U.S. Secretary of State Antony Blinken meets with Abu Dhabi’s Crown Prince Mohammed bin Zayed Al Nahyan at his residence in Rabat, Morocco March 29, 2022. Jacquelyn Martin/Pool via REUTERS/File Photo
WASHINGTON, March 31 – Senior US officials have spread around the world this week to urge other leaders to join Moscow or continue to pressure Moscow as the war in Ukraine enters its fifth week and the initial economic shock to Russia appears to be ebbing.
Deputy Finance Minister Wally Adeyemo met senior officials in London, Brussels and Paris and will end the week in Berlin; Deputy National Security Adviser for International Economics Daleep Singh harassed Indian officials in New Delhi, and Foreign Minister Antony Blinken discussed the war in Ukraine with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan in Morocco.
The effort comes as the initial impact of stronger-than-expected sanctions on Russian banks, oligarchs and corporations begins to wear off somewhat, and the United States considers its next economic moves to isolate Russian President Vladimir Putin.
Within days of major Russian banks being cut off from the international SWIFT financial transactions network and the bulk of the Central Bank of Russia’s $630 billion foreign exchange war chest shut down, the ruble lost half its value, prompting US officials to declare that Moscow is struggling with a financial crisis.
But a month later, the ruble has largely recovered to its pre-invasion level, helped in part by Russian capital controls, government orders for export firms to sell foreign exchange and companies raising funds to make quarter-end tax payments. Stocks on the Russian stock exchange are trading again, although they have lost value.
Russian bank VTB (VTBR.MM), a key target of sanctions, remains open for business in Europe, where it has collected billions of euros in deposits, mostly from German savers. Other Russian banks are considering China’s UnionPay credit card scheme after Visa and Mastercard shut down Russian operations. Continue reading
And the sanctions have so far left Russia’s biggest economic lifeline untouched – energy sales to Europe, which at current prices could be worth as much as 500 million euros ($555 million) a day. Russia will demand ruble payments for gas starting Friday, which could further boost the currency.
The Biden administration is ensuring European allies are firmly aligned on punishing Putin and hopes to influence leaders who have sat on the sidelines during the war, officials say.
“We must continue to increase pressure on Russia and step up our support for Ukraine,” a senior US official said on condition of anonymity. “This is a challenge facing the free world and all democratic nations. And we have to be prepared for it to be long-lasting.”
WARNING CHINA VS, INDIA
The visits closely follow Biden’s visit to Europe last week and come as Russia and China – the world’s second largest economy – grow closer, with Chinese Foreign Minister Wang Yi meeting his Russian counterpart Sergei Lavrov on Wednesday and reaffirming Beijing’s plans to continue bilateral relations and strengthen cooperation. Continue reading
Deputy Finance Minister Adeyemo’s talks with his European counterparts revolved around sanctions, the impact of India and China on Russia’s potential sanctions-evasion efforts and how to help countries like Germany meet their energy needs in the event of a Russian embargo, a European official said.
Russia’s requirement that foreign buyers pay for their Russian gas imports in rubles from Friday or face supply shortages is a key issue, the official said. European capitals reject the demand, the federal government speaks of “blackmail”.
It is imperative that the United States continue to nurture its relationships with allies, said Catherine Novelli, a former senior US trade official and diplomat. It is “very difficult” to maintain the momentum of sanctions and other punitive measures after initial outrage has subsided, she said.
In India, Deputy National Security Advisor Singh told officials the US would not draw red lines on oil purchases but warned against a rapid acceleration of purchases. Continue reading
India has a military dependent on Russian technology and hardware and has sought to balance its long-standing ties with Russia and the West. Unlike other members of the Quad group of countries – the United States, Japan, Australia – it has not imposed sanctions on Russia.
Singh was speaking ahead of the arrival of Russian Foreign Minister Lavrov in the Indian capital for a two-day trip.
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Reporting by Andrea Shalal, David Lawder in Washington, Mark John in London and John O’Donnell in Frankfurt; Edited by Heather Timmons and Jonathan Oatis