In response to the recent Russian invasion of Crimea, President Obama extended sanctions against Russia. The initial sanctions include blacklisting several wealthy businessmen who are close to President Putin and one of the country’s major banks. President Obama’s plan is to place economic pressure on the invading country. The targeted sanctions are unprecedented as this type of action wasn’t even done during the cold war. The following is a run down of the major factors and their repercussions.
The United States has placed sanctions against President Putin’s chief of staff, Sergei B. Ivanov, and billionaire investor Gennady N. Timchenko because he is linked to Russia’s president. In addition, America has sanctions against Yuri V. Kovalchuk who is a personal banker for several of Russia’s leaders. The European Union, or EU, has also imposed limited sanctions against Russia.
President Obama has cleared the way to enact tougher measures against the most successful sections of Russia’s economy, which include its oil and natural gas exports. President Obama did confirm that the sanctions could upset the world economy, but the action may be necessary to dissuade Russia from continuing its occupation of Ukraine.
Italy, Spain and France have warned the United States about enacting strict sanctions against Russia because of the potential impact to the global economy. However, Germany’s Chancellor reported that her country would manage without the energy sources that Russia provides to support the sanctions.
Russia’s invasion into Ukraine has caused officials like the European Union foreign policy leader, Catherine Ashton, to express concern regarding the precarious position of Ukraine’s economy. Currently, Ukraine’s government officials are reporting that the country is in desperate need of funds to cover gas imports and avoid a debt default. The United States is considering a $1 billion loan to Ukraine while the EU has agreed to loan the country $15 billion to assist its economy.
