jueves, 1 de mayo de 2014

U.S., E.U. SANCTIONS ON RUSSIANS AMID UKRAINE CRISIS HAVE LITTLE IMPACT ON THE GROUND.



U.S., E.U. SANCTIONS ON RUSSIANS AMID UKRAINE CRISIS HAVE LITTLE IMPACT ON THE GROUND. 

                “No one will stop buying oil or gas because of these sanctions”

   Russia declines started before any sanctions were announced.
  Targeted officials receiving rewards for their black-list status


By Michael Birnbaum.
[Here only extracts]

MOSCOW — The sanctions on Russian President Vladimir Putin’s inner circle were supposed to roll back the chaos besetting eastern Ukraine. But here in Russia’s blossoming capital, such a retreat is nowhere to be seen.

Some targets of the sanctions are sitting down for softball interviews on Kremlin-controlled TV channels. Moscow’s stock market rebounded Tuesday for the second day in a row after the latest round of sanctions turned out to be weaker than expected. Chaos is spiraling in eastern Ukraine, where pro-Russian separatists stormed a regional government building in the roiling city of Luhansk on Tuesday. And tens of thousands of Russian troops remain arrayed on Ukraine’s border.

Russian officials have acknowledged that the sanctions will affect the economy, particularly the technology and defense sectors. But some of the targets have rolled their eyes, saying the United States and Europe are only inflicting wounds on themselves.

Obama administration officials say that Putin may be hesitant about a full-blown invasion of eastern Ukraine because of the threat of wide-ranging freezes targeting the banking and energy sectors, which would wreak havoc on Russia’s economy.

“We believe that [sanctions] can affect Russia’s calculus over time,” a senior administration official told reporters in a background conference call this week. The Moscow stock market is down 13.2 percent for the year, and the ruble is down 7.6 percent against the dollar — but those declines started before any sanctions were announced.

In Moscow, life continues largely as before….  Ahead of a long holiday that begins May 1 and for many Russians will extend until after Victory Day on May 9, news channels have given as much weight to packed tourist flights heading to the newly Russian-controlled Crimea — an autonomous Ukrainian region until last month — as they have to the sanctions.

Russians “are not really feeling those sanctions…  Instead, Russian officials have said that pressure from the sanctions would come at a more leisurely pace.

“The gravity of these measures is absolutely obvious to us,” Russian Deputy Foreign Minister Sergei Ryabkov said Tuesday in an interview with Gazeta.ru, a news Web site. He said they were a “revival” of a Cold War sanctions regime in which “countries of the West effectively dropped the Iron Curtain on deliveries of high-technology products to the Soviet Union.”

Some targeted officials, meanwhile, appear to be receiving rewards for their black-list status. Gennady Timchenko, who sold his stake in the Swiss-based oil trader Gunvor last month hours before being hit by U.S. sanctions, was appointed head of the Russian half of the Russian-Chinese Business Council on Tuesday, the Izvestia newspaper reported.

Administration officials must also contend with the risk that sanctions that hurt the Russian economy will also affect those of Europe and the United States, yet another limit on the speed and power of the effort. The Monday listing of Igor Sechin, the head of oil giant Rosneft, will complicate his company’s business relationship with Exxon Mobil, which is exploring the Arctic region with the Russian company.

But sanctions targeting individuals rather than industry sectors are unlikely to have a big effect on behavior, said Kirill Rogov, a senior researcher at the Gaidar Institute for Economic Policy in Moscow. “No one will stop buying oil or gas because of these sanctions” he said.

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