Putin is finding new ways to circumvent sanctions, while EU debate on 🇷🇺 energy ban is stuck
It's totally unsustainable
In a @ProSyn piece w @MSchularick we propose a way to break the deadlock -
forward guidance on sanctions: 1/7
project-syndicate.org/commentary/gra…
It's totally unsustainable
In a @ProSyn piece w @MSchularick we propose a way to break the deadlock -
forward guidance on sanctions: 1/7
project-syndicate.org/commentary/gra…
In recent days, the ruble stabilized and then appreciated sharply.
RU govt bond yields have fallen back.
The consensus forecast for Russia GDP growth in 2022 stands at -8% – a sharp contraction, but hardly a collapse.
It's blatantly obvious we have not done enough. 2/7
RU govt bond yields have fallen back.
The consensus forecast for Russia GDP growth in 2022 stands at -8% – a sharp contraction, but hardly a collapse.
It's blatantly obvious we have not done enough. 2/7
Indeed, high energy prices mean we are sending HUGE sums of money to Russia.
Estimate for gas alone: 3/7
Estimate for gas alone: 3/7
The debate on energy ban is stuck. This is v bad because:
1. it shows Putin he holds real power over Europe, emboldening him
2. it's delaying the inevitable and increasing the vulnerability to Putin's blackmail
3. it raises the overall expected costs of containment for EU 4/7
1. it shows Putin he holds real power over Europe, emboldening him
2. it's delaying the inevitable and increasing the vulnerability to Putin's blackmail
3. it raises the overall expected costs of containment for EU 4/7
To move things forward we propose a preannounced embargo schedule, implemented over a period of, say, six weeks, e.g.
week 1: refined oil products, other than diesel
week 2: coal
week 3: diesel
week 4: seaborne crude oil
week 5: pipeline oil
week 6: escrow gas payments
5/7
week 1: refined oil products, other than diesel
week 2: coal
week 3: diesel
week 4: seaborne crude oil
week 5: pipeline oil
week 6: escrow gas payments
5/7
This kind of policy comes with some highly desirable effects.
First, it increases pressure on Putin. Ratcheting stops when he stops bombing children and withdraws.
Second, it puts pressure on consumers of Russian energy to start adjusting now.
6/7
First, it increases pressure on Putin. Ratcheting stops when he stops bombing children and withdraws.
Second, it puts pressure on consumers of Russian energy to start adjusting now.
6/7
Third, it can be designed to minimize the logistical disruption in Europe.
Fourth, it introduces much needed clarity.
Finally, with indefinite duration, it is a strong and credible policy.
Absent a full ban, this is a good option. Stop funding his war. Act now.
7/7
Fourth, it introduces much needed clarity.
Finally, with indefinite duration, it is a strong and credible policy.
Absent a full ban, this is a good option. Stop funding his war. Act now.
7/7
cc @JosepBorrellF @BMWK @MFratzscher @BachmannRudi @ben_moll @YGorodnichenko @vonderleyen @Bundeskanzler @c_lindner @RobinBrooksIIF @MESandbu @elinaribakova @GeorgZachmann @Bruegel_org @Noahpinion @McFaul @sguriev @itskhoki @HannoLustig @APeichl @christianbaye13 @joachim_voth
@iggnacy @MorawieckiM @MichalBoni @janrostowski @robertomasz @wjakobik @bderski @hetmanski_m @wpaczos @napokolenia @szczesniak__a @ben_golub @wwwojtekk
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