• Steve H. Hanke
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Europe's Proposed Russian Sanctions Leaked: Full Report

Tyler Durden's picture




 

It appears the European leaders, rather than actually unleash sanctions (as the US has dictated asked), has decided to 'warn' of possible sanctions with a 10-page memo of options available to them. As The FT reports, the memo (full memo below) prepared by the European Commission and distributed to national capitals, includes a proposal to ban all Europeans from purchasing any new debt or stock issued by Russia’s largest banks and also proposes barring the Russian banks from listing new issues on European exchanges, preventing them from using London or other EU stock markets to raise funds from non-Europeans. While Germany (and many other EU nations remain nervous of the blowback) the 'options memo' is extensive and would likely have significant impact on the Russian economy.

Not everyone's united for these sanctions...

 

As The FT reports,

EU diplomats will weigh sweeping Russian sanctions on Thursday that include a proposal to ban all Europeans from purchasing any new debt or stock issued by Russia’s largest banks, according to a proposal seen by the Financial Times.

 

The sanctions measure, contained in a 10-page options memo prepared by the European Commission and distributed to national capitals, also proposes barring the Russian banks from listing new issues on European exchanges, preventing them from using London or other EU stock markets to raise funds from non-Europeans.

 

...far more extensive than sanctions imposed by the US this month which only targeted two Russian banks, Gazprombank and VEB, since the EU proposal would hit all banks with more than 50 per cent public ownership.

 

...

 

In addition to the capital markets ban, one of the most onerous measures included in the document is a proposed restriction on exporting “sensitive technologies”, which would include components needed by Russia’s critical energy sector.

 

...

 

Other options included in the paper are an arms embargo, though the document says the EU exports only about €300m in weapons to Russia and it would largely affect the €3.2bn in armaments imported from Russia by Europe. Many former Warsaw Pact countries still rely on Russian military equipment.

Implications...

“Restricting access to capital markets for Russian state-owned financial institutions would increase their cost of raising funds and constrain their ability to finance the Russian economy, unless the Russian public authorities provide them with substitute financing,” the document reads.

 

“It would also foster a climate of market uncertainty that is likely to affect the business environment in Russia and accelerate capital outflows. “

 

“[It] would push companies to seek state financing as a stopgap, further straining the government’s budget,” the document states.

Will it happen?

Although Thursday’s meeting of EU ambassadors will be the first time diplomats have formally discussed such broad-based sanctions against Russian economic sectors over Moscow’s interference in the Ukraine crisis, the capital markets ban remains unlikely.

 

The measure would have to be agreed unanimously by all 28 EU members, and several countries have repeatedly shown a reluctance to agree such sector-wide sanctions.

*  *  *

Is it any wonder European leaders are all talk since the potential for blow back is so much larger compared to Washington...

 

The Full leaked memo courtesy of Telegraph:

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Thu, 07/24/2014 - 10:33 | 4997968 Kaiser Sousa
Kaiser Sousa's picture

well this would explain the bullshit that is taking place in the phony paper prices of Gold and Silver right????

http://www.kitco.com/charts/livesilver.html

Thu, 07/24/2014 - 10:42 | 4997987 Kaiser Sousa
Kaiser Sousa's picture

hey i up'd myself just to counter the asshole that downed me...
now fuck off.

Thu, 07/24/2014 - 10:45 | 4998065 PartysOver
PartysOver's picture

I down voted you just to stir the pot a little.   What can I say ES is boring today. 

Thu, 07/24/2014 - 10:48 | 4998090 Kaiser Sousa
Kaiser Sousa's picture

thats cool...
at least you r making as much sense as these rigged fucking markets.

Thu, 07/24/2014 - 12:05 | 4998692 Oracle 911
Oracle 911's picture

On other note Czech gov., Pole gov and Baltic countries are ass-hats of US on a suicidal level. Well these govs. were always ass-hats but not always on this suicidal level. Why I'm saying it?

1st I'm living in this region thus I know what is going on.

2nd Overlap the gas consumption and pusher map and you will see, although Spain a and Portugal doesn't consume that much Russian gas, they govs are reluctant i.e. bit more sane.

Fri, 07/25/2014 - 00:59 | 5002338 StychoKiller
StychoKiller's picture

I was thinking the same thing! Perhaps there's some truth in the pictures of "Polish target pistols!"

Thu, 07/24/2014 - 10:37 | 4997970 Bioscale
Bioscale's picture

The Czechs pushing towards sanctions against Russia... with 100% russian gas and oil consumption plus billions in investments in various industries throughout the country. What the fuck do they expect? A mild winter? Cheap german cars powered by water?

Thu, 07/24/2014 - 10:40 | 4998020 Kirk2NCC1701
Kirk2NCC1701's picture

It's all EMOTION.  Same for Baltic states.

Thu, 07/24/2014 - 11:01 | 4998162 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

It's not. The sanctions currently being considered by the European Commission are so-called "category 3" sanctions. That means they would specifically target key sectors of the Russian economy, such as for example energy and finance. If these sanctions are implemented, Russia is bound to retaliate in one form or another.

Given the fragility of Europe's economic recovery (I use the term lightly), that would put much of the Eurozone back into recession.

Thu, 07/24/2014 - 10:40 | 4998021 SoDamnMad
SoDamnMad's picture

Perhaps the Czechs are the only ones with balls. Get invaded and see you you like it.

Thu, 07/24/2014 - 10:49 | 4998086 Urban Redneck
Urban Redneck's picture

Given the measly ~ÙSD 100 in literally worthless fiat that they get for parting with a barrel of valuable btus-- at what point of shutting the Russians out the banking system is one of their bean counters going to realize that it actually is cheaper to simply turn off the lights in Barter Town and let the animals go at it for a few hot summer nights? It's not like they can't turn the lights back on and sell crude oil later...

Thu, 07/24/2014 - 12:11 | 4998729 Omen IV
Omen IV's picture

Estonia, Latvia, Poland - what would the US have to hold these guys in place - insanity!!!

Thu, 07/24/2014 - 13:14 | 4999092 Jurassic
Jurassic's picture

Nah. Czech government are just bunch of EU rectal alpinists and idiots.

Thu, 07/24/2014 - 13:59 | 4999335 Zwelgje
Zwelgje's picture

+1 for "rectal alpinists."

Thu, 07/24/2014 - 10:34 | 4997977 AnnndItsGone
AnnndItsGone's picture

Wow, a memo! That`s agressive.

Thu, 07/24/2014 - 10:36 | 4997983 barre-de-rire
barre-de-rire's picture

no surprise here those who benefits most russian gaz want to keep the dog leashed.

we'll discuss that  around october when nights will go below zero celcius, would you.

 

Thu, 07/24/2014 - 10:37 | 4997994 WTFUD
WTFUD's picture

Is that a definitely maybe?

Thu, 07/24/2014 - 10:37 | 4997995 IridiumRebel
IridiumRebel's picture

I'm still waiting for definitive proof on MH17.

Thu, 07/24/2014 - 10:37 | 4997997 Quinvarius
Quinvarius's picture

What exactly is Russia supposed to stop doing before we lift sanctions?  They should probably spell that out because it is very unclear what exactly these sanctions are being enacted over.

Thu, 07/24/2014 - 10:42 | 4998033 blabam
blabam's picture

Surrender all land and resources to Uncle Sam...

Thu, 07/24/2014 - 10:48 | 4998056 HamFistedIdiot
HamFistedIdiot's picture

Agreed. WTF are the actions Russia has taken that call for international condemnation? Kiev's got the BUK launching system, Kiev has the air traffic controller tapes, NORAD and NSA have satellite images and voice traffic they refuse to release, the US State Dept paid $5billion for the Ukranian "spring", and Biden's son is now sitting on the board of Ukrane's largest energy producer. I'd say NATO and the US media owe Russia an apology over this "misunderstanding".

Thu, 07/24/2014 - 13:10 | 4999066 BorisTheBlade
BorisTheBlade's picture

Russia is supposed to stop being Russia and become I dunno, Ukraine.

Thu, 07/24/2014 - 10:38 | 4998005 Hannibal
Hannibal's picture

Sanctions are an act of war. Russia has the right to defend it selves.

Thu, 07/24/2014 - 16:15 | 5000195 Raymond K Hessel
Raymond K Hessel's picture

I agree with your sentiment....but not your grammar or spelling. :p

Thu, 07/24/2014 - 10:38 | 4998012 passenger_pidgin
passenger_pidgin's picture

They got together and wrote a memo.  How quaintly European.

Tough talk can resume next spring.

Thu, 07/24/2014 - 10:41 | 4998031 just-my-opinion
just-my-opinion's picture

Memo.....Why wait?

 

Thu, 07/24/2014 - 10:38 | 4998013 Kirk2NCC1701
Kirk2NCC1701's picture

Leftist Sweden and the Baltic states should tread carefully: "No gas for you!"

But, not to worry, with all the QE, they can always burn FED Notes this winter, to stay warm.

Thu, 07/24/2014 - 10:45 | 4998057 passenger_pidgin
passenger_pidgin's picture

Maybe that was the US angle all along.

Thu, 07/24/2014 - 10:53 | 4998138 RaceToTheBottom
RaceToTheBottom's picture

They can reverse the pipelines for all of Russia supplied Europe.....

And supply the gas ..... from North Dakoda.

Solved...  Next....?

Thu, 07/24/2014 - 11:38 | 4998490 samsara
samsara's picture

Either include the /sarc or it's one of the stupidest posts so far.

Pipes go from Source to End Use.   Russia is a SOURCE , Europe is the End Use.

If Europe didn't need Russia's gas, there wouldn't have been pipes to begin with.

Nat. Gas is a Single Continent Suppy/Use material.  (LNG is fly shit on a cannonball in comparison)

Even if North Dakota HAD enough gas(which it don't)  you can't get it off the continent.

 

Thu, 07/24/2014 - 12:09 | 4998718 RaceToTheBottom
RaceToTheBottom's picture

Thanks for at least giving me some benefit of the doubt, although the title of "one of the stupidest posts so far" does have some appeal to my competitive side....

 

Thanks for reading and commenting.  It was a sarc.  I have family in Slovakia and am very familiar with their issues.

Thu, 07/24/2014 - 13:01 | 4999013 NoDecaf
NoDecaf's picture

Sarc police on patrol.

Thu, 07/24/2014 - 11:29 | 4998404 AGuy
AGuy's picture

Not to worry, the USA will supply all the NatGas Europe needs /sarc

Thu, 07/24/2014 - 10:39 | 4998014 williambanzai7
williambanzai7's picture

Shut the gas off already...

Thu, 07/24/2014 - 10:51 | 4998110 Winston Churchill
Winston Churchill's picture

Prolly exactly what Putin called back the Duma for.

Its going to hurt , so he wants a consensus.

Thu, 07/24/2014 - 11:51 | 4998601 Greenskeeper_Carl
Greenskeeper_Carl's picture

I doubt it. Until they get all of this infrastructure settled with china, they still need Europe as a customer. Right now they don't have the ability to send their energy exports to anyone but Europe. This isn't to suggest that Russia doesn't have the upper hand with Europe though. Europe needs Russian energy more than Russia needs their money.

Thu, 07/24/2014 - 14:27 | 4999516 Freddie
Freddie's picture

What is interesting is the calendar is ticking.  This whole phony coup with Joe Biden's son and all these other criminals was launched in Spring.   Look at the calendar.  July 24.  Getting close to fall then winter.  Putin can just wait. 

Hopefully some Russians are coming across to protect the locals in Western Ukraine. 

Thu, 07/24/2014 - 16:15 | 5000200 Raymond K Hessel
Raymond K Hessel's picture

Plus, Putin knows how risky it is to have only China as a client.

Thu, 07/24/2014 - 20:49 | 5001688 IronForge
IronForge's picture

INDia

Thu, 07/24/2014 - 11:19 | 4998346 SWCroaker
SWCroaker's picture

I suspect the US drools over the prospect; they'd love it.   

Thu, 07/24/2014 - 10:39 | 4998016 Sudden Debt
Sudden Debt's picture

Ehe.... And of course silver is being knocked down just because...

Thu, 07/24/2014 - 10:39 | 4998018 icanhasbailout
icanhasbailout's picture

Too soon to place bets on a massive energy crisis in Europe this winter?

Thu, 07/24/2014 - 10:41 | 4998032 barre-de-rire
barre-de-rire's picture

time to change the way people are cooking in europ... right now.

 

Thu, 07/24/2014 - 10:43 | 4998044 Bioscale
Bioscale's picture

The wood party.

Thu, 07/24/2014 - 10:59 | 4998189 barre-de-rire
barre-de-rire's picture

 

electrical unballasting is very possible this winter if many people do not have gaz to eat-heat/both. turning millions housing from gaz & electrical to full electrical will provok serious shit this winter.

there is no possibility to avoid this fact.

Thu, 07/24/2014 - 12:49 | 4998911 Uskatex
Uskatex's picture

No if the provider has installed "intelligent" counters that are able to interrupt the power if it exceeds a given limit, that can be changed by remote.

Thu, 07/24/2014 - 10:44 | 4998051 just-my-opinion
just-my-opinion's picture

I'm in Texas....I just gotta get thru the hot

 

Well...then....there is all this other stupid shit

 

Chess or Nukes

 

Time to play the game

Thu, 07/24/2014 - 10:49 | 4998100 just-my-opinion
just-my-opinion's picture

Petro-dollar...What...thats chess.....

 

If you nuke Houston....I might live

 

Fun while it lasted....Did I say Bitches out loud

 

Peace out

 

Thu, 07/24/2014 - 14:31 | 4999537 Freddie
Freddie's picture

Look at the calendar.  We are almost at the end of July.  The summer is getting closer to ending in northern-central Europe.

Thu, 07/24/2014 - 10:42 | 4998037 Dubaibanker
Dubaibanker's picture

< I call the bluff.....if the report has been leaked, sanctions are NOT happening.

< Sanctions will happen 

Let's vote.

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