This Week In The Economy: Economic Fears & Europe’s Energy Weak Spot Impede More Aggressive Sanctions On Russia
Welcome to a regular snapshot-review of U.S. and international economic news that aims to 1) provide a window into the challenges and decisions facing businesses today, 2) determine the direction of economic policy — such as the speed at which central banks decide to raise interest rates, and 3) assess what the impact will be for consumers.
Economic Priorities Outweigh Punishing Russia For Ukraine Invasion
This week we are going to forgo the usual recap of key economic data and central bank news to focus on the war in Eastern Europe, as Russia’s long-predicted invasion of Ukraine continues.
As missiles bombard Ukrainian cities — indiscriminately hitting civilian and military targets — and the Russian army marches ominously towards the capital Kyiv, the West’s response to Vladimir Putin’s manufactured war remains tepid at best and, honestly, self-serving.
What Sanctions Have Been Imposed
In a joint effort to present a united front and communicate universal displeasure regarding Russia’s actions, Canada, the European Union, United Kingdom, United States, and Japan announced punitive actions intended to collectively inflict pain on key areas of the Russia economy, its military apparatus, and supporters of Putin.
The U.S. government cut off Russia’s two largest banks — which combined make up more than half of the total banking system in Russia by asset value — from processing payments through the U.S. financial system (basically they can no longer transact in U.S. dollars).
It also banned thirteen of the most critical major Russian enterprises and entities from raising money in U.S. capital markets, the export of exports to Russia of items containing certain U.S.-origin software, technology, or equipment to targeted military end users, and additional sanctions on Belarus for its support of Russia’s…