New sanctions are driving Russians to drink

An expanded menu of punitive measures is already having some effect on Moscow

Topics: GlobalPost, Russia, vodka, Alcohol, Putin, Vladimir Putin, Sanctions, ,

This article originally appeared on GlobalPost.

Global Post Russians have a new reason to hoist a glass these days: According to a popular Russian post on Twitter, the toast du jour is “To US sanctions!”

It’s not clear whether the imbibing is due to joy or despair, but the latest round of punitive measures against Russia announced by President Barack Obama on Thursday packs a wallop.

The new sanctions add 20 individuals and one bank to the 11 already on a US blacklist. The people face travel bans and asset freezes. The bank will be unable to do business with any US firms or individuals.

The measures target President Vladimir Putin’s inner circle, with the threat of more to come. Obama indicated he’s prepared to target key sectors of the Russian economy in retaliation for Russia’s annexation of Crimea, which Putin signed into law Friday.

“Russia must know that further escalation will only isolate it further from the international community,” the US president said.

The new sanctions certainly increase the tension between Moscow and Washington; it’s not yet clear whether they will do anything to move Russia out of Crimea or curb the Kremlin’s expansionist ambitions.

But the market is already reacting: Standard & Poor’s and Fitch credit rating agencies promptly downgraded the outlook for Russian sovereign debt from stable to negative, and Russian stock indexes plummeted in early trading on Friday.

Russian news agency RIA Novosti reported on Friday that Visa and MasterCard have stopped processing transactions for cardholders at certain Russian banks, including Bank Rossiya, the institution named in the US sanctions list.

Moscow responded swiftly, imposing corresponding sanctions on nine US officials, including Arizona Sen. John McCain, Senate Majority Leader Harry Reid and Speaker of the House John Boehner.

The Russian measure was greeted with humor by some.

“I guess this means my spring break in Siberia is off,” McCain said in a statement Thursday. “My Gazprom stock is lost, and my secret bank account in Moscow is frozen. Nonetheless, I will never cease my efforts on behalf of the freedom, independence, and territorial integrity of Ukraine, including Crimea.”

But Moscow isn’t laughing. Russia’s Foreign Ministry released a strongly worded statement saying that it was prepared to retaliate tit for tat.

“We have warned on numerous occasions that sanctions are a double-edged sword, and would come back like a boomerang to hit the United States,” read a statement released on the Foreign Ministry’s website. “Using this kind of language to speak with us is inappropriate and counterproductive, as those in Washington have had ample opportunity to observe.”

The United States does not do a great deal of trade with Russia — just $11 billion in exports and $27 billion in imports in 2013, which leaves Russia outside America’s top 20 list of trading partners.

Still, the portfolio of US companies with business interest there includes many of the world’s biggest corporations, which are watching the punitive actions closely. Some of them are lobbying for Washington to take a circumspect approach and avoid whacking too hard against what they consider the economic drivers that are modernizing Russia, the Financial Timesreported. Until Thursday’s sanctions, however, critics had been prodding the Obama administration, saying the US approach wasn’t tough enough.

You Might Also Like

Europe’s economy, meanwhile, is more closely entwined with Russia’s.

Countries such as Germany and Italy are highly dependent on Russian gas, getting more 30 percent of their supply from Moscow. London banks hold vast amounts of Russian assets — up to $400 billion, according to some estimates. France has a more than $1 billion deal to sell warships to the Russian fleet.

That might explain why the EU is proceeding cautiously. At a summit meeting on Thursday, EU leaders said they would add 12 individuals to their original list of 21 Russians to be sanctioned, but as yet have released no names.

Moscow has some arrows in its quiver that are not specifically economic. It’s been cooperating with the US and allies on issues such as negotiations over Iran’s nuclear program and the destruction of Syria’s chemical weapons stocks.

On Wednesday a top Russian diplomat threatened that Russia could change its stance on Iran if the standoff over Crimea continued.

Moscow and Washington are colleagues in the six-nation coalition in Vienna, known as P5+1, that’s trying to rein in Iran’s nuclear ambitions. If it so chooses, Russia could easily put roadblocks in the way. It could, for example, engage in an oil-for-goods barter deal with Tehran, undercutting the effects of US sanctions that many credit with getting Tehran to the negotiating table.

More from GlobalPost: As the Kremlin celebrates, Russia’s liberals wallow

Speaking to the Interfax news agency, Russia’s Deputy Foreign Minister Sergei Ryabkov said Moscow was prepared to up the ante.

“We wouldn’t like to take advantage of these negotiations [between the P5+1 group and Iran] as an element of gambling with a higher ante considering attitudes in some European capitals, Brussels and Washington,” he said. “But if we are forced to do so, we will take retaliatory measures as well.”

Russian dissident Alexei Navalny is pressing the Obama administration to get tougher with Moscow. A candidate for Moscow mayor last fall, he garnered more than a quarter of the vote, but he’s currently under house arrest and his blog has been blocked in Russia.

On Wednesday The New York Times published an op-ed piece by Navalny advising the Obama administration on “how to punish Putin.”

Navalny recommends Washington widen its scope to target “the Kremlin mafia who pillage the nation’s wealth.”

He goes on to name nine individuals. Five of those ended up on the Treasury Department’s sanctions list the next day.

The four who didn’t make the list include the heads of Russia’s oil and gas industries, and two oligarchs — businessmen who made quick fortunes in the massive grabathon that followed the collapse of the Soviet Union.

While Obama has not ruled out measures against Russia’s energy sector, it would be a significant step to blacklist Igor Sechin, CEO of state oil company Rosneft, and Aleksei Miller, who runs the state-owned natural gas monopoly Gazprom, as Navalny suggests. The ripple effects could be severe, something that Obama acknowledged in his speech Thursday morning.

If the US was forced to target key sectors of the Russian economy, he said, “these sanctions would not only have a significant impact on the Russian economy, but could also be disruptive to the global economy.”

As for the oligarchs: Roman Abramovich is the owner of the UK’s Chelsea Football Club, while Alisher Usmanov is the second largest shareholder in Arsenal, another popular soccer team. Trying to mess with British football hooligans might give even the leader of the free world pause.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 13
  • Close
  • Fullscreen
  • Thumbnails

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    Young Daya has yet to become entirely jaded, but she has the character's trademark skeptical pout down pat. And with a piece-of-work mother like Aleida -- who oscillates between jealousy and scorn for her creatively gifted daughter, chucking out the artwork she brings home from summer camp -- who can blame her?

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    With her marriage to prison penpal Vince Muccio, Lorna finally got to wear the white veil she has fantasized about since childhood (even if it was made of toilet paper).

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    Cindy's embrace of Judaism makes sense when we see her childhood, lived under the fist of a terrifying father who preached a fire-and-brimstone version of Christianity. As she put it: "I was raised in a church where I was told to believe and pray. And if I was bad, I’d go to hell."

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    Joey Caputo has always tried to be a good guy, whether it's offering to fight a disabled wrestler at a high school wrestling event or giving up his musical ambitions to raise another man's child. But trying to be a nice guy never exactly worked out for him -- which might explain why he decides to take the selfish route in the Season 3 finale.

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    In one of the season's more moving flashbacks, we see a young Boo -- who rejected the traditional trappings of femininity from a young age -- clashing with her mother over what to wear. Later, she makes the decision not to visit her mother on her deathbed if it means pretending to be something she's not. As she puts it, "I refuse to be invisible, Daddy. Not for you, not for Mom, not for anybody.”

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    We still don't know what landed Brooke Soso in the slammer, but a late-season flashback suggests that some seriously overbearing parenting may have been the impetus for her downward spiral.

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    We already know a little about Poussey's relationship with her military father, but this season we saw a softer side of the spunky fan-favorite, who still pines for the loving mom that she lost too young.

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    Pennsatucky had something of a redemption arc this season, and glimpses of her childhood only serve to increase viewer sympathy for the character, whose mother forced her to chug Mountain Dew outside the Social Security Administration office and stripped her of her sexual agency before she was even old enough to comprehend it.

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    This season, we got an intense look at the teenage life of one of Litchfield's most isolated and underexplored inmates. Rebuffed and scorned by her suitor at an arranged marriage, the young Chinese immigrant stored up a grudge, and ultimately exacted a merciless revenge.

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    It's difficult to sympathize with the racist, misogynist CO Sam Healy, but the snippets we get of his childhood -- raised by a mentally ill mother, vomited on by a homeless man he mistakes for Jesus when he runs to the church for help -- certainly help us understand him better.

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    This season, we learned a lot about one of Litchfield's biggest enigmas, as we saw the roots of Norma's silence (a childhood stutter) and the reason for her incarceration (killing the oppressive cult leader she followed for decades).

    The 12 most incredible pint-size look-alikes in "Orange Is the New Black" season 3

    While Nicki's mother certainly isn't entirely to blame for her daughter's struggles with addiction, an early childhood flashback -- of an adorable young Nicki being rebuffed on Mother's Day -- certainly helps us understand the roots of Nicki's scarred psyche.

  • Recent Slide Shows


Loading Comments...