Putin Now Faces Threat of Real Sanctions

The Moscow stock market fell sharply on Friday, following the announcement that the United States and the European Union had expanded financial sanctions directed at Vladimir Putin’s political and business associates. Meanwhile, the credit-rating agency Fitch joined its rival, Standard & Poors, in downgrading Russia’s sovereign debt. With a rating of BBB, Russian government bonds are still regarded as investment-grade securities, but only just—and their yields jumped sharply in Friday’s trading, reaching almost 9.5 per cent. That means Putin’s government is already paying a modest price for its annexation of Crimea: since the start of the crisis, its borrowing costs have risen by about one per cent.

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