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The Biden administration’s new sanctions on Russia matter more for what they say than for their economic impact. They say that this president, unlike his predecessor, has no illusions about the challenge Russia poses — nor about the kind of strategy that will be required to confront it.
The new measures call out Russian interference in the 2016 and 2020 US presidential elections and the massive hack of SolarWinds Corp, which left thousands of computer systems exposed to Russian espionage. They target 32 entities and individuals, including previously sanctioned tycoon Yevgeny Prigozhin, and six Russian companies accused of supporting Moscow’s hacking operations. The US also expelled 10 Russian diplomats and intelligence officers, and barred US financial institutions from the primary market for official ruble-denominated debt.
The Trump administration applied some sanctions to Russia, but persistently undermined them by questioning US intelligence assessments and defending Russian President Vladimir Putin. Biden’s team isn’t equivocating. Its criticism of Russia’s behavior is extensive, detailed and specific. The White House is also threatening covert retaliation, which may do more to deter future hacks than the visible measures.
Given Russia’s behaviour, it’s fair to ask whether the sanctions go far enough. Continuing to allow purchases of Russian bonds on the secondary market, for instance, will lessen any damage to the Russian economy. For now, though, it makes sense to seek a middle ground. The sanctions allow room to stabilise the US-Russia relationship while leaving open the threat of harsher measures if needed. Biden’s offer of a bilateral summit will encourage Putin not to escalate the spat.
In any case, sanctions by themselves, however severe, can do only so much. Putin has hardened the Russian economy against outside pressure ever since the 2014 invasion of Crimea. His efforts to undermine and divide the US and its European allies are unlikely to cease. The Western democracies need to strengthen their defenses against cyber-attacks, crack down on the illicit money flows that fund the Kremlin’s activities, and support the Russians who, in growing numbers, are challenging Putin’s leadership. The US needs to have a tough conversation with Germany in particular before it completes the Nord Stream 2 pipeline that would give Russia new influence over Europe’s energy supply.
Putin won’t make any of this easy, as his recent saber-rattling along the Ukraine border makes clear. But it’s progress that the US recognises the threat and is willing to act.
—Bloomberg