Biden is promising crippling sanctions on Russia if it invades Ukraine
LEILA FADEL, HOST:
When President Biden met with Chancellor Olaf Scholz in the White House yesterday, the German leader said the two countries were, quote, "absolutely united" on imposing sanctions on Russia should it invade Ukraine. But are they? As we just heard, after that meeting, Biden vowed that if Russia invades, they would stop Nord Stream 2, a gas pipeline that would link Russia and Germany. But Germany's chancellor did not commit to that. Let's talk this through with Daleep Singh, the deputy national security adviser for international economics for the Biden administration. He was in that meeting yesterday, and he joins us now. Good morning.
DALEEP SINGH: Good morning, Leila.
FADEL: So President Biden was quite clear that a Russian invasion would end this pipeline, but is that really up to him? How will the U.S. persuade Germany to halt its plans for Nord Stream 2?
SINGH: Yeah, you're right. The president was definitive. He said, as your listeners just heard, if Russia invades Ukraine, Nord Stream 2 will not become operational. Why did he say that? Well, we have options, and Germany has options. And when the president's answer was put to Chancellor Scholz, he said there's no daylight between Germany and the United States, and that we'll take all necessary steps together in a united and decisive fashion. And so I think, you know, a reasonable - a very reasonable conclusion from that press conference is that whatever is necessary to prevent Nord Stream 2 from becoming operational in the event of an invasion, it would be done.
FADEL: But Germany does have a lot of dependency on Russia for its energy needs. Did Scholz indicate that Germany would be willing not to approve the now completed pipeline?
SINGH: No. Look, I mean, I think the discussion we had, first of all, was to recognize that if Russia decides to weaponize its supply of natural gas or crude oil, it wouldn't be without consequences to the Russian economy. Remember, Russia has a one-dimensional economy. It needs oil and gas revenues at least as much as Europe needs its energy supply. Two-thirds of Russia's export revenues come from oil and gas. That's about half of Russia's budget revenues. So this is far from checkmate for Putin. This is a co-dependency.
But having said that, you know, look, if Russia decides to weaponize energy supplies, particularly gas through Ukraine, we've been working very closely with Germany and with Europe to surge capacity from other parts of the world - from Europe, from North Africa, the Middle East and Asia - and we think we're prepared to compensate for any shortfalls that might materialize.
FADEL: Now, let's talk about the measures the U.S. and Western allies might take if Russia were to invade. The U.S. has repeatedly threatened sanctions. So what exactly would sanctions look like - specific measures the U.S. is considering taking against Russia if it invades?
SINGH: Yeah. Well, the first thing I should say, Leila, is that our goal, of course, is for Europe to remain at peace and to defend the principle that you can't redraw borders or undermine the free will of a sovereign nation by force. But you can't achieve those goals unless you demonstrate resolve. So that's why we've said if Russia sends a troop or tank across the border, we're prepared to impose the most severe sanctions ever levied against Russia, and so are our allies and partners.
And maybe I can explain that by comparing our approach now to the past. I was at Treasury in 2014 and 2015. And back then, we moved gradually up the sanctions escalation ladder. And the reason why is we'd never before imposed sanctions on an economy as large and complex as Russia. So we moved in measured steps because of the unknown. We've learned a lot since 2014. We know where Russia's pressure points are. We know where we produce or supply something that Russia needs and can't get from anywhere else. So that's why instead of taking a gradualist approach, we're prepared to start with sanctions at the top of our escalation ladder and stay there. And that means we're prepared to target Russia's largest financial institutions, we're prepared to impose the most severe measures on those institutions and we're prepared to manage any unwanted spillovers.
FADEL: So does that mean the Biden administration is looking to cut Moscow out of the SWIFT financial system, isolate them in that way?
SINGH: Well, look, I'm not going to get into the specifics of our measures. Look, the decision of whether Russia invades Ukraine - it's up to Putin and, likely, Putin alone. And so we're prepared for any scenario that could unfold. And that means no option is off the table, even the most severe measures, because we don't know what's on the table for Putin. SWIFT is just one of those severe measures. You can think of it as the Gmail of global banking. It's how banks make or receive payments from other banks. About 11,000 banks are part of the SWIFT network, and Russia has aspirations to develop an alternative to SWIFT, but only about 12 foreign banks are actually part of that network and only one Chinese bank. So if a country is cut off from SWIFT, it's de facto removed from the global financial system, full stop.
FADEL: Well, let me ask you - I know you don't want to get into specifics, but in 2014, when this was threatened, Russia considered it equivalent to a declaration of war. Could this ultimately make matters worse if you engaged from the top of that scale?
SINGH: Well, look, I mean, I - this is a severe measure, no question about it. But, as I said, we're preparing for any scenario that might unfold. That's - the scenarios that unfold are ultimately based on decisions that Putin will make. And so we just have to have all of our options prepared. And we should - we need to be ready to respond in any scenario. Of course, we don't want to have to use the most severe sanctions, but we also don't want there to be unchecked aggression in the heart of Europe.
SINGH: So that's the situation we're in.
FADEL: Now, President Biden has been working with NATO allies to ensure a united front in response to Russian aggression. How important is European cooperation in imposing meaningful sanctions on Russia?
SINGH: Oh, it's critically important - No. 1 in terms of the direct impact. As I said, the logic of our sanctions and our export controls is that we design or produce goods or services that Russia needs and can't supply from anywhere else, either domestically or from other foreign suppliers. So when you combine the U.S. and Europe, you're talking about the vast majority of the global capital markets and the most sophisticated technologies that are out there - semiconductors, quantum, biotech, AI. And so, look, it's important in terms of direct impact. It's important in terms of the indirect impact, this signaling that we're together, unified to defend core international norms of sovereignty and territorial integrity. And that's a force multiplier.
FADEL: Is Putin himself a possible target of sanctions if Russia invades?
SINGH: You know, here, I just would let the president's words stand for themselves, and I would repeat that no option is off the table.
FADEL: Daleep Singh serves as deputy national security adviser for international economics. Thank you so much for your time.
SINGH: Thank you.
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