Russia needs to prepare for new sanctions

Russia needs to prepare for new sanctions

Western sanctions against Russia were introduced for a long time, Russian Deputy Foreign Ministry Sergei Ryabkov said at the sidelines of the Russian Arms Expo - 2015 (RAE-2015). "We should proceed from the premise that the sanctions will last for a long time. The Russian Foreign Ministry is under no illusion that the sanctions may be lifted or alleviated in the near future," he said.

According to him, regardless of what’s happening in Donbass, the United States and the European Union will only toughen the sanctions. "We believe that, regardless of what’s happening in Donbass, we should expect a further clampdown in sanctions in several areas," RIA Novosti reports.

Ryabkov also said that additional US sanctions against Russian legal entities, imposed last week, undermine the capabilities of our defense industry and the whole state mechanism. “In the sphere of international financial discussion, our colleagues from the US and the EU will apply further force in order to fill all the cracks. We understand this and we need to learn to work in these conditions,” the deputy head of the Russian Foreign Ministry noted.

The professor of the RANEPA Chair of Finances, Money Circulation and Credit, Yuri Yudenkov, told Vestnik Kavkaza that there could be unfriendly steps towards Russia, not exactly new sanctions. "For example, yesterday Bulgaria announced a ban on air travel for Russian aircraft over its territory," he said.

The expert also shared his opinion about disconnecting Russia from SWIFT. "Still, we have created some kind of analogue of the payment system. We do not lend abroad, we don't receive long-term money, only three-month loans. Basically, disconnecting Russia from SWIFT is possible. But if this happens, other countries can start to create some kind of analogue. So it could only happen if the United States begins to put pressure on the owners of SWIFT," Yuri Yudenkov concluded.

An associate professor of stock markets and financial engineering of RANEPA, Vasiliy Yakimkin, in his turn, expressed the view that a new wave of sanctions will begin by the end of this year or immediately after the elections in Donbass. "If Donbass won't agree with Kyiv on holding elections and hold it on its own, then there will be a worsening. At the end of 2015, the West will see that the situation in south-eastern Ukraine is not improving, Crimea still belongs to Russia and will impose new sanctions," the expert noted.

"It is clear to everyone that Crimea belongs to Russia, so the United States will put pressure on Russia all along, using the help of the Europeans. Of course, in this situation we must prepare for the fact that the sanctions are imposed against our country for a long time. Foreign Minister Sergei Lavrov and President Vladimir Putin have already spoken about it," Yakimkin said.

"In my opinion, the right thing would be to ban the dollar in our country. However, the Russian authorities are monetarists, especially the Bank of Russia. They work on the instructions of the World Bank, so, of course, they will lobby for the free flow of capital within the country and abroad. Under the current environment, this is a mistake," the associate professor of stock markets and financial engineering of RANEPA stressed.

According to the expert, if after the elections in Donbass they will begin to tighten sectoral sanctions, especially in the oil and gas industry, the access of Russia's leading corporations to technologies will be restricted, so we must to react quickly. "I believe that a cessation of repayment of debts to the banks of those countries which have introduced economic sanctions against Russia would be an effective way. That is, the banking system in Europe will emerge as a house of cards, because the debt of Russian companies to the Western banks is $500 billion. We should not just respond to the steps of the West, but also play with forecasts, so they can't just think about tightening the sanctions," Vasily Yakimkin concluded.