G-7 sees ‘massive impact’ of Russia sanctions, weighs more

An armed man walks past a burned armoured personnel carrier at a check-point in the city of Brovary, outside Kyiv, on March 1, 2022. PHOTO: AFP

BERLIN (REUTERS) - Western sanctions against Russia are having a huge impact on its economy, Germany’s finance minister said Tuesday (March 1), as the Group of 7 (G-7) mulled further punitive measures for Moscow’s invasion of Ukraine.

Sanctions have “already had a massive impact on capital markets and the currency”, said Christian Lindner, whose country holds the rotating presidency of the G7 club of wealthy nations.

G-7 finance ministers at a meeting “exchanged suggestions for further measures that could be taken”, Lindner told a press conference, adding that a decision on the proposals would be taken in the coming days.

The aim of the sanctions is to “isolate Russia politically, financially and economically”, Lindner said.

“We must proceed with significantly stronger sanctions against Putin’s supporters” Lindner told the German daily Handelsblatt in an interview published after the meeting, referring to Russian President Vladimir Putin.

New measures should target “oligarchs who send their children to English private schools, have a house on the Cote d’Azur and shop on the Kurfuerstendamm” in Berlin, while their “assets and capital flows should be identified and dried up”, Lindner said.

Since the start of the invasion, Western countries have aimed a barrage of sanctions against Moscow, including the exclusion of a number of banks from the SWIFT payments network, a key piece of piping in the global financial system.

Western allies have also taken steps to limit the Russian central bank’s access to international capital markets, destabilising the ruble, as well as freezing the foreign-held assets of a clutch of Russian oligarchs.

The impact of sanctions on the central bank has “surpassed the expectations we had”, Lindner told the press conference, adding that Putin’s “war chest has been hit hard”.

“These measures have a limited impact on us and a maximum impact on Russia,” the finance minister said.

Along with G-7 representatives from Canada, the United States, France, Italy, Japan, Britain and the European Union, the meeting was joined by the Ukranian Finance Minister Sergiy Marchenko.

 Follow The Straits Times' live coverage on the Ukraine crisis here.

Remote video URL

Join ST's Telegram channel and get the latest breaking news delivered to you.