European finance ministers urge increased sanctions for Russia

The finance ministers of Poland, Sweden, Finland, the Netherlands and the Baltic States, as well as the Danish economy minister, have called for increased sanctions pressure on Russia.

"Russia's wartime economy is not the resilient, sanctions-proof entity that Moscow portrays. Instead, sanctions are putting significant strain on Russia, and could exert even more pressure if the West remains patient," argued eight European finance ministers in a joint article published in The Guardian, as per Caliber.Az.

On the surface, Russia appears to be thriving. Since the Kremlin's 2022 invasion of Ukraine, war-related manufacturing has surged, wages have risen, and trade with alternative markets has increased.

However, the European ministers see a different picture.

"A closer examination reveals that the Russian economy is not as robust as Moscow claims," wrote the group, which included representatives from Sweden, Poland, and the Netherlands.

Although Russia's growing GDP may suggest stability, the ministers argue that this growth is not sustainable. They point out that significant financial stimulus is the primary force keeping Russia afloat, but this support is not unlimited. Nearly two years into the war, Russia has almost halved the liquid assets in its national wealth fund, according to the ministers.

The ministers also highlight extreme measures taken by Russia, such as export bans and strict capital controls, which indicate a regression towards a Soviet-style economy. They argue that what might appear as a boost to Russian growth is actually the start of economic re-Sovietization.

"History clearly shows that this is not a viable long-term strategy," the ministers state, noting that overheating in the private sector will likely lead to stagnation and increased inflation.

Given these conditions, the ministers argue that Western sanctions are more crucial than ever. They call for tighter restrictions on Russia's energy, finance, and technology sectors. If the US and its allies maintain pressure, Russia's continued reliance on stimulus will force the Kremlin to resort to monetary financing, eroding cash reserves and exacerbating inflation.

The ministers believe that with enough patience, the West can outlast Russia's economic confidence, leading to significant long-term damage.

Additionally, they urge Western leaders to take a tougher stance on countries that supply Russia with essential goods for its war efforts.

"Both border and source countries should work to close the loopholes that allow the delivery of goods feeding the Russian war machine, directly or indirectly," the ministers write. They also emphasize the importance of implementing similar sanctions on Belarus and increasing pressure on other key enablers of sanction circumvention in East Asia and the Middle East.