US Escalates Fiscal Fighting, Cutting Off Russia's Reserves
The strategy of the Kremlin appears to be this: Commit the most heinous civilian atrocities since World War II, tell the rest of the world the evidence is a hoax, and then threaten everyone with nuclear annihilation if they try to intervene.
A big part of this strategy is believable belligerence, with Vladimir Putin having to keep a straight face through all of his public and insidious lies. He’s already cut his own people off to the rest of the world via bans on social media; all he has to do is say the words. This is, of course, how tyrants work.
But the Russian people will still feel the brunt of the world’s angst, largely through newly impoverished conditions. This week, the US looked to add a catalyst to the inevitable fiscal famine of the Russian Federation.
Russia’s efforts to avoid a sovereign default took another blow after the U.S. Treasury halted dollar debt payments from the country’s accounts at U.S. banks.
The decision further complicates Russia’s attempts to keep meeting debt obligations amid the sanctions imposed after it invaded Ukraine. As the government tries to sidestep its first external default in about a century, those restrictions have hampered and delayed the process of transferring money to bond holders.
And there was more trouble to come still.
Other governments are also planning tougher sanctions after allegations that Russian troops massacred civilians in Bucha and other Ukrainian towns. The European Union is proposing to ban coal imports from Russia, which would be a major step-up for a region that’s so far shied away from targeting energy flows crucial to the bloc’s economy.
The move will certainly receive grand criticism from the Kremlin, who’ve already attempted to equate the first rounds of sanctions with “war”.
