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Crunch Time for Europe's Economic Sanctions

Virtually any additional sanctions against Russia would entail an economic cost for Europe, which is why the European Union is dithering. As the economic conflict with Russia enters a hazardous new phase, can Europe’s leaders hold their nerve?

PARIS – In 2003, the conservative US pundit Robert Kagan famously wrote that Europe “is turning away from power; it is moving beyond power in a self-contained world of laws and rules.” After Russia invaded Ukraine in late February, the European Union decided that it was time to prove Kagan wrong. The EU has mobilized economic power, at least, against Russia’s military aggression, and deployed an array of monetary, financial, trade, and investment sanctions.

Europe’s swift and muscular reaction has rightly been hailed. The shock effect of freezing much of Russia’s foreign-exchange reserves was spectacular. But as the war continues, will the sanctions remain effective? And if their impact weakens, as seems likely, will the EU be able to step them up in a meaningful way?

A worrying sign is that after the EU’s decision on March 15 to ban imports of steel and exports of luxury goods to Russia, there were no further announcements at the leaders’ meeting on March 24. Europe will not force Russian President Vladimir Putin to back down by depriving Russian oligarchs of the latest Ferraris and Louis Vuitton handbags.