Thread by @jakluge

Thread: The latest round of sanctions is very tough. Taken together, the #sanctions of the last days will almost certainly cause a deep economic crisis in Russia. It will take a few days or weeks to unfold, so let's hope it will not be too late. ec.europa.eu/commission/pre…

Paralyzing #Russia's Central Bank reserves is a smart move that will make it much harder for Russia to absorb the shock of the other sanctions. Remember: Reserves, gold etc. are no protection against this caliber of sanctions, they help only in less severe situations.

SWIFT: selected banks makes sense at this point. Gas/oil will be exempt for now, but: It doesn't change the picture as much as one might think. In a year, Russia makes 100s of billions from oil/gas, but in the next days, revenue will be negligible compared to the sanctions pain.

So the current measures focus on things that inflict an immediate economic shock, which is the best way to go. But there could be more blocking sanctions against large banks. This should follow ASAP.

Another very good thing about the sanctions package: The transatlantic taskforce for enforcement. This has been lacking for a long time, and enforcement has left much to be desired. This joint effort will massively improve policing, especially in the EU.

There are more measures that can be implemented in the next months and won't affect the outcome of this war, but free the EU from dependencies. Oil: Preparations for a partial embargo against Russia should be started. Gas: An EU emergency plan for next Winter is urgently needed.

Russia will try to counter with its own measures. Because Russia's economy is small, whatever Russia does economically, the blowback is very strong. The exception are key resources (metals) on which Moscow will probably introduce export bans, and gas maybe, but to me less likely.

Overall there is much less choice for Moscow, and the countermeasures will most likely be "asymmetric". This means that Moscow will do things that don't necessarily hurt us economically, like banning all Western institutions, journalists etc. from Russia.

Finally, China will not be of great help for Russia. I am certain that Beijing will use the opportunity to buy some cheap Russian assets, but overall Chinese companies will stick to the Western restrictions, and sanctions will also severely hurt China-Russia trade.