Russia since President Vladimir Putin recognized two parts of eastern Ukraine as independent and ordered his troops into the breakaway territories.
The United States, the European Union and other Western allies have also announced limited sanctions. Western countries are not likely to deploy their own troops to Ukraine, making sanctions the best tools to punish Moscow — and deter further aggression.
Here’s what the West has done so far, and how it might really hurt Russia.
The United States
President Joe Biden Tuesday laid out what he called a “first tranche” of US sanctions against Russia, including on two financial institutions, Russian sovereign debt and — starting Wednesday — on Russian elites and their family members.
The White House on Monday announced sanctions on parts of eastern Ukraine that Putin recognized as independent. But those penalties are mostly symbolic, and don’t pose much of a risk to the Russian economy.
Deputy national security adviser Jon Finer said during an appearance on MSNBC that harsher penalties are likely to be held back in order to deter Moscow from ordering troops deeper into Ukraine.
“If Russia takes further actions, we will have further significant and severe consequences that we can impose via sanctions,” Finer said.
Biden reiterated that point Tuesday, saying the United States was prepared to add sanctions if Russia further encroaches into Ukraine’s territory.
In addition to VEB and Russia’s military bank, which were sanctioned Tuesday, the United States could target more of Russia’s biggest banks with sanctions, essentially making them pariahs and cutting them off from the global financial system.
Export control measures are another powerful weapon in the US arsenal. These restrictions could halt Russia’s ability to import smartphones and key aircraft and automobile components, hobbling its manufacturing industries.
The United States maintains sanctions on Russia that were imposed in response to its invasion of Ukraine in 2014. Other penalties have been imposed over issues including cyberattacks, election meddling, weapons proliferation and illicit trade with North Korea.
Europe
The European Union will table a package of sanctions against Russia on Tuesday, including proposals to target individuals and banks. But it has already played one of its major cards against Russia.
Germany’s decision on Tuesday to halt certification of the Nord Stream 2 pipeline shows that Europe is willing to target Russia’s huge energy industry — even if that means higher natural gas prices for EU consumers.
The 750-mile pipeline was completed in September but has not yet received final certification from German regulators. Without that, natural gas cannot flow through the Baltic Sea pipeline from Russia to Germany.
Nord Stream 2 could deliver 55 billion cubic meters of gas per year. That’s more than 50% of Germany’s annual consumption and could be worth as much as $15 billion to Gazprom, the Russian state owned company that controls the pipeline.
“I salute the decision of the German chancellor, Olaf Scholz, to cancel Nord Stream 2. And I think it’s a brave step … and the right thing to do,” Prime Minister Boris Johnson told UK lawmakers on Tuesday.
