Sanctions talk show on Lanz: How the West is filling the Russian war chest

When FDP defense expert Strack-Zimmermann and former Left Party leader Bartsch sit down with Lanz, a confrontational discussion is to be expected. But then an economist chimes in. And the other guests are speechless.

On Wednesday evening, something rarely seen happened on Markus Lanz's ZDF program: The guests from the Left Party and the FDP were in agreement. For just under five minutes. First, they addressed a motion of no confidence against EU Commission President Ursula von der Leyen. A right-wing member of parliament from Romania accused her of a lack of transparency and mismanagement in connection with the procurement of masks during the coronavirus crisis. The motion has no chance of success, but could damage the reputation of the EU Commission as an institution. That is the goal of the right, say FDP MEP Marie-Agnes Strack-Zimmermann and former Left Party leader Dietmar Bartsch in unison. They also agreed in their criticism of Chancellor Friedrich Merz's broken election promises.

This is all over again when it comes to Europe's defense capabilities against possible Russian attacks. While Strack-Zimmermann welcomes the European rearmament because only from a position of strength can one negotiate with Russian President Vladimir Putin about an end to the war in Ukraine, Bartsch criticizes the quadrupling of the defense budget over the past twenty years. Bartsch demands that the Bundeswehr not be allowed to get bogged down again in projects like the missions in Afghanistan or Mali. This is where Strack-Zimmermann gets really angry: "Mr. Bartsch: Things are heating up in Ukraine, and they're talking about Mali. My goodness!"

Poor sanctions

Economist Benjamin Hilgenstock also knows: A war only ends with negotiations. However, Russian President Putin is not prepared to do that, he says. Sanctions could exert pressure. The European Union now wants to tighten sanctions against Russia again, for the eighteenth time. "The sanctions so far have had a clear impact on Russia," says Hilgenstock. "The Russian economy is not in an easy situation." But Europe has not yet done enough. Hilgenstock: "If we do not enforce effective sanctions against Russia, more effective sanctions than are already in place, then it will be very difficult to provide Ukraine with enough money and weapons to defend itself against a Russia that has unlimited opportunities to further arm itself and prosecute this war."

Russia is able to do this, among other things, because European countries have imported liquefied natural gas worth €37 billion from Russia since the beginning of the war. Hilgenstock explains: "There is simply no political consensus in Europe for further sanctions in the energy sector." According to Hilgenstock, European countries buy oil and gas that comes to Europe via pipelines. Liquefied natural gas is transported by ship. Oil and gas are now only delivered to Hungary and Slovakia. Liquefied natural gas, on the other hand, ends up primarily in France, Spain, Belgium, and the Netherlands. From there, it is further distributed, including to Germany. "As far as Russian gas is concerned, there are virtually no sanctions. Because in the EU, sanctions, at least when implemented within the framework of the common foreign and security policy, must be decided unanimously."

What the economist describes is exactly what the EU decided in 2022. At the time, they didn't want to sanction the amount of Russian gas and oil, but instead introduced an oil price cap. Hilgenstock: "As long as Russian oil is transported with the participation of service providers from G7 countries, this oil falls under the oil price cap and must be sold at a certain price. This was set at $60 per barrel." When oil is transported by other service providers, Russia sets the prices. Russia uses its shadow fleet for transport: "Russia has purchased a fleet of ships that has no connection to G7 countries," Hilgenstock says. The EU states have sanctioned the shadow fleet: its ships are no longer allowed to call at EU ports. But now the EU still has to solve one problem. Hilgenstock: "How do you ensure that these ships no longer manage to stay in operation on their way, for example, from Russia to India?"

"When I heard about this sum of 37 billion euros, I too was shocked," admits Marie-Agnes Strack-Zimmermann, who has since become very thoughtful. She criticizes "that we, the West, are pouring more money into the Russian coffers than we are simultaneously providing funds to the Ukrainians. And that is the height of bigotry." The EU Commission is now considering how to sanction countries that take this path.

Half-hearted action increases the cost of war

Economist Hilgenstock counters that some efforts have also been made to harm Russia. While it is possible for Russia to import certain components from Europe, they do so at a very high price. For example, Russia pays drastic markups for deliveries from China or Turkey compared to the global market. Hilgenstock speaks of several hundred percent for components from the West, which are used, for example, in drones – drones that, among other things, are devastating the Ukrainian capital Kyiv.

At the same time, however, Russia earns substantial sums from its exports. For example, Russia earned approximately $230 billion from oil and gas exports last year. According to Hilgenstock, these exports go not only to Europe, but also to India and China. "One thing is clear: If you implement a sanctions regime that says from the outset: We'll allow Russian oil onto the market because we're legitimately concerned about global energy prices, then that limits the potential impact of the sanctions from the outset."

Hilgenstock sums up the problem: Europe is not willing to bear the higher costs of stricter sanctions, but must provide Ukraine with more money for its defense.

Without Western-made materials, Russia would hardly be able to wage war, explains Hilgenstock: "When it comes to high technology, navigation technology, communications instruments, AI chips, there's no way around Western products." The EU's new sanctions package contains some good measures, says the economist. "But ultimately, this sanctions package is not what Chancellor Merz and other heads of state and government promised in Kyiv a few weeks ago. They promised drastic sanctions, but they are not drastic sanctions." Expectations have simply been raised too high.