By launching an attack on Ukraine on Thursday, Russia risks very heavy economic sanctions from the West.
A scenario that had already occurred in 2014 with the annexation of Crimea.
Since then, the country has sought to emancipate itself financially from the nations of the northern hemisphere, to prepare for a new conflict.
Between the neighboring Chinese superpower, a quasi-autonomy in energy and a population experienced in difficulty, Moscow does not lack arguments to resist a major economic war.
By attacking Ukraine militarily on Thursday night, Russia knows that it is exposing itself to heavy financial sanctions from the United States and the European Union.
So far, the West has not activated all its economic reprisals, the ultimate lever to dissuade Moscow from an invasion.
A threat apparently insufficient to calm Russian enthusiasm.
If all the economic sanctions are launched against him, could the country of the tsars bend?
A total suffocation of the giant is unlikely, regardless of the extent of the sanctions against him.
Marc Touati, economist and president of the cabinet Aux orders de l'économie et de la finance, summarizes the Russian emergency exit in one country: China.
“As strong as the European and American sanctions are, Russia will always be able to refer to China, to do direct trade or to transfer its products there and sell them internationally afterwards”, pleads the economist.
In the ball of world condemnations and criticism of the Russian invasion, Beijing shone by its silence.
Additional proof, if necessary, of China's neutrality – even tacit support for Russia – in this conflict.
And with more than 4,000 kilometers of border between the two countries, there is enough to export easily,
The Russian economy has learned to do without us
In 2014, Russia had already suffered heavy economic sanctions following the annexation of Crimea.
The country has since sought to emancipate its economy as much as possible from the West: "Russian agriculture has developed, a gas pipeline has been created with China, Moscow has exchanged a large number of its dollars for gold or yuan and has developed trade with Brazil, India and other rising nations”, list Sylvie Matelly, deputy director of the Institute of international and strategic relations (Iris), economist and specialist in international sanctions.
Illustration with the threat of excluding the country from the Swift network, a global interbank messaging system that connects banks to each other, particularly for transactions.
"Certainly, the effect would be terrible for Russia, but it would also be catastrophic for Europe", anticipates Marc Touati.
And since the annexation of Crimea in 2014, which had already seen such a threat being brandished, Russia has already sought to circumvent the problem: the National Bank of the country has developed its own network, the Financial Message Transfer System, connected to 23 foreign banks.
The country is also thinking of joining the Chinese and Indian banking networks, in order to compensate for the losses.
Same logic for the assets of the Russian oligarchs, threatened with being blocked: "You can well imagine that these billionaires have placed part of their money elsewhere than in the West",
Good revenge from Moscow
In addition to being futile, an attempt to asphyxiate Russia would prove to have serious consequences, especially for Europe.
“It is quite possible to impose severe sanctions against Russia, but it would have a dramatic effect for everyone.
In 2014, Russian retaliation severely penalized our economies,” summarizes Sylvie Matelly.
Natural gas from the country of Tolstoy represents, for example, 40% of imports from the Old Continent, and too heavy sanctions would lead to an even greater inflation of the prices of raw materials, whether gas, oil or wheat.
The cereal is already at its highest level since July 2012, at 9.26 dollars a bushel, while the price of a barrel of Brent rose to 104.5 dollars on Thursday, against less than 80 dollars on January 1, 2022.
However, “Western countries are emerging from two years of pandemic which have considerably weakened their economies and inflated their debts, supports Marc Touati.
These nations need recovery and growth, and therefore low commodity prices”.
Excessive inflation of wheat or gas would necessarily harm the purchasing power of Europeans, and could further aggravate the debt and relaunch the economic crisis.
Worse still, the rise in the prices of these materials is helping Russia, which sells more expensively and fills its pockets.
“Paradoxically, these sanctions are almost beneficial to Russia at the moment,” notes the economist.
A country with strong backs
Russia is perhaps even more armed and ready than the West for an economic war.
The country's public debt does not exceed 20% of its GDP, compared to 120% for France and 98.3% for the Euro zone.
"Russia also has a sovereign wealth fund of 180 billion dollars and financial reserves of 640 billion dollars", informs Marc Touati.
In short, the country could draw on its funds and go into debt for a war, a margin of maneuver that Europe does not necessarily have.
Another element in favor of Moscow, its population.
Sylvie Matelly summarizes simply: “If the price of gasoline increases in France, the country will be in the street.
This will probably not be the case in Russia.
“Last point on the solidity of the kidneys of the Russian economy, its quasi-independence: “In terms of energy, the country has what it takes.
For the manufactured products that the West usually supplies him with, he can ask China”.
China, the essential variable
Beijing is the indispensable pawn in the economic war to come.
China, in the event of an alliance with Russia, makes most Western sanctions insignificant.
“We must seek at least the neutrality of Beijing, or at best a collaboration with him.
Without this, the sanctions will be null and void,” argues Sylvie Matelly.
Because the whole question is whether this economic war is worth it, concludes the expert: “Sanctioning Russia is like shooting our economies in the foot.
Why not, but might as well make sure it serves a purpose.
Already with Vladimir Putin, we are not sure of anything… ”
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