The new EU sanctions against the Russian central bank come into force just in time for the opening of the financial markets. The hope: Kremlin boss Putin should find it more difficult to finance his war.
The European Union put its severe sanctions against the Russian central bank into effect overnight. According to EU Commission President Ursula von der Leyen, they include a ban on transactions with the financial institution.
In addition, all of the bank’s assets in the EU will be frozen to prevent them from being used to finance Kremlin chief Vladimir Putin’s war against Ukraine.
The punitive measure is considered to be just as serious as the shortly planned exclusion of Russian financial institutions from the bank communication network Swift. According to EU chief diplomat Josep Borrell, around half of the financial reserves of the Russian central bank will be frozen along with other G7 countries. “This will hit Russia’s financial system significantly,” Borrell said in the evening.
EU sanctions: further weaken Russian ruble
According to experts, for example, Russia will no longer be able to use its high foreign exchange holdings to stabilize the ruble. The Russian currency is already weakened, which should bring further hardship for the people of Russia.
According to Borrell, the fact that not all of the reserves of the Russian central bank can be blocked is due to the fact that not all of them are held in Western countries.
“We cannot block the reserves of the Russian bank that are in Moscow or in China,” he said. Recently, Russia has increasingly parked its reserves in countries where they cannot be blocked.
Russian banks are expected to be excluded from Swift later today. In addition, the EU wants to implement further sanctions against Russia’s partner country Belarus as well as against Russian oligarchs, businessmen and politicians.
Source: Stern
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