Russian invasion Sanctions

EU summit: Sanctions bite – Russia cannot defy the law of gravity

The sanctions are “not a magic bullet” but after four years they are having a significant effect on the Russian economy, the EU’s sanctions envoy David O’Sullivan tells the Guardian.

O’Sullivan says that a large part of the Russian economy has been severely distorted when the war economy was built up at the expense of the civilian economy. According to O’Sullivan, it is therefore possible that Russia will reach a point sometime in 2026 where “everything becomes unsustainable”.

– I think there is a limit to how long you can defy the economic laws of gravity, the sanctions envoy tells the Guardian.

Sanctions are rounded off with new Russian “monopoly money”

They look like “monopoly money” but the new colorful banknotes are used to move Russian rubles around the world, writes the Financial Times.

The state-linked start-up A7 is emerging as Russia’s main option for resolving trade and payments as sanctions cut the country off from the global banking system.

A7 recently said it handled transactions worth the equivalent of 900 billion kronor in the company’s first six months. The figure is impossible to confirm but not improbable, says Elise Thomas, an investigator at the Centre for Information Resilience research group.

“They are building a very complex aircraft while flying it very quickly,” she tells the FT.

Russian companies can buy banknotes that act as promissory notes and give them to, for example, Chinese suppliers. These are guaranteed by Russian law and A7 then undertakes to carry out the transaction, company representatives said recently at a presentation for Russian companies.

Envoy: China pretends not to know about Russian exports

EU goods are smuggled into Russia through former Soviet republics in Central Asia and countries such as Serbia and Turkey.

The EU is trying to convince other countries not to allow European goods to be sold to Russia, especially components that can be used militarily and have had “some success,” EU sanctions envoy David O’Sullivan told the Guardian.

China, which has a “friendship without borders” with Russia, is the clear exception. It is “obvious” that “China is filling gaps and providing support” to Russia even if there is no direct military export, O’Sullivan said, adding that the issue has been raised by several EU leaders in talks with China.

“The answer is always the same: ‘Nothing to see here. We don’t know what you’re talking about. We don’t see a problem.”