Since the announcement of massive economic sanctions against Russia in retaliation for the invasion of Ukraine, Russians have lived in scenarios that were unthinkable a few weeks ago.
(Re) Read: Western Sanctions Against Russia: A Strategy Destined to Fail?
Kremlin spokesman admits that Russia’s economy is suffering “Serious blow”And that “Dignity” I’m in play.
The European Union has separated seven Russian banks from Swift’s international financial system, but two majors closely related to the hydrocarbon sector, as some European states are heavily dependent on Russian gas. I was careful not to spare a large financial institution.
The bill was published in the Official Journal of the European Union on March 2.
Swift excludes VTB, Russia’s second largest bank, Bank Otkritie, Novikombank (industrial finance), Promsvyazbank, Rossiya Bank, Sovcombank and VEB (Regime Development Bank).
These banking facilities “Close cooperation” London and Washington, “First interested in funding war effort” From Moscow to Ukraine, European officials said about a quarter of Russia’s banking system was covered by the bill.
Sanctions do not cover either Sberbank, the country’s largest bank, or Gazprombank, the financial sector of the hydrocarbon giant, through which most of the payments for Russian gas and oil deliveries to the European Union pass. Hmm.
“Nuclear Weapons” to Eliminate Swift
Exclusion of Swift “nuclear weapons” Finance: This secure messaging platform enables operations such as forwarding payment orders and remittance orders between banks.
About 300 Russian banks and institutions use Swift’s services.
However, Moscow has set up an alternative financial infrastructure for remittances (cards) via a system called SPFS. “meal”Which means “peace” or “world” in Russian and is intended to be equivalent to Visa and Mastercard) and Rating (Akra Agency).
Eligible banks can continue to exchange with foreign banks via means other than Swift (email, fax, etc.), but they are slower, much less secure, especially in very large quantities. The cost is also high.
But the result is already felt by ordinary Russian citizens.
Their money lost more than one-third of its currency value within a few days. Their planes are accepted in only a handful of countries. Their work, their salaries, their loans … everything seems to be threatened.
See (re): Russia: In the face of the collapse of the ruble, Russians are worried about their future
Senator Valentina Matvienko takes sanctions “Unprecedented”,invitation “Everyone connects their brains and analyzes everything that prevents them.” The business world works and invites us not to give in “panic”..
The prime minister takes up a 20-year-old Russian recipe of replacing imports with local products and diversifying sources of income.
Faced with the potential for cataclysms, these declarations seem to be few. The Moscow Stock Exchange has remained closed since Monday, February 28, and authorities are tightening restrictions to limit damage.
In the face of the turmoil in foreign investment, the central bank has announced measures to ban foreigners from selling Russian stocks and withdrawing funds from Russia’s financial markets. It is also forbidden to leave Russia with cash of $ 10,000 or more.
The Treasury is in favor of abolishing VAT for individual purchases of gold, suggesting that it prefers VAT to foreign currency purchases.
Just a few weeks ago, Sberbank, a very profitable major Russian bank, announced its withdrawal from the European market on March 2, dropping the value of the London Stock Exchange by 95%.
While licensed Russian companies and oligarchs are cascading to announce the downturn in their activities, foreign companies are rushing to announce the end of their service in Russia.
Heavyweights in the hydrocarbon sector, such as Shell and BP, have announced their withdrawal from countries that have invested billions of dollars.
Hundreds of thousands, and perhaps more, jobs are at stake, as Russians working in foreign companies are worried about paying wages, as Sberbank’s foreign relations are at stake. increase.
For about 20 years, Russians have enjoyed the fruits of an economy that is internationally integrated with capitalism.
Far from the Soviet rubble, the middle class has become accustomed to foreign travel, restaurants and shops. Vladimir Putin’s lasting popularity is largely due to the financial stability that has been established since its arrival in the Kremlin in 2000.
Decrease in revenue since 2014
According to Alfa Bank economist Natalia Orlova, Russian income has fallen by 10% since the sanctions were adopted in 2014. Russia has not experienced poverty for that long since the 1990s.
If the country accumulated solid reserves to resist the sanctions imposed by the international community in 2014 following the merger of the Crimean Peninsula, this would be to Russian citizens whose purchasing power declined in eight years in the economic downturn. Does not apply. According to a 2021 study by the Levada Institute, many have credibly funded their material well-being, but nearly two-thirds have no savings.
“If a bank has a loan or other debt, it needs to be repaid immediately. The crisis increases the risk of losing a source of income.”In an interview with Ria Novosti agency, recommended financial adviser Sergei Leonidov.