by Philip Pilkington
Tuesday, 12
July 2022
Analysis
10:00

Western sanctions are already crumbling

Canada has announced that it will 'exempt' Russia over a gas turbine
by Philip Pilkington

On Sunday 10th of July 2022 a news story broke that went largely undiscussed in public. Canada announced that it would break the Russian sanctions and release a gas turbine that was needed to ensure that the Nord Stream 1 pipeline was functional. By clearly signalling that the sanctions against Russia will be broken whenever required, it is obvious that sanctions will not be lasting for a long time.

This follows from a Reuters story that broke on Friday where it was reported that the Kremlin agreed that it would increase the gas supply to Europe and stave off a serious energy crisis if the turbine was returned. It is clear what is happening here: the Kremlin is forcing Europe’s hand to violate their own sanctions deliberately and publicly. Doing this renders the sanctions non-credible.

The Russians went into full troll mode when the Canadians announced their decision. The Twitter account of the Russian embassy to South Africa posted a meme of an elf freezing to death with a caption that says, “we need more sanctions”. Although it will be strongly in the interest of Western leaders not to discuss too loudly what just happened, we are inching closer to the realisation that sanctions do not work in our favour.

Although the demand for the turbine was a clever manoeuvre by the Kremlin, something along these lines was bound to happen eventually. Russia provides 40% of Europe’s gas and there is no simple way to replace this — at least in the short-term. If Russia had not agreed to ramp up the amount of gas it is sending to Europe this summer, the European tanks would be left empty for winter. It is hard to overstate what that would mean.

Obviously, it would mean thousands — perhaps tens or even hundreds of thousands — of Europeans facing serious health consequences and possible death due to the cold. But it would also mean the complete collapse of the European economy. Factories would have to shut down, as would shops and other services. If you think the present inflation is bad, hyperinflation was a real possibility. It is rare that non-authoritarian governments last long in a hyperinflationary scenario.

Western leaders were — thankfully — never going to engage in economic and socio-political suicide. As out of touch as our leaders seem, they know that something like this could mean pitchforks at dusk — and those pitchforks would be pointed at them. So the question arises: what was the point of the posturing in the first place?

The ‘political’ answer is that the political class must be “seen to be doing something”. But seen by whom? Their brinksmanship is leading to higher energy prices, scared financial markets, and worsening inflation. Do they really think the public care more about Ukraine more than they care about domestic issues like cost of living and inflation? If they do, they are delusional.

Everyone in the political class is looking at each other and trying to keep up with the herd. Leaders that buck the trend and point out that the emperor has no clothes are either berated or ignored. This may be extraordinarily shallow behaviour, but it is what happens when you have politics with a lack of actual leadership. Without leadership we have been left to lurch from one crisis to the next.

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Matthew Powell
Matthew Powell
1 month ago

My hunch is that Western sanctions were as hard as they were because they fully expected the war to be over in a matter of weeks and the harsh sanctions could be used as leverage to roll back Russian battlefield gains, in return for their lifting. Unfortunately for Western Economies, Ukraine’s heroism on the battlefield has indefinitely prolonged the war, leaving a set of sanctions, that were largely supposed to be temporary, locked in, and no one now has the political capital reverse them.

Michael F
Michael F
1 month ago
Reply to  Matthew Powell

Exactly. But now that Ukraine is very much off the front pages, Governments will quietly chip away at the sanctions, as Trudeau is doing here. As long as there are enough cake parties, curry nights, and handsy politicians to distract the media, nobody will notice that by this time next year we are back to where we were with Russia. The only casualties will be a handful of oligarchs losing their yachts, and hundreds of thousands of young Ukrainian and Russians losing their lives.

Gregory Cox
Gregory Cox
30 days ago
Reply to  Michael F

The defenestration of Johnson occurs at a time most convenient to Moscow and Brussels.

Steve Jolly
Steve Jolly
30 days ago
Reply to  Matthew Powell

Some probably also hoped the sanctions would turn Putin’s oligarch enablers against him and result in some kind of coup that would kill several birds with one stone. Now we’re sending Ukraine weapons, prolonging the war and the sanctions in order to damage Moscow when both are arguably doing just as much damage to us. Our leaders have misplayed their hand quite badly, both as a result of their mistaken assumption that Russia would quickly defeat Ukraine, and their failure to account for the double edged nature of economic warfare in general.

Steve Jolly
Steve Jolly
30 days ago

When moral imperatives clash with actual human needs, the latter is going to win every single time. To paraphrase a popular villain, people are only as good as the world allows them to be. People have the luxury of caring about wars happening hundreds or thousands of miles away while they’re comfortable and well fed watching the news on their big screen TVs. If those homes aren’t so comfortable and they aren’t so well fed, and their big-screen TV doesn’t work because the power is out again, they tend to care more about their own problems. Then, they sensibly elect politicians who prioritize their needs over whatever the moral imperative of the day is. It won’t get to that point because our politicians won’t let it, they’ll start making ‘exceptions’ like this until the public mood turns or they just lose interest, whichever comes first, at which point the charade will be dropped altogether. The decarbonize crowd should be taking notes because unless some miraculous new technology intervenes, they’ll be learning this lesson in the near future as well.

Last edited 30 days ago by Steve Jolly
Adam Bacon
Adam Bacon
30 days ago
Reply to  Steve Jolly

I truly hope that you are right, though given the apparent dumbness of most of our politicians over the last two and a half years I am not convinced.

Warren Trees
Warren Trees
30 days ago

“As out of touch as our leaders seem…”
We all like to slam our political leaders, which is so easy these days, but why not start slamming the people that vote for them in the first place, for heaven’s sake. Perhaps it’s time to become accountable.

J Bryant
J Bryant
30 days ago

From his earlier articles, it’s clear the author strongly believe that sanctions are ineffective and counterproductive, and now he predicts they are about to crumble.
My sense is he’s overstating the reality somewhat. I believe the West intends to maintain economic pressure on Putin indefinitely. I agree with the author that sanctions will not topple his regime anytime soon, but over the long haul they might seriously undermine his economy.
I think we’re now seeing a rebalancing of sanctions that will leave in place the ones the West can live with. The author might argue those sanctions will be the weakest ones, but I think it’s too early to know.
My question is why doesn’t Putin continue to reduce gas/energy supplies to Europe? The author is certainly not overstating the effects of empty energy reserves on Europe this winter. I suppose that would reduce Russia’s income.
This war really is a mess and Biden’s rhetoric seems to have left him, and his allies, in a place where they can’t negotiate a resolution.

Andrew Roman
Andrew Roman
30 days ago

Trudeau said he is only doing this because Germany asked him to, not because Russia asked him to.

Warren Trees
Warren Trees
30 days ago
Reply to  Andrew Roman

Ok, I got it now. Sanctions are only to be strictly enforced until the moment they are not. Even the word, “sanctions”, seems like one of those cheap words used to cover for the fact that someone carries a very small stick. Any sock puppet leader can announce, “We’re going to slap more sanctions on those bloody bastards!”

Dermot O'Sullivan
Dermot O'Sullivan
30 days ago

I may be out of date but I’m not sure that Russian gas has been sanctioned. There is some sort of pledge by the EU to reduce it over time.

Brian Villanueva
Brian Villanueva
29 days ago

It’s shallow behavior from shallow leaders elected by a shallow and decadent people. Remember the movie Don’t Look Up? The director thought he was satirizing global warming deniers; he was really satirizing Western civilization.

Johan Grönwall
Johan Grönwall
30 days ago

Article is an excellent example of advanced russian trolling: doom and gloom and degenerate westerners who just can’t cope with any hardship. We just have to wait and see who breaks first, won’t we?

Adam Bacon
Adam Bacon
30 days ago

Well so far it seems like the Russian economy is doing fine, the price of oil and gas is up, the value of the rouble is up and we’re still buying their fossil fuel s via India. Meanwhile our economies are tanking, and Russia is battering Ukraine into submission on the battlefield.

But, yes, let’s see who ‘breaks’ first. Looking forward to that glorious Ukrainian victory, with their country and our economies in ruins.

Warren T
Warren T
30 days ago
Reply to  Adam Bacon

I wonder if they are already preparing the festivities for the victory parade in Kyiv? Perhaps the American President can be the Grand Marshall, along side his brilliant and erstwhile side kick, UVL.

Warren T
Warren T
30 days ago

Please report back to us in January, when the average temperature dips a bit and the cost of keeping the frost off the kitchen table becomes quite burdensome for the average bloke.