Difference between revisions of "Russia Energy Ban Myth Buster"
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Frequent arguments against taking action now, and why they don’t stack up -- by [https://twitter.com/LukaszRachel @lukaszrachel] | Frequent arguments against taking action now, and why they don’t stack up -- by [https://twitter.com/LukaszRachel @lukaszrachel] | ||
| − | = MYTH 1: We are not financing Putin’s war (b/c of sanctions, he cannot use the billions of euros/dollars we send him anyway) | + | = MYTH 1: We are not financing Putin’s war (b/c of sanctions, he cannot use the billions of euros/dollars we send him anyway) = |
FALSE: there’s no doubt that a ban would drastically limit the real resources available for war. Existing sanctions are inherently leaky. They limit the availability of the stock of Russia’s reserves, | FALSE: there’s no doubt that a ban would drastically limit the real resources available for war. Existing sanctions are inherently leaky. They limit the availability of the stock of Russia’s reserves, | ||
| − | but the flow of energy revenues on the order of 700 million euros per day is more than enough to hire mercenaries, buy weapons and destabilize EU politics. Over 40% of Putin’s budget | + | but the flow of energy revenues on the order of 700 million euros per day is more than enough to hire mercenaries, buy weapons and destabilize EU politics. Over [https://www.economist.com/by-invitation/2022/03/19/daniel-yergin-on-russia-losing-its-status-as-an-energy-superpower 40%] of Putin’s budget revenues derive from energy exports - without this income, enormous cuts to public spending across the board will be required. Printing rubles does not help: without the backing of the real |
| − | revenues derive from energy exports - without this income, enormous cuts to public spending across the board will be required. Printing rubles does not help: without the backing of the real | + | resources obtained through energy exports, the empty rubles would fuel (hyper)inflation and an economic collapse. Currently, [https://finance.yahoo.com/news/russian-central-bank-allows-exporters-081913016.html forex revenues] are sold to support the ruble ([https://finance.yahoo.com/quote/RUB%3DX/chart?p=RUB%3DX which has appreciated most recently]), limiting the impact domestically. So yes, there is no escaping it: our energy purchases are directly funding Putin’s war machine. See numbers [https://beyond-coal.eu/russian-fossil-fuel-tracker/ here] and more analysis |
| − | resources obtained through energy exports, the empty rubles would fuel (hyper)inflation and an economic collapse. Currently, forex revenues are sold to support the ruble (which has | + | [https://twitter.com/t0nyyates/status/1501625549013368840 here] and [https://twitter.com/FabioGhironi/status/1501614475547340802 here]. See also [https://dropbox.com/s/wmptre3vkfkqysf/Guriev%20Itskhoki.pdf top Russian economists] – the most informed voices on these issues on the planet -- forcefully argue that the energy ban is our best chance to stop the war early ([https://spiegel.de/wirtschaft/oel-und-gas-aus-russland-warum-ein-embargo-wladimir-putins-krieg-beenden-koennte-a-9537c522-5f56-4856-97bc-86080c2b7028 in German here]). |
| − | appreciated most recently), limiting the impact domestically. So yes, there is no escaping it: our energy purchases are directly funding Putin’s war machine. See numbers here and more analysis | ||
| − | here and here. See also top Russian economists – the most informed voices on these issues on the planet -- forcefully argue that the energy ban is our best chance to stop the war early (in | ||
| − | German here). | ||
Revision as of 14:23, 6 June 2022
Frequent arguments against taking action now, and why they don’t stack up -- by @lukaszrachel
MYTH 1: We are not financing Putin’s war (b/c of sanctions, he cannot use the billions of euros/dollars we send him anyway)
FALSE: there’s no doubt that a ban would drastically limit the real resources available for war. Existing sanctions are inherently leaky. They limit the availability of the stock of Russia’s reserves, but the flow of energy revenues on the order of 700 million euros per day is more than enough to hire mercenaries, buy weapons and destabilize EU politics. Over 40% of Putin’s budget revenues derive from energy exports - without this income, enormous cuts to public spending across the board will be required. Printing rubles does not help: without the backing of the real resources obtained through energy exports, the empty rubles would fuel (hyper)inflation and an economic collapse. Currently, forex revenues are sold to support the ruble (which has appreciated most recently), limiting the impact domestically. So yes, there is no escaping it: our energy purchases are directly funding Putin’s war machine. See numbers here and more analysis here and here. See also top Russian economists – the most informed voices on these issues on the planet -- forcefully argue that the energy ban is our best chance to stop the war early (in German here).