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Biden's "Milquetoast" Russia Sanctions Defanged After Berlin Says Nord Stream 2 Halt Not Permanent

Tyler Durden's Photo
by Tyler Durden
Wednesday, Feb 23, 2022 - 04:02 PM

Pundits are abuzz Wednesday with Biden's announced "first tranche" of sanctions that won't bite. "Who in the Lord’s name does Putin think gives him the right to declare new so-called countries on territory that belonged to his neighbours?" Biden had questioned in his major Tuesday address from the White House the east room. "This is a flagrant violation of international law, and it demands a firm response from the international community." This coming from the leader who currently has some 1,000 troops occupying a foreign country's oil and gas fields over 6,000 miles away

Bloomberg observes of what Biden enacted: "Instead of a sweeping package that crippled top Russian banks, cut its financial transactions off from the global economy, or personally singled out Putin, the U.S. and its allies settled on a modest 'first tranche' of penalties."  

So it appears the White House doesn't in reality think the Russian move to declare Donetsk and Luhansk independence while bolstering the action by sending "peacekeeping" forces is an actual "invasion" - as was the assertion of one of Biden's national security advisers on Tuesday. It's also a possibility that Washington could be starting to believe Moscow when it says it is not going to broaden any military action against Ukraine, despite this being the official media narrative. 

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Bloomberg noted further of the sanctions that targeted Russia's banks VEB.RF and Promsvyazbank that they "hardly amounted to the precedent-shattering, economy-crippling measures the U.S. and its partners long telegraphed if Russian troops were to roll across the border."

So it appears Putin in his bold but limited action in Donbas called the West's bluff in terms of the buildup of boisterous tough talk on sanctions. However, Washington says the sanctions will be "incremental" determinant on Russia's further actions

Later after Biden's televised speech, which prompted the Kremlin to issue a statement saying it hadn't paid attention to, deputy national security adviser for international economics Daleep Singh sought to assure reporters that "This was the beginning of an invasion, and this is the beginning of our response." Thus by day's end, it seems the administration had settled on the phrase that what Putin did was "begin" and "invasion". 

To be expected, the weak 'have your cake and eat it too' sanctions Biden announced came under bipartisan attack from Russia hawks in Congress, with charges of appeasement and comparisons to Hitler's march across Europe (yes really). Bloomberg writes:

Republicans who encouraged him to impose sanctions before any attack by Putin spent Tuesday criticizing his actions as ineffectual half-measures, with Senator Lindsey Graham calling the developments "the 1930s all over again."

But the South Carolina Republican wasn’t the only one to raise the specter of World War II-era appeasement. Allies like Senator Bob Menendez, the New Jersey Democrat who chairs the Foreign Relations Committee, said the U.S. should levy the "overwhelming amount" of sanctions now in order to deter further aggression by Russia.

"I don’t know what we need to wait for," Menendez had told CNN in an interview. "What we can’t have here is another Munich moment" - obviously a bizarre comparison given more Russians died fighting Nazi Germany that any other nationality (and total USSR casualties were massive). 

Among Biden's central threats Tuesday was his reiterating "there will be no longer a Nord Stream 2" after Germany announced it has halted the natural gas pipeline's certification process. But already as of Wednesday Berlin is signaling this "does not mean it will never go into operation," according to the latest words of German Economy Minister Robert Habeck.

But he also somewhat dubiously sought to assure the public and Western allies: "The possibility that Germany gets enough gas and enough resources beyond Russian gas imports is there and should be further expanded," according to an interview with Deutschlandfunk. This begs the all-important question...

"I think we have a good chance of keeping gas, coal and oil supplies to Germany stable with the measures we have already taken," he added, while stressing there's "no rush" on pushing ahead with NS2 certification. But clearly, this is a far cry from the Biden claim that NS2 will be "stopped". 

It's increasingly looking like it won't be Russia feeling the immediate impact regardless...

RUSSIA HAS $630B IN FOREIGN CURRENCY AND GOLD TO SUPPORT COMPANIES AND BANKS -CNBC

Meanwhile, and right on schedule according to the now familiar pattern, US intelligence officials are again sounding the alarm over a "full-scale Russian invasion" of Ukraine coming "within 48 hours" - according to a fresh report in Newsweek...

Rabobank has this to say on Biden's "milquetoast" half-hearted attempt to punish Russia and Putin...

Western sanctions were, with the surprising exception of Germany pausing NordStream 2, milquetoast. They will see Russian oligarchs move yachts around, and cash, but they will not stop a Russian war machine rolling. They don’t hit SWIFT, or key Russian banks, or energy, grains, fertilizer, or metals – so most Russian exports. And they hit very few things on the import side. Some also posited that perhaps President Putin could claim reinvading what he had already invaded once was a win and just sit there, grumpily; the West could sit on its weak sanctions, smugly; and then markets could ramp up again, rampily,… because maybe the Fed wouldn’t have to do as much too. Win, win, win!

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