Andrei Kazakevich: Russia has no considerable leverages to pressurize Western economy

ukr-online.com

Is EU ready to expand its sanctions against Russia? Will the stance of Greece or statements about Russia’s “adequate response” inhibit European plans?

Attack in Mariupol, the responsibility of which lies on the gunmen and Russia, caused indignation at West as well as a new wave of talks about the need to broaden sanctions against Russia. Instead of the conflict’s de-escalation in Ukraine activation of military uncivilized actions is taking place: attacks and murders of civilians.

The EU is declaring readiness to expand and continue sanctions against Russia for 9 months instead of six. Besides, a discussion about the possibility to switch Russia of the SWIFT system is going on. How is that possible?

Andrei Kazakevich, the director of the Institute for Policy Studies Palіtychnaya Sphera (Political Sphere), answers the questions of “EuroBelarus” Information Service.

- The attack in Mariupol caused a new discussion re expanding sanctions against Russia. Is the possibility of its expansion high?

- Recently certain political changes happened in Europe, and that changes complicate forecasting; by this I mean elections in Greece, where left radical powers won. And in general, to make serious moves too little time passed since the moment of new aggravation of situation in Ukraine. Usually European mechanism is working slowly and demands certain processing and rechecking facts, as two sides are bringing accusations against each other. So we shouldn’t expect considerable changes for the short period of time; although everything’s possible.

- The EU might consider switching Russia from the SWIFT system. How realistic are these intentions and what threat do they pose to Russia?

- It might happen, though I think there is no particular sense in this sanction. It will do minor harm for Russia, but cause bigger problems for Europe instead in terms of trust to this technology. It think this question won’t be seriously considered. To put pressure on Russia, specific spheres connected with the Russian authorities should be involved. The latest experience shows that this strategy is working.

- Sanctions against which spheres of Russian economy are most efficient?

- Oil, gas, other mineral raw materials.

- Russian PM threatened to “respond without limits” to switch-off from the SWIFT system. What was the adequate response that Russia meant?

- There is no sense to talk about “adequate response”, as by adequate Russian means symmetrical. Russia has no considerable leverages to pressurize Western economy, though certain limiting measures might be taken, such as import of European production to Russia. Additional aggressive measures at the borders of NATO countries, withdrawal from specific agreements and contracts related to security are possible, too. There are lots of scenarios, though each of them appears to worsen Russia’s situation, not pose a threat to the West.

- At the same time opponents of sanctions’ extension activated. For example, the head of the European Parliament Schulz spoke against extended sanctions; and so did the Greece. Do Athens demonstrate principal stance or they rather seek concrete economic preferences for the country from the EU?

- Greece has always tended to take pro-Russian stance: Russian business has quite strong representation in the country, civil though sympathizes with the Orthodox Church of Russia, both left and right wing radicals lay their hopes for Russia. This phenomenon might express general tendency; though, naturally, it might as well be a start of trade for revision of terms to get funding from the EU.

- EU and Western sanctions against Russia are aimed at stopping or minimizing Russian aggression in Ukraine. Did Western sanctions serve as a restricting factor or they rather strengthen the aggression?

- I believe that the Western sanctions are seriously constraining Russia; otherwise situation in Ukraine would be very different.

It would be naïve to think that sanctions would immediately leave Russian without the desire to build an empire or help separatists at Donbas. Obviously, sanctions have their effect, they influence Russian economy, part of Russian elite, and certain part of society and this effect will only grow. Nationalistic euphoria in Russia is still rather strong; however, worsening of economic situation affects interest the society has towards foreign politics.

Only a year ago with all the income from export of oil and gas and realization of large-scale infrastructural projects Russian economy was much more appealing in comparison with EU’s economic problems. Post-Soviet countries started to perceive Russia as a source of funding and certain alternative in the situation of crisis. Now everything disappeared: prices on oil declined sharply, Russian ruble devaluated twice, and GDP is expected to decline by 3-5 per cent this year. Russia’s appeal as an economic alternative to the EU and all the more to the US basically disappeared.

- Is it possible that a new Greece, where left radicals won at the parliamentary election, becomes a bone of contention in the EU itself? As we know, all decisions in the EU are made unanimously, whereas left-radical Greece can block the work of the whole union if it wants to.

- Now left radicals come to power in Greece. From the history of the EU we know that these powers have energetic rhetoric, attractive slogans, though uncertain strategy of foreign or domestic policy. Considerable part of their program is mere populism. That’s why it is hard to forecast their behaviour if they come to power.

One scenario is that they might enforce a radical line. And in this case consequences might be unpredictable, not even for Europe, but for Greece itself: it might leave Eurozone, announce about default, leave the EU, though the latter is hardly possible.

Another scenario is that the new government will have to take into account the agreements signed with the European countries by the former authorities. In this case a new round of negotiations with the EU might start, Greece might bargain for extra preferences, economic plan will be adjusted, though no principal changes will happen.