President Joe Biden said the U.S. will impose sanctions on Russia that will hamper its ability to do business in foreign currencies as President Vladimir Putin’s decision to invade Ukraine sparked the worst security crisis in Europe since World War II.
Biden promised to inflict a “severe cost on the Russian economy” in a speech from the White House on Thursday, hours after Russian tanks, troops and aircraft pushed through Ukraine. Russian forces neared the capital city of Kyiv and officials warned it could fall within hours.
Biden announced that the U.S. would sanction Sberbank — Russia’s largest lender — and four other financial institutions that represent an estimated $1 trillion in assets, as well as a broad swath of Russian elites and their family members.
The United States and its allies will not bar Russia from the Swift international banking network because Europe does not want to undertake that action, Biden said. But the sanctions imposed Thursday against major Russian banks should have a similar effect and limit Russia’s ability to do business in dollars, Euros, and pounds, he said.
The U.S. also plans to impose new restrictions on Russia’s largest state-owned enterprises that will prohibit them from raising money from U.S. and European investors, Biden said.
The U.S. leader said sanctions were a long-term tool to pressure Putin and were never expected to prevent an attack. The penalties will “take time,” adding “he’s going to test the resolve of the West to see if we stand together and we will.”
But in launching Russia’s most sweeping military action in more than 70 years, Putin has defied global condemnation and new rounds of sanctions. Putin has threatened other countries that may interfere with his Ukraine offensive with historic consequences.
Putin’s audacity is a troubling development for Biden and European allies. The stakes are high for Biden, who has promised to uphold the post-war geopolitical order that Russia’s offensive now threatens.
To cushion the impact of the conflict and fresh sanctions, Biden said the U.S. is coordinating the release of strategic petroleum reserves with oil-producing and consuming nations around the world.
