#Sanctions will not rally Russians behind #Putin. The reason is that the Russian regime always needs to convey strength. So the propaganda message on Russian state TV will be: "All is good, we are in control, minor turbulences, nothing serious." [1/4]
But it will be evident to most Russians in a year or two that all is not good, not at all. At that point, propaganda becomes counterproductive: Russians will feel that their problems are not taken seriously, that the government is actually mocking them and their suffering. [2/4]
The sanctions will thus become problematic for #Putin, because they sabotage his narrative of ultimate power and control. He can either choose to look weak, having failed to protect Russia against the West - or look completely detached from economic reality. [3/4]
Looking weak is never an option, so Putin will keep telling "good fake news". At least that's what he did in past crises. This could make his life harder in the 24 election. But, then again, Russia is changing so quickly right now, not sure there even will be an election. [4/4]
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How can we reduce #Russia's energy revenue while keeping the #EU energy market stable? EU politicians are torn between popular outrage over high prices and calls to increase pressure on Russia. But there is a solution: Import price caps on Russian energy. [1/6]
#Italy has already started this discussion with regards to gas, and it is gaining momentum. Basically, a price cap makes it illegal to pay more than a price X for importing Russian gas, oil or coal. [2/6] bloomberg.com/news/articles/…
With a price cap on Russian energy, Europe ideally gets to have its cake and eat it too: #Russia's energy revenues would shrink, similar to a partial energy #embargo. At the same time, supply of energy to the #EU - and also to the rest of the world - would remain intact. [3/6]
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.