Good morning. The last round of sanctions on Russia didn’t seem to work. Will this one?

New York Times newsletter

A power station in Luhansk, Ukraine, after being bombed.Tyler Hicks/The New York Times
Sanctions 2.0
Eight years ago, after Russia annexed Ukraine’s Crimean Peninsula, the U.S. and its allies harshly condemned the invasion and imposed economic sanctions on Russia.
It barely seemed to matter.
Russia still controls Crimea. Russia’s economy, after going through a recession, soon started growing again. President Vladimir Putin remains firmly in control of his government — and has now begun another invasion, this time of eastern Ukraine.
In response, President Biden yesterday announced a new set of sanctions, imposed in tandem with Britain and the European Union. Putin’s aggression, Biden said, is “a flagrant violation of international law, and it demands a firm response from the international community.” Biden also signaled that more sanctions may follow.
The obvious question is whether these sanctions will be any more effective than the earlier ones. Today’s newsletter lays out the possibilities.
By The New York Times
Targeted and weak
The 2014 sanctions against Russia did have some effect — arguably more than many people have realized. They made it harder for Russian banks to obtain foreign loans and restricted Western companies from working with Russian oil companies, among other steps.
By the summer of 2014, Russia’s economy was shrinking, and it continued shrinking for two years. The value of the ruble plunged on global markets, increasing the price of many goods for companies and consumers. Russian businesses had a harder time raising money for new projects.
These economic problems seem to have softened Putin’s domestic support. His approval rating among Russians initially surged after the Crimea invasion — to around 80 percent — before falling. It has hovered between 60 percent and 65 percent for much of the past two years, according to the Levada Center. Last year, opposition groups held some of the largest protests of Putin’s nearly two decades in power.
The sanctions might even have been painful enough to have deterred Putin from invading eastern Ukraine in 2014, which he seemed to be planning, as Anders Aslund and Maria Snegovaya have argued in an Atlantic Council report.
Still, the sanctions clearly did not reorder Russian politics. Putin, after all, moved to claim eastern Ukraine this week. Experts say that the sanctions’ limited effect is not surprising, because they were less ambitious than the sanctions the U.S. has imposed on other countries that have flouted global rules, like Iran, North Korea and Venezuela.

Russian howitzers outside Taganrog, Russia, yesterday.The New York Times
“In 2014, when Putin invaded Ukraine the first time and annexed Crimea, the West acted too slowly and timidly initially,” Michael McFaul, the U.S. ambassador to Russia from 2012 to 2014, told me yesterday.
One reason is that the 2014 sanctions were the product of negotiations with European countries that wanted to be more cautious than the U.S. The sanctions were also intentionally narrow, designed to hurt sectors of the economy with close ties to Putin’s regime while minimizing the effect on most Russians and on the global economy.
The reality is that for sanctions to have big political repercussions, they often need to be harsh. “‘Smart’ or ‘targeted’ sanctions won’t work,” Edward Fishman and Chris Miller, two international-relations experts, recently wrote in Politico. “To really impose pain on Russia, the U.S. and Europe will have to bear some burden, too — although, fortunately, there are ways to minimize the fallout for Western economies.”
Biden acknowledged as much in his remarks at the White House yesterday. “Defending freedom will have costs, for us as well and here at home,” he said. “We need to be honest about that.” He added that he would take steps intended to minimize the increase in gas prices.
This is the approach that the U.S. took toward Iran more than a decade ago. It imposed tough sanctions, despite their likely effect on world oil markets and the damage to Iranians’ living standards. Those sanctions helped push Iran’s regime to negotiate over its nuclear program.
In Russia’s case, a more aggressive set of sanctions would start with a refusal to buy its oil — by far Russia’s biggest revenue source — perhaps phased in to mitigate the price increases on global markets. It could also involve restricting exports to Russia, like automobile parts and computers, or forbidding other banks from working with Russian banks.
Russia would still have access to parts of the global economy, especially if China continued working with it. But the effect could nonetheless be substantial, because Russia’s economy is now quite integrated with the European and U.S. economies.
President Biden announcing sanctions against Russia.Al Drago for The New York Times
More to come?
Which path are Biden and the E.U. choosing?
For now, they have imposed sanctions that Biden said went beyond the 2014 sanctions while still falling well short of what the U.S. and Europe could impose. The measures include blocking Russia’s government from borrowing money in Western financial markets and cutting off two large Russian banks from the U.S. financial system.
(My colleague Edward Wong has more details here. And Peter Coy of Times Opinion has written that isolating banks can be an effective tool.)
In the short term, those sanctions will almost certainly not cause Putin to stop menacing Ukraine. “Russia right now is sitting on quite a pile of extra cash,” Melissa Eddy, a Times correspondent in Berlin, told my colleague Claire Moses. “They have a war chest.”
But there are two big uncertainties: whether the sanctions hurt Russia’s economy once that war chest is drawn down; and whether the U.S. and Europe will impose tougher sanctions if Putin continues his war.
“The U.S. and the E.U. have worked hard over eight weeks to pull together what would be a serious, painful, massive package of sanctions that is designed to hurt,” Steven Erlanger, The Times’s chief diplomatic correspondent in Europe, told us. They have not yet enacted all of those potential sanctions. But yesterday’s announcement, Steven added, “gives them room to hit Putin harder if he does more.”
Biden vowed yesterday to follow that strategy: “If Russia goes further with this invasion,” he said, “we stand prepared to go further.”
Related
The E.U. is preparing for large numbers of displaced people from Ukraine if a full-on conflict breaks out.Germany put a stop to an $11 billion Russian natural gas pipeline that would link the two countries.“A time of worries”: New York City’s Ukrainians are anxious and afraid.Madeleine Albright, former secretary of state, argues that the invasion will leave Russia “diplomatically isolated, economically crippled and strategically vulnerable.”Sign up for a nightly update on the Ukraine crisis.

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