A new package of massive and targeted sanctions approved by European Leaders on Thursday night will have a maximum impact on the Russian economy and the political elite, European Commission President Ursula von der Leyen said at a joint press conference with European COuncil President Charles Michel and French President Emmanuel Macron, following the Special meeting of the European Council of 24 February.
According to von der Leyen, the package builds on five pillars: financial, energy sector and transport sectors, export controls and the ban of export financing, and visa policy.
The first pillar includes financial sanctions that cut Russia’s access to the most important capital markets. “We are now targeting 70% of the Russian banking market, but also key state-owned companies, including the field of defence,” said von der Leyen. “These sanctions will increase Russia’s borrowing costs, raise inflation and gradually erode Russia’s industrial base. We are also targeting the Russian elite by curbing their deposits so that they cannot hide their money any more in safe havens in Europe.”
The second main pillar targets the energy sector, a key economic area, which especially benefits the Russian state. The EU’s export ban will hit the oil sector by making it impossible for Russia to upgrade its oil refineries, which gave Russia export revenues of €24 billion in 2019.
Thirdly, the EU bans the sale of all aircrafts, spare parts and equipment to Russian airlines. “This will degrade the key sector of Russia’s economy and the country’s connectivity. Three quarters of Russia’s current commercial air fleet were built in the European Union, the US and Canada. And therefore, they are massively depending on that,” said the President.
Fourthly, the EU is limiting Russia’s access to important technologies such as semiconductors or cutting-edge technologies.
Finally, diplomats and related groups, and business people will no longer have privileged access to the European Union.
Von der Leyen said all these measures were closely coordinated with the EU’s partners and allies, including the United States, the United Kingdom, Canada, Norway, South Korea, Japan and Australia.
“Putin is trying to subjugate a friendly European country. And he is trying to redraw the maps of Europe by force. He must, and he will, fail,” concluded Ursula von der Leyen.
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