How new sanctions from G-7 nations could impact Russia

Leaders of the G-7 announced new measures Monday to try and punish Russia for its invasion of Ukraine. The steps are designed to target Russia’s economy and military long term. But in the meantime, Russia’s total war in Ukraine marches violently on. Alina Polyakova, president of the Center for European Policy Analysis, joins Nick Schifrin to discuss.

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  • Nick Schifrin:

    Leaders of the seven largest industrial nations announced new measures today to try and punish Russia for its invasion of Ukraine. The steps are designed to target Russia's economy and military long term.

    But, in the meantime, Russia's total war in Ukraine marches violently on.

    Russia's battlefield of choice today, a shopping mall. Moscow continues to claim its targets are military. The Ukrainian officials said the only target of two Russian missiles today was full of more than 1,000 civilian shopping. President Zelenskyy warned the death toll could be So,– quote — "unimaginable."

    Eight hundred miles away, in the Bavarian Alps, G7 leaders spoke to Zelenskyy via video link. He told them it is not time to negotiate with Russia and urged them to send more weapons and impose more sanctions.

    Joe Biden, President of the United States: Putin has been counting on from the beginning that somehow NATO would — and the G7 would splinter. And — but we haven't and we're not going to, so..

  • Nick Schifrin:

    The seven leading industrial countries have so far provided Ukraine more than $2.8 billion in humanitarian assistance. Today, they promised to support the country — quote — "as long as it takes" and unveiled new steps, a ban on Russian gold, a price cap on Russian oil, sanctions on Russian defense companies, military units accused of war crimes, and officials operating in Ukraine, and higher U.S. tariffs on Russian goods, with proceeds used to reconstruct Ukraine.

    This week, the most advanced U.S. weapons sent to Ukraine arrived. In the dead of the night, Ukrainian soldiers fire the High Mobility Artillery Rocket System, or HIMARS. Ukraine asked for 60. The Biden administration is sending eight with ammunition whose range is capped at 40 miles. A senior administration official told "PBS NewsHour" today the U.S. will also send advanced air defense weapons known as NASAMS.

    But those weapons haven't stopped Moscow's military. Last week, Russia destroyed and captured Severodonetsk, formally Ukraine's administrative center in Luhansk. And, today, it's — quote — "raining fire" down on the twin city of Lysychansk, from which Lyudmila fled.

  • Lyudmila, Lysychansk Resident (through translator):

    What can I tell you? The walls and windows were shaking. You don't know where to hide.

  • Nick Schifrin:

    For more on the latest round of sanctions from the G7 on Russia, we turn to Alina Polyakova, president of the Center for European Policy Analysis, a nonpartisan organization that seeks to promote U.S.-European relations and democratic values.

    Alina Polyakova, welcome back to the "NewsHour." Thank you very much

    U.S. officials said today that a price cap on Russian oil was among the most important steps that they were going to take from the G7. How would that work? And could it actually reduce Russian income?

    Alina Polyakova, Director, Center for European Policy Analysis: Well, it's great to be back on the show, Nick, as always.

    On the cap on the oil, it's very unclear how that would be implemented in real terms. Russia has expanded significantly its exports to Asia, particularly India and China. It's been selling discounted energy, especially oil, to those countries that have been happily buying it up, it seems, as Europe starts to cut down on its energy imports from Russia.

    So imposing a cap, where you only have the G7 involved and not those other countries, seems like it's going to be very, very difficult.

  • Nick Schifrin:

    The G7 is also prohibiting Russian gold. Is that something that could actually reduce Russian income?

  • Alina Polyakova:

    I think the big picture to keep in mind here is that the sanctions are already having effects on the Russian economy.

    The Russian economy is going to be contracting. Russian inflation of the ruble is expected to hit about 20 percent. So, long term, these efforts from the G7 and others will leave the Russian economy incredibly weakened.

    But I think we're talking about a very different question here. We're talking about the question of whether these sanctions will have a short-term, immediate effect on Russia's military strategies and its ability to carry out the war on the ground in Ukraine.

    So far, unfortunately, the answer to that question has been no. Russia is still carrying out an incredibly brutal offensive in Ukraine. Sanctions have not affected his military capability so far. And that is the unfortunate reality that we face. The sanctions are having an effect, but it's much more of a long-term effect vs. a short term effect.

  • Nick Schifrin:

    Perhaps the obvious question, then, is, are there steps that you believe the West should be taking to have more of a short-term impact that can actually change Vladimir Putin's behavior inside of Ukraine now?

  • Alina Polyakova:

    Well, I think Mr. Putin believes that he has time on his side right now.

    He believes that he has the ability to carry out the war, much longer than the Western alliance will stay united in solidarity with Ukraine. So the meeting of the G7 was very, very important for that reason. It sent a very clear message of unity.

    But in the short term, we need to listen to what President Zelenskyy and the Ukrainians are asking for. Ukraine needs many, many more of those high-advanced MLRS systems that we're talking about…

  • Nick Schifrin:

    The multiple-launch rocket systems.

  • Alina Polyakova:

    … the HIMARS and others — exactly — and others as well, to be able to push back the Russian offensive.

    There is a clear concern from NATO officials and Ukrainians as well that the Russians might take a break, regroup, and then go back and relaunch their offensive, potentially going after Ukraine's capital, Kyiv, yet again. So we're in a very, very dangerous territory right now.

    And we — the best thing we can do is increase military and defense supplies to Ukraine immediately.

  • Nick Schifrin:

    And, certainly, senior U.S. officials are worried that Russia has definitely not given up on the longer-term idea of capturing Kyiv.

    But back to the sanctions, I wonder, are average Russians suffering because of these sanctions?

  • Alina Polyakova:

    Certainly, they are.

    I mean, we have seen many sanctions affecting average Russians in terms of their ability to travel, certainly, outside of Russia, their ability to purchase foreign goods and services. But, at the end of the day, the prominent elite, Mr. Putin among them, of course.

    They don't care about the living conditions of the Russian population. Living standards are declining. They're expected to decline further and further as these sanctions take hold and the medium and long term.

    But, unfortunately, the Kremlin elite care much more about their direct revenues, how much they're able to take to line their pockets. And all of that primarily comes from Russia's energy exports. So, until Russia is no longer able to export those energy sources, it no longer has a market for those energy exports, unfortunately, those revenues will keep flowing, and that is what is feeding the Russian war machine.

    And the Russian people are suffering as a result, but the Russian elite, those in power making these decisions don't particularly seem to care about the condition of the Russian people.

  • Nick Schifrin:

    And, Alina Polyakova, I have got about 35 seconds left, so just ask you quickly about companies that I haven't asked you about.

    Since Russia invaded Ukraine, obviously, hundreds of Western companies have left the country. Is that something that people will notice in the Kremlin and the elite and could change their behavior?

  • Alina Polyakova:

    I think, certainly, Russians have been noticing that there's no more McDonald's, for example, in Russia.

    But now we what we have seen happen is, McDonald's, for example, sold off all of its franchises to a Russian oligarch, who has now basically replaced McDonald's with a Russian brand. And that's what we're seeing the Russian government do, is kind of provide government-funded alternatives even to things like Instagram, when the Russian government banned McDonald's, other services the Russians are used to.

    So Russians are certainly noticing. Whether it's affecting them, whether they care, my — it seems to me that they, unfortunately, do not. To be clear, the poorer the Russian population is, the more they have to think about their daily needs, how am I going to support my kids, where's my pension going to come from and cover my prescription drugs, things of that nature, the more that benefits the Kremlin, which can carry out anything it wants in the foreign policy domain, while the Russian people have to make ends meet and don't worry so much about what's happening abroad.

  • Nick Schifrin:

    Alina Polyakova, always a pleasure. Thank you very much.

  • Alina Polyakova:

    Thank you.

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