Moscow is biting back. In June it ended flows of oil and gas to Ukraine, and it is restricting exports to other European customers as winter approaches. The Kremlin has banned agricultural imports from countries that have participated in the sanctions. It has closed four McDonald’s restaurants, using health inspections as a pretext, and it is flirting with a national payment system that could replace Visa and MasterCard. Western airlines may find themselves unable to fly over Siberia, forcing flights to Asia to take big detours. American consulting and accounting firms may be prevented from operating in Russia.
Russia has more cards to play. It could cut off supplies of engines to the US space programme. It is a big exporter of titanium and other resources needed by western companies. Moscow could emerge as a sanctions-busting financial partner to a country such as Iran, at the height of nuclear negotiations. The Kremlin could also enlist criminal networks to attack the computer systems of western targets, including major banks.
The west needs a comprehensive strategy that intensifies financial pressure on Moscow while deterring Russian escalation. Sanctions should no longer be tied to diplomatic milestones. Instead, they should be seen as a continuous campaign that leaves Mr Putin and the markets guessing. This approach has proved highly effective in Iran.
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