Guardian: real sanctions against Russia impossible, thats economic suicide

He said EU countries owned a combined €300bn of Russian assets that would be vulnerable to confiscation if a full-blooded financial war broke out. The UK owns billions more via firms such as BP, which has a near-20% stake in the Russian oil company Rosneft.

“Sanctions are one of the few options that European countries have in a conflict situation like this. If you disconnect North Korea or Iran from the international financial system, you do not expose yourself to that much damage.”

Speaking on BBC News, he added: “But while I don’t say it is impossible to envisage Russia being barred from the Swift system, it is a nuclear option that means you exterminate yourself along with your enemy.”"

Other measures that could be taken:

* Land blockade of Kaliningrad province

* Funding and arms to Moldova to pressure Russian troops in the east of that country to get out.

* Recognize Southern Kurile Islands as Japanese territory

* Funding to Belarussian opposition groups.

Now the scale of the conflicts got larger and Russia attacked a country with >40M inhabitants.

Russia will not stop with wars until it looses its means to do so.

Russia has a big pile of money they earn by exporting oil and gas to Europe. 50% of their trade volume is directed to Europe. I would bet Russia needs that money to sustain its military spendings. Maybe not in one single year but over a longer period of time, let’s say 10 years. With other words: Europe paid for the war with Ukraine.

There may be other countries as well that do not care about human rights but export a lot of goods to Europe or industrial countries in general.

Imho the right thing to do would be to implement an automatism that penalties undesired behaviour of trade partners. Not specifically for Russia but for all countries that do not behave well.

One easy means to achieve this would be a taxation system based on the compliance with regard to a well defined set of human rights standards.

Example:

- suppression of the opposition: 10% tax rate on imports from that country.

- no free press: another 10% tax rate

- full scale war with neighbouring state: 50% tax rate for the next 20 years.

As the tax rate is selectively applied, source countries that behave well have an economic benefit compared to countries that don’t behave well.

Applied to Russia and the Eu this would have the following consequences:

1. the cost base of exports from Russia to the eu would increase by the given tax rate if they decide ship to the eu.

2. Russia could ship somewhere else. but as their total addressable market shrinks they will earn less even if they ship to china or any other sufficiently large market without such a tax. Thus they have less money to spend for militaria anyway.

3. Energy would be more expensive for Europeans. This will speed up the migration to other sources of energy and reduce the consumption. It will also cause a recession, but so what. It’s only money lost.

4. Other producing countries may invest as well in energy infrastructure as the increased cost base makes investments more lucrative

Even if the economic consequences in the short term are dire, in the longer term the market will regulate that very well.

Also: going to a bloody war with Russia will for sure be worse that a 2..5year recession. For any industrialised country it would be much worse to loose let’s say 100k productive inhabitants compared with loosing some billions of the local currency.