What do today's first wave of US sanctions mean? A short 🧵 ...
(1) The US imposed full-blocking sanctions on VEB, the fifth-largest Russian financial institution. VEB serves as a policy instrument of the Russian state. Why does this matter? It's the first time the US has used its toughest sanctions tool on a major state-owned Russian bank.
(2) The use of full-blocking sanctions against VEB represents a step change from where we were in 2014. What does it signal? That the Biden administration is prepared to use this tool against other state-owned Russian banks, including even larger ones, if conditions warrant it.
(3) Today's action was remarkably well coordinated with the EU. To many observers' surprise, the EU roughly matched the US actions, including imposing sanctions on Russian sovereign debt. The message to Putin? The US and EU are much better aligned than skeptics have claimed.
(4) There's A LOT the US kept in reserve, including the sweeping technology export controls that it has previewed. My understanding is the US has gotten many others, including in Europe and Asia, on board as well. Expect these to roll out soon if Russia continues to escalate.
(5) If Putin intensifies aggression, I expect today's action is just the tip of the iceberg. It signals what's to come (more sanctions on bigger Russian banks) & demonstrates impressive unity between the US & EU. Here's hoping Russia backs down and no more sanctions are needed.
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