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At the time of writing this article a missile attack is being launched on Kyiv. It’s time to get over the shock and start acting. The West should exclude Russia from the SWIFT system, even if this halts the supply of coal, gas and oil from Russia. If we cannot afford such sanctions, can we afford another war in Europe? – wonders Wojciech Jakóbik, editor-in-chief at BiznesAlert.pl.
The incoming news about the advance of the Russian armed forces on Ukraine can be followed on BiznesAlert.pl The US and the European Union responded to the Russian aggression. NATO and the EU are coordinating their sanctions. They have been imposed on the financial system and the high-tech industry. The US and the European Union hit the banking sector of Russia: Americans aimed at the VTB bank and made it impossible to conduct transactions in dollars, while the EU sanctions affected 70 percent of the banking sector. Together they hit the largest Russian companies with financial restrictions. The Americans and Europeans cut Russia off from the high-tech necessary to modernize the oil sector, especially refineries. They also blocked the supply of semiconductors and other goods that Russia does not own. So far, however, the sanctions are not as severe as Ukrainians hoped. Kyiv demanded the exclusion of Russia from the SWIFT banking system. Such a solution has been applied to, among others, Iran, blocking its ability to settle transactions and forcing it to trade hydrocarbons on the black market and through barter. Perhaps that is why such a move is feared by some EU countries, among which Cyprus, Germany, Hungary and Italy are unofficially mentioned.
However, one has to reckon with the possibility that the lack of a decisive western response to the war in Ukraine in February 2022 may cause the Russian Federation to attack NATO countries in a few months or years, after it has torn off the fragments of Ukrainian territory needed to create a natural connection with Crimea, and put the rest under the rule of a new puppet government in Kyiv. It is necessary to stop the dictator on the territory of Ukraine in accordance with the old theory of buffer zones created by the acolytes of Poland’s historical leader Józef Piłsudski. Back in the autumn of 2021, I proposed a “preventive war” against Gazprom in the form of solutions to shield Moldova against the energy crisis that Russia uses for political purposes. Now is the last moment to use the dependence of Russians on the European market for the sale of hydrocarbons to stop Vladimir Putin.
Excluding Russia from the SWIFT system is the only way to deprive Russians of foreign exchange reserves accumulated during the energy crisis, when the rising price of oil increased the revenues of their petrostates, a state dependent on the sale of barrels. Once excluded from SWIFT, Moscow will not be able to use these reserves. The University of Kiel has estimated that cutting off gas supplies to Europe may even bring an additional increase in the Gross Domestic Product of the European Union. The Bruegel think tank calculated back in 2014, that with the right determination the EU can abandon gas from Russia within a year. However, the same centre calculated in 2022 that stopping the supply of Russian gas would mean it would be necessary to start emergency gas supplies and reduce its consumption by industry and households. Deliveries from outside Russia have been organized by the US and the European Commission for several months. There is a Polish trace in these efforts as well. It is not by chance that the president of Poland together with PGNiG visited Qatar recently. Artur Lorkowski, a Pole, who chairs the secretariat of the Energy Community, has even talked about reverse gas deliveries to Ukraine. “The launch of additional supply routes to Ukraine and other member states remains the focus of the community,” the organization’s webiste said. This is the foreign dimension of the energy and climate policy of the European Union, with which Ukraine has been affiliated since 2011 (!) integrating the gas and energy markets as if these sectors had already joined the Union. This means Europe will come under pressure to ensure security of supply to and via this country, and it is no coincidence that Poland’s prime minister talks about a new delivery route to Ukraine. The oil and gas sector is also safe. PERN has reassured that Poland has stocks for several months. Lotos pointed to the crisis a few years ago, when oil was contaminated. Back then the Gdańsk Refinery was a window to the world, and despite the fact that oil was not flowing via the Druzhba oil pipeline, there were no oil shortages.
However, one should not pretend that a firm response to Russia’s conduct will not cost us. The energy crisis will deepen, and Europe will face several years of economic crisis. In result, the management of state treasury companies in Poland must enter a state of emergency. The strategic infrastructure of the state must be protected. All generation capacity, dirty or clean, should be secured to ensure maximum access to energy. All gas and oil assets should also be protected from hybrid activities by maintaining full treasury control. Consumers will feel this crisis in their wallets, and in the future it may be necessary to create mechanisms for rationing access to energy media. It is probably already necessary to prepare the public for this with appropriate communications, because after initial enthusiasm, discouragement will come, as in the pandemic, which, by the way, has apparently been used by the Russians as a ground for preparing an information operation now. However, the price of these challenges is lower than the one paid by Ukrainians who are currently being attacked by Russia, and lower than a possible Russian attack on NATO member states. This is also not as costly as extending Poland’s border to protect Ukraine’s territory, and in consequence its subjugation to Moscow, an example of which is the ongoing, quiet anschluss of Belarus. The time for sanctions is now.
