Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

To pressurize Iran, the United States had developed a ferociously effective regimen of sanctions. Russia as a globally integrated economy was far more vulnerable. Not only did Russian businesses need to export but they had supped deeply at the trough of cheap dollar credit. By early 2014 they owed $728 billion.49 But by the same token, large vested interests in the West were at stake. Apart from anything else, Russia was the number two supplier of oil and gas exports to world markets. At a time of extreme fragility in the emerging market economies, the United States did not want to precipitate further tension in commodity markets. To the frustration of the hard-liners, the United States stayed its hands and never applied the full force of its sanctions weapon. Instead it targeted individual members of the clique close to Putin, the most prominent of whom was Igor Sechin, the boss of oil giant Rosneft.50 Furthermore, Washington limited access to capital markets for key corporations—Rosneft, Novatek, Gazprombank and VEB.51 This was painful, but given the limited volume of US-Russian economic relations, it was far from decisive. The crucial question was whether Europe would throw its weight behind America’s sanctions. Russia-EU trade was ten times larger than Russia-US trade. The EU received 41 percent of all Russia’s exports. This gave the EU considerable leverage, but also meant it had more to lose. German corporate leaders and senior politicians, such as ex-chancellor Gerh...