Russian President Vladimir Putin at the Kremlin last week. (Photo by Mikhail Klimentyev/ Sputnik /AFP via Getty Images)
Moscow (CNSNews.com) – As Russia works to counteract, and retaliate against, the effect of Western sanctions, President Vladimir Putin has compared the punitive measures imposed by the U.S. and its allies over his invasion of Ukraine to a “declaration of war.”
“Much of what is taking place now, based on what we can see and what we are coming up against, are methods of fighting Russia,” he told a group of Russian airlines representatives on Saturday.
“As a matter of fact, the sanctions that are being introduced against us are akin to a declaration of war,” he added. “Thankfully it hasn’t come to that yet. I think that our so-called (Western) ‘partners’ understand where this can lead to and how much is at stake, despite their reckless statements.”
The Russian president at that meeting also warned that Moscow would “immediately consider” any country that attempted to institute a no-fly zone over Ukraine as a participant in the conflict.
Many Russian lawmakers in recent days have called for Moscow to provide an “asymmetric response” to sanctions. Speaking to reporters last week, Federation Council member Valentina Matvienko warned that Russia’s counter-measures would focus on targeting the “weaknesses of the West.”
Measures imposed by the U.S. and its allies in Europe and Asia in response to the February 24 invasion include the freezing of a significant portion of Russia’s $630 billion financial reserves, the blacklisting of some of Russia’s largest financial institutions and their removal from the SWIFT interbank messaging system, export controls on sensitive technologies, and a ban on the sale of aircraft to Russia.
Multinational corporations ranging from ExxonMobil to Apple have announced they will either halt their operations in Russia entirely or slash their investments in the country.
The developments have seen the value of Russian ruble to fall by over 30 percent since February 24, which economists warn will greatly lower the purchasing power of Russian businesses and ordinary citizens.
Moody’s analytics agency downgraded Russia’s credit rating to junk status on Sunday, citing “severe concerns around Russia’s willingness and ability to pay its debt obligations.”
Asked on Sunday about Putin’s “declaration of war” comment, Secretary of State Antony Blinken told CBS’ “Face the Nation” that “the impact of the sanctions is already devastating, which is presumably why he said what he said.”
“But at the same time, we continue to see President Putin doubling down and digging in on this aggression against Ukraine. That’s continuing,” Blinken said. “I think we have to be prepared, unfortunately, tragically, for this to go on for some time.”
Kremlin spokesperson Dmitry Peskov admitted to reporters the sanctions had put the economy “under serious pressure,” but insisted that Moscow was in a strong position to overcome any financial difficulties.
“The world is too big for Europe and America to isolate any country, especially one as big as Russia,” he said. “And in the world, as you know, there are many more countries that have a much more balanced, sometimes more reasonable attitude towards the dynamics of the development of international relations.”
Several major economies, including China, India, and the United Arab Emirates, have declined to impose sanctions against Russia.
In a bid to stem the decline of the ruble, Russia’s central bank raised its key interest rate from 9.5 to 20 percent last week. The Kremlin has prohibited Russians from leaving the country with more than $10,000 worth of foreign currency in cash, blocked foreign investors from selling their Russian stocks and bonds, and ordered exporters to sell 80 percent of their foreign currency.
In addition to trying to stabilize its own economy, Moscow has begun looking for ways to impose its own financial penalties against the West.
It has shut down its airspace to airlines from nearly 40 countries, including the U.S. and all 27 members of the European Union, a move likely to impact air travel between Europe and Asia due to Russia’s role as a key transit hub between the two continents.
Russia also announced it would no longer supply its RD-180 rocket engines to the U.S. or help service those currently in use by NASA.
“In a situation like this we can’t supply the United States with our world’s best rocket engines,” Dmitry Rogozin, head of the Roscosmos space agency, told state television. “Let them fly on something else, their broomsticks, I don’t know what.”
U.S. Air Force Secretary Frank Kendall downplayed the decision, however, telling reporters it would not affect U.S. national security launches.
Russia is also reportedly mulling a partial legalization of online piracy. Kommersant reported that the Kremlin was exploring the possibility of abolishing criminal and administrative liability for the unlicensed use of software “belonging to a copyright holder from countries that have supported sanctions” against Russia.
Experts interviewed by the paper said the move could help Russia temporarily mitigate the impact of the departure of IT giants such as Microsoft, IBM, and Oracle.
Yet Russia’s potentially most serious response to Western sanctions would be to introduce its own export controls. In addition to oil and gas, Russia is a major global supplier of wheat and precious metals used in the construction of everything from airplanes to computer chips.
Igor Yushkov, an analyst at the Moscow-based National Energy Security Fund, told the Vzgylad newspaper that if Russia decided to cut its gas supplies to Europe, it could provoke a more serious energy crisis than even the 1973 oil crisis, when the price of oil skyrocketed by 300 percent.
“No matter what anyone says, Europe will have nowhere to get such volumes of gas as it gets from Russia. The world is simply unable to increase production by 150 billion cubic meters,” he said.
“Europeans will try to switch to other sources of energy, but an attempt to switch to coal will fail, since Russia is also the largest coal supplier for the E.U.”
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