ECONOMIC sanctions are a two-edged sword, hurting those who impose them as well as those they are aimed at.
Germany for example, with its sizeable purchases of Russian gas and almost as large sales of manufactured goods to Russia, will feel plenty of pain if the economic sanctions on defence, energy and financial transactions agreed by the EU in an effort to rein back Russian meddling in Ukraine last for any length of time.
And although it is commonly supposed that financial sanctions may also hurt those in the City of London who deal with Russian oligarchs’ wealth (few will shed tears over that), the half-yearly report by RBS shows that the hurt will be felt closer to home as well.
In essence, the bank is having to curtail its lending to Russian businesses and banks.
Since it has about £2.1 billion in loans and other assets in Russia, upon which it is presumably making a profit, pulling back will result in lost earnings and profits which adds up to further delay to its restoration as a private business.
RBS is not complaining about that. As the UK government, which has been a leading proponent of sanctions against president Putin’s government, owns 81 per cent of its shares, it could hardly do other than dutifully implement the letter and spirit of UK wishes.
It is a salutary reminder that halting Mr Putin’s aggressive expansionism and bullying adventurism is not just a matter for governments.
It requires a united effort across all sectors of society – political, commercial and civic – and an acceptance that this entails some penalties. It is the only way that such non-military pressure can succeed.