Tag Archives: Ukraine

US Expands Sanctions on Russia

The Obama administration angered Putin and the Kremlin by sanctioning 34 additional individuals and entities for assisting Russian and Ukrainian companies to avoid US penalties and other punishments.

The expansion of the sanctions will help to “maintain the efficacy of existing sanctions” which were put in place in reaction to the Russian annexation of the Crimea last year and for the support that Russian has given to eastern Ukrainian separatists.

Fourteen of the 34 are connected to “serious and sustained evasion,” or are divisions of firms already on the sanctioned list. The treasury department said that six separatists and two ex-government officials from the Ukraine are “complicit” in corruption, or in weakening the Ukrainian government. US citizens are restricted from doing business with those on this list, and any US assets held by these entities are now frozen.

The new sanctions match those put in place by America’s allies and demonstrate Washington’s “unwavering resolve to pressure Russia to respect the security and sovereignty of Ukraine,” John Smith, the acting sanction boss of the treasury department said.

Kremlin spokesman Dmitry Peskov responded to the US move:

“This is a continuation of the unfriendly line against Russia that runs counter to logic, ” he said.

Putin Threatens to Retaliate to Additional Western Sanctions

The Russian Foreign Minister Sergei Ryabkov said on Saturday that his country was prepared to respond in kind to any additional sanctions that the US imposes on Russia.

The US Congress passed a law mandating restrictions on Russian weapons companies and investors in high-tech oil projects which is now waiting for President Obama’s signature to become operational. The new sanctions are a further response to Russia’s annexation of Crimea from Ukraine last March, and their support of pro-Russian rebels in eastern Ukraine.

“We will not be able to leave that without an answer,” Russia’s Interfax news agency quoted Ryabkov as saying.

Russia has consistently denied supporting the rebels with arms or otherwise but that has not prevented the west, including the US and the EU, from imposing economic sanctions in increasing severity on large companies as well as individuals.

Russia has already reacted to past sanctions by restricting the importation of food from a wide range of Western countries. Russia responded with harsh words to the latest congressional action, the Ukraine Freedom Support Act. The Act mandates further sanctions, to which Russia responded by saying that the law will “destroy the carcass of cooperation” between the US and Russia.

NABE Survey Sees Trouble Looming in China

China economy boom or bust?
China economy boom or bust?

According to a new survey conducted by the National Association for Business Economics, a bit beyond half of US business economists believe that China marching towards a serious debt crisis in the next few years.

When asked whether they agreed that “China will face a debt crisis within the next few years,” 52 percent said yes, 25 percent said no, and 23 percent were undecided.

“The biggest concern that has been in discussion is the housing boom and bust in China,” said Jack Kleinhenz, NABE’s president and chief economist at the National Retail Federation. “I think it’s just an overexpansion like we’ve seen in other housing bubbles that have occurred, here in the United States and elsewhere.”

Problems brewing in the Chinese economy include a weakening housing market, expanding debt on the local government level, and a squeezing of supervision of shadow-banking services.

Not all agree with US economists however. Changyong Rhee of the International Monetary Fund said in April that he does not see a full-blown financial crisis for China on the horizon. Kleinhenz added that even if there were a housing bust in China it “shouldn’t have an impact globally” like the housing crisis in the US did. That housing crash helped ignite the 2008 global financial crisis.

The NABE survey was given to 47 member of NABE and was conducted from May 8-21. The economists were also asked about European economics. The vast majority, 84 percent, said that they believe the problems facing Russia and Ukraine “will hinder the economic recovery in Europe.” Whether the crisis will impact the US, however, only 34 percent think it will.