Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

In July a vigorous offensive by Ukraine’s forces was on the point of overwhelming the Donbass rebels. Moscow’s response was to resupply the breakaway militia with heavy weapons. A conflict of small-scale skirmishes was escalating into a more or less openly declared war involving the mobilization of tens of thousands of men, mass displacement and thousands of casualties. On July 17 a rebel antiaircraft battery armed with new Russian missiles jubilantly reported that they had shot down a heavy transport plane. It turned out to be Malaysian Airlines flight MH17, with 298 passengers and crew on board. It was the moral indignation in the aftermath of that outrage that enabled Merkel to push through a much stronger sanctions regime. The EU blocked the export to Russia of any military equipment, oil industry equipment and the issuance of long-term debt in the EU by Russia’s state-owned banks and energy corporations. The United States doubled down by restricting access to capital markets for Sberbank and pressuring ExxonMobil and BP to drop their collaborations with Russian energy partners. But the real thrust of twenty-first-century sanctions was financial. By September 2014 Rosneft, Transneft, Gazprom, Novatek, Sberbank, VTB, Gazprombank and Bank of Moscow, along with arms makers United Aircraft Corporation and Kalashnikov, were all locked out of Western financial markets. Two of the banks most closely linked to