Punishing Putin: the oligarchs feel the pain

Russians used to laugh off Western sanctions, said Eric Levitz in New York Magazine. Not any more. The latest US measures introduced to punish Vladimir Putin’s “malign activity” have targeted 17 Russian officials and seven of his oligarch cronies. They include Andrey Kostin, head of Russia’s second-largest bank, VTB, and Alexei Miller, boss of statecontrolled gas giant, Gazprom – both key members of Putin’s team. And the effect has been profound – a sharp fall in the rouble and a share price collapse in some of Russia’s biggest companies. Rusal, the giant aluminium firm, has lost half of its value. For all Donald Trump’s bizarrely pro-putin rhetoric, his administration seems ready to destroy Russian firms “in the blink of an eye” – Americans are forbidden from doing business with those on the list; sanctions are threatened against foreign firms and banks that do. Effectively isolated, as it was in the 1920s after the revolution, Russia is being forced to go it alone. This is the result of Putin’s tactical successes – “a comprehensive strategic defeat”.

Further US sanctions planned in response to the Syrian chemical attack have been put on hold, said Anastasia Vlasova in Moskovsky Komsomolets (Moscow). But officials are preparing for the worst – being cut off from the Swift international payments mechanism and a ban on doing business with Russian banks.

The government can’t go on bailing out companies hit by sanctions, said Pavel Aptekar in Vedomosti (Moscow). It has already drained more than £74bn in reserves; there’s only £43bn left. And having friends in high places won’t help the oligarchs this time – priority must be given to big employers in single-industry towns, to avoid a devastating effect on local economies. However, the last thing we should do is resort to counter-sanctions: they’d hurt ordinary Russians far more than the US. Yet amazingly, that’s just what is being planned, said Gazeta (Moscow). A new draft law would block virtually all trade with the US, prohibiting raw materials, food, medicines and technological equipment. It’s hard to think of anything more counterproductive. For example, Boeing may be inconvenienced by being unable to buy Russian titanium, but if the US then blocks the supply of spare parts it would as good as ground the Russian passenger fleet. The same goes for the proposed ban on Western medicines, said Markus Ackeret in Neue Zürcher Zeitung (Zurich): Russian equivalents are so inferior it would leave sick Russians “curing themselves with tree bark”. Alas, in the list of Putin’s priorities, the people’s welfare ranks well below the need to “defend Russia’s greatness”.