ECB: capital flight from Russia has hit $220bn

[Benton D Struckcheon]

Source: The Telegraph (UK)

The European Central Bank says capital flight from Russia since the Ukraine crisis erupted may be four times higher than admitted by the Kremlin, a clear sign that sanctions pressure is inflicting serious damage on the Russian economy.
Mario Draghi, the ECB’s president, said the outflows from Russia have been large enough over recent weeks to push up the euro exchange rate, complicating monetary policy for the ECB.
“We had very significant outflows that have been estimated by some to be in the order of €160bn out of Russia,” he said, without specifying where the information came from.
This is equivalent to $222bn. It is the highest figure suggested so far by a senior official with access to confidential data. The Russian finance ministry said outflows had been just $51bn in the first quarter, though the total has almost certainly risen since then.

Read more: http://www.telegraph.co.uk/finance/financialcrisis/10817511/ECB-capital-flight-from-Russia-has-hit-220bn.html

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I wonder what would have happened had Obama's sanctions been serious? I mean, according to everyone, they were a laff riot.

[jakeXT]

1. Gazprom and all banks would be a next step

But Russia’s state-owned energy complex can fight back, hard. Both U.S. and European sanctions stopped short of targeting Gazprom, which provides 30 percent of Europe's natural gas, and its CEO, Alexei Miller.

“Gazprom could become a target, but the escalation in Ukraine would have to be dramatic. It would be very easy for Gazprom to retaliate,” Kirkegaard said.

That’s a possibility very much on the minds of European business people, not just those, like Moratti, who have a direct partnership with Russian entities. “Raising sanctions to the next level would complicate everything, contributing to a possible escalation of the conflict in Ukraine,” said Altomonte, the economics professor.

The next round of sanctions could instead focus on more individuals and the financial services sector, analyst Kierkegaard said: “It would be a very potent threat. The U.S. can isolate Russian banks more or less unilaterally, and that option would be quite convenient for Europe as well.”

http://www.ibtimes.com/gian-marco-moratti-italian-oil-magnate-who-does-business-putins-top-ally-igor-sechin-says-1581325

[Benton D Struckcheon]

2. If it comes to that it'll be Rosneft most likely.

Oil is much more easily replaced than gas. Gazprom has been deliberately avoided, and that will probably continue.