get up every morning to protect your freedoms and secure our country and >> today's program relies on

sanctions. let me briefly discuss the who, what and why for today's event. we are hosting an event and viewing the unprecedented sanctions taken against russia by the u.s. and other ukrainian allies in response to the russian invasion of ukraine. we commissioned nine papers from leading sanctions experts where we asked them to present their best ideas for improving sanction all essay. we received incredibly thoughtful and creative proposals. for example, joe stiglitz advocates the seizure of russian central bank reserves and craig kennedy and simon johnson tightly discussed ways to tighten the price cap on russian oil exports. olivia blanchard outlined the slate for policymakers. the essays have been posted on

the brookings website this morning and i encourage everyone to take a look. following remarks from our keynote speaker, we will hear from experts that will provide reaction to the address and give their take on the nation's efforts to date and offer reactions to draft proposals released this morning. that's the what now here's the why. it's pretty simple actually. with the proliferation of sanctions and economic tools, it's important to take stock of these actions and ask if they are achieving their intended goal. are there unintended consequences? can policymakers do better? these are not new questions. in the book the economic weapon about sanctions over the past century, the author says the policy debate about sanctions has been repeated almost every decade since the league of nations was created in the wake of world war i. at its core has been the question -- do economic sanctions work? the author is skeptical claiming it is clear the potential of

sanctions is a history of disappointment. regarding u.s. actions against russia, i'm personally more sanguine. my reading of the collective sanctions that they have had sharply degraded -- they have sharply degraded long-term russian economic capacity inflicting pain on russian households and businesses, capital human and financial have fled the country in droves as has western companies that previously fueled much of the country's production. foreign direct investment has plummeted. two years into the new sanctions regime, the russian economy is 5% smaller than predicted prior to the invasion. the only reason the economy is not entirely cratered is because of an unsustainable wartime push for military production. in short, i simply would not bet on the russian economy in the foreseeable future. of course, you will hear from other experts today and see whether they agree with this assessment. that's the wide never hears those who.

in a moment, we will hear from the deputy national security advisor for international economics. this is his second stink in the position during the biden administration and it's one of the most important economic policy roles at the white house. he played a pivotal role in implementing sanctions against russia while serving as the sherpa to the g7 and g20. in between his stints, he was a chief economist in fixed income and he was executive vice president and head of the markets group at the new york fed and served as acting secretary for domestic finance in the treasury department among many other roles. both from his resume and my own first experience, i can tell you he's incredibly brilliant person and i look forward to hearing from them today. join me in welcoming him to the permit -- to the podium. [applause]

>> i want to thank brookings for hosting this event and to my friend and colleague for inviting me here in bringing together so many friends from the world of economics and national security to borrow from the 20th century philosopher george kryst answer, these worlds are colliding and at the intersection is my job is deputy national security adviser for international economics. thanks for being here. i was serving in my current role -- when president putin launched the invasion of ukraine in 2022. prior to this tragic decision, national security advisor jake sullivan had marshaled the team across the u.s. government and worked with allies every day for month so that within hours, we were ready to move in lockstep with almost 40 partners to enact the most comprehensive sanctions taken against a major economy. i left government later that

summer knowing our work was far from done and earlier this year, i return for the strong sense of unfinished business. i appreciate this chance to take stock of our efforts. also what our efforts show about the power but the limits of sanctions as a foreign policy tool. even as russian tanks rolled in the ukraine, it was no sure thing we could convince our partners to collectively impose severe sanctions on russia. a permanent member of the un security council, leading nuclear power and a top energy exporter deeply integrated in the global economy. it was president zelenskyy's address to european leaders when he said it might be the last time we saw him alive that generated the emotional ballast needed for action. before the weeks and, we had sanctioned russia's largest banks and state enterprise than cut off the kremlin from leading-edge technology and mobilized more than $300 billion of russian assets. in some ways, this was the shock

and off phase of the campaign but so much of what makes sanctions work is stamina. it's the grinding and painstaking effort to face the worst. with that context in mind, i'd like to distinguish between myths and realities of what our sanctions are achieving and where we might go from here. number one, sanctions didn't work because it didn't prevent russia's invasion. i've said many times the best sanctions are those that never get used sometimes a credible economic threat can produce a worse economic reality we understood president putin was likely on a preset course [drill sound] [inaudible] >> interesting timing. we understood president putin was likely on a preset course to invade ukraine again long before

february, 2022 both from his repeated claims and his recurring pattern of aggression. even so, we made every effort starting with president biden and jake sullivan to shape putin's expectations about the cost of prosecuting this war by signaling in public and sharing in private our readiness to collectively impose the most severe sanctions in our arsenal. deploying these measures preemptively would have only broken unity with our partners and given put in the guise the united states never had a genuine intention to preserve the peace. once the invasion began, the objectives for sanctions had three dimensions, to raise the immediate cause for the continuation of the war, degrade russia's ability to project power over the medium-term and to deter other would-be aggressors over the long run. it bears repeating that in pursuing these objectives and evaluating our success, sanctions are just one tool embedded in a broader strategy

to arm ukraine's fight for freedom on the battlefield and lessen the global spillovers from putin's war, to wean europe from its reliance on russian gas and to finance russia's ukraine's economic future as a successful return it to to russian autocracy. that includes unlocking the value of the assets we mobilize. this is a topic i will return to. executing on each of these fronts is what gives us our best chance of shaping prudence calculus and staying the course is how we create strategic leverage for ukraine. as for the proximate effects of the sanctions, reasonable people can disagree about whether we struck the right balance between imposing costs on put my limiting spillovers to the global economy. certain macro indicators in rush are many than -- are better than many projections at the start of the invasion. indicators of russian resilience are a façade. they mask the reality that russia's prospects are bleak to

prevent the collapse of the economy in the short run, putin has sacrificed russia's long-term potential in three important ways. first, capital controls limit of the flow of money out of russia helping to prevent a freefall on the ruble and a collapse of the financial system. at the cost of limiting the flow of goods and services coming into russia and reinforcing its isolation from the global economy. import from coalition countries are down almost three quarters since 2022 including a drop of almost 95% critical to russian weapon production and the comparable percentage of imports in the advanced technology sectors of ai, semiconductors and biotech. second, putin's decision to weaponize russia's energy supply did drive a spike in oil and gas prices in 2022 that contributed a record russian trade surplus and flattened its gdp growth in the short term but at the cost of potentially losing its market share by the end of the decade.

once russia's most profitable company, the gas company reported a net loss in 2023 at its first since 1999 due to the dwindling gas trade with europe. lastly, russia ramped up government spending to is much percent of gdp which is a post-soviet record. fueling the war economy with government spending cushioned the contraction but at the expense of depleting russia's economic buffers and undermining putin's ambitions for diversified and productive group. since the start of the war, the liquid portion of the national wealth fund has fallen by nearly half. defense outlays in the budget of a most triple from preinvasion levels to roughly one third of the total while the chair spending on the mystic infrastructure and education has been frozen resulting in a real cut to multi-decade lows. tanks and mortars don't raise living standards, they destroy lives and livelihoods. inflation and benchmark interest

rates which have risen to 8% and 16% respectively both more than doubled the g20 median. inflation and interest rates will inevitably choke off russian growth. loss of access to the world's leading financial centers, cutting-edge technology and many of the largest energy consumers. so will the immigration conscription over one million citizens from russia. many multinational companies will exit. less technology and less talent will get up less productive russian economy for a generation too common it should be remembered as another tragic consequence of putin's war. russia is adapting and innovating around our sanctions and export controls and we can't keep up? sanctions are like antibiotics. repeat usage built up resistance. it's not surprising that russia's making every effort to circumvent our sanctions. it's inevitable. these efforts are not cost less.

russia near cousin need to adapt and reorient the supply chains creates an efficiency -- inefficiency and complexity by dumping pounds of sand into the gears of russia's war machine, we're forcing the kremlin to rely on more elaborate and expensive procurement networks. despite the near tripling of russia spending on defense since the invasion, the import of key components as fallen by roughly one third. shortages of g-7 origin electronics and the depletion of stockpiles are forcing russia to rely on less reliable alternatives. nearly 40% of the lagging semiconductors that china provides to russia are defective. countries that continue to trade with russia and sanction goods are charging a state bring them do so, perhaps more than 60%. we are adapting as well. in the geopolitical economy of sanctions, standing still means you slip behind the tickly when the target has transformed its economy into a factory of war.

that's why nearly every day since the invasion began in 2022, jake sullivan has convened a team of experts in dogged pursuit of matching circumvention with countermeasures. it's why we have impose sanctions and export controls on over 4500 individuals and enemies, many of which are front and shell companies and intermediaries and service providers in russia that did not exist prior to the invasion but are emerging as a shadow production network. we know circumvention networks will continue to evolve. necessity is the mother of invention. our vision is to replicate the sophistication of the financial sanctions architecture, process that took decades to build after 9/11 and the enforcement of our controls for goods and technology at a fraction of the time. i don't want to sugarcoat the challenges and risks involved. we are facing the sobering potential for russia's military-industrial complex to grow stronger than it was before the war. and it will directly threaten

europe. meeting this challenge will require intensification of several efforts underway. first, our monitoring capabilities are improving with more personnel and the application of new technology including big data analytics and ai tools that help us map critical supply chains and spot anomalies faster and with greater fidelity but will undoubtedly need more resources. the budget for the unit charges implementing export controls at the department of commerce and has remained flat despite the expansion of controls to thousands of items destined for russia. we are strengthening institutional conductivity with regulators and international partners. 39 countries have joined the global export control coalition and impose similar export controls in goods and technology to russia and together with the eu, japan and the u.k., we develop a common high-priority list of harmonized information that exporters, shippers and financial institutions need to

conduct due diligence. we also recognized an increasingly adversarial political environment, the legacy approach to consensus-based coordination export controls needs a refresh to meet the new realities. we will keep pushing creative approaches to address these gaps. we are deepening cooperation with u.s. industry as well, sharing actionable information on high risk suppliers suspected trans shippers and product flows , exporters are using this information to improve the red flag systems and inspections especially for dual use items going to high risk jurisdictions. i want to issue an urgent call for corporate responsibility. the percentage of russian battlefield weaponry with u.s. or allied branded components is are alarmingly and unacceptably high. put your creativity and resources to work. know your customers and know their customers and no the end users. ensure that american firms are not unwitting because of russian

autocracy. were looking to expand their own authority c2 recognized that russia is shifting its entire economy to a war footing. it's a develop and punctuated by the employment of an economist and defense minister. in this regard, we are actively slurring options to broaden the definition of financial -- financial stability in our financial regime and the scope of her export controls for u.s. origin or u.s. branded products. u.s. sanctions have driven russia and china closer together. many observed that our sanctions and export controls have pulled russia and client -- and china closer together. this confuses symptoms with root causes. the decision to invade and terrorize ukraine and russia and china's choice to enable prudence war are the root causes. we think it's a losing bet for both. russia once had open access to global pools of capital and the

most cutting edge technology. now it's utterly reliant on china, giving beijing enormous leverage or russia's ability to project power and exert influence. 90% of semiconductors and microelectronics importer by russia in 2023 were shipped via the p.r.c.. 70% of its machine tools came from china in q4 of last year. it may be a partnership without limits but only time will tell. it's increasingly without symmetry. china accounted for over half of russia's imports and more than one third of its exports in 2023. russia makes up only 3% of china's exports and 5% of china's imports. there are growing risks and cost to china from the partnership as well. well china and russia trade is increased, china is aware that its combined goods trade with the u.s. and the eu was almost seven times larger than that with russia in 2023. china has a stated interest in being a responsible stakeholder

on the global stage. it therefore has little to gain and much to lose from russia's intensification of the war which is driving up energy and food prices across the developing world while causing profound reputational damage to the commercial relationships it needs at a time of domestic weakness. we have no desire to disrupt all trade between russia and china. we and our partners are prepared to use our sanctions and export controls to prevent the trade of goods and technologies that threaten our collective security. it's worth noting the drop in p.r.c./russia trade sense that china expanded the ability to target financial institutions. these authorities may expand further. we failed to make the case on the shank -- sanctions regime to the rest of the world? though we are acting together with nearly 40 allies and partners to defend principals at the heart of the u.n. charter, we should reflect on the reality

that most countries have not joined in the sanctions and for controls we placed on russia. some leaders have raised concerns that our sanctions won't be effective in changing the calculus of president putin. others have suggested sanctions are in religion at the brute economic force. some of these arguments remain in bad faith by leaders who refused to condemn russia's war at all nonetheless, they deserve a fair hearing. the force of sanctions greatly depends on the size of the coalition upholding them. we should continue to put serious effort toward developing a doctrine of economic statecraft that lays out clear principles for employing restrictive tools to ensure these tools are used sparingly. avoid unnecessary spillovers, retain flexibility, surpass a threshold of efficacy and allow for maximal coordination with partners that can be sustained and are designed with a sense of humility toward their consequences some of which are on perceivable.

laying down such a doctrine can help reassure other countries that the united states is the world's leading economic power and will not fire its economic weapons in an arbitrary or reflexive manner. it would enhance the credibility of our conduct area having said this, we would never expect that every country will be in a position to formally join in the actions we and their partners are taking against russia. sometimes, the measure of sanctions, one that by definition will never make headlines is what's not happening because of the chilling effect of our actions and warnings. the banking relationship and trade ties that don't exist, the investments that weren't made, the front companies that were not created area is why we engaged a broad range of companies well outside our formal coalition in ways that aren't meant to be publicized with specific evidence of circumvention. why we may not always highlight the success stories from sanctioned diplomacy, evidence of a pullback from russian counterparts is plain to see

from eurasia to the gulf to south and central asia. myth five, or coalition won't implement tough sanctions on russia because of the spiking global energy prices in europe. this has been one of the hardest challenges we've had to confront. russia doesn't have substitutes for our coalitions financial markets and technology but the dependency cuts both ways and it comes to fossil fuel supply at least until our energy transitions further underway. in the early weeks of the war, we simultaneously cut off imports of russian energy exports and surged global supply with releases from our strategic reserves. we saw the risk that in a tight global market, the impact of quantity restrictions could be offset by price increases that would translate into a net benefit for prudence revenues and drive up global inflation. for this reason, we now have both the g7 important than on russian seaborne oil and price gaps on crude oil and petroleum

products when g7 services are involved or the lever to enforce these caps come from the dominant u.k. and eu position and global shipping, service is prohibited unless there is verification the oil is being sold below the cap. our judgment is that the price cap alongside our import fan and other sanctions have collectively reduce russia's earnings. russia's oil tax revenue dropped nearly 30% from 2022-2023 in part due to the sanctions. when russia took action to evade the price cap, we tightened enforcement and we can take further action to increase the cost of russia using its shadow fleet. energy analyst and russian officials themselves have blank their increased disk -- discount of russian oil. russian export volumes have remained high avoiding the price spike demand in. the price cap was the product of compromise and it is complex to enforce.

stepping back, i would argue it provides a powerful template in an increasingly weaponize global energy market. the last myth, mobilizing russia's sovereign assets would be a generational mistake. let me close where i started. two days after russia's invasion in february of 2022 and together with our partners, we took the historic decision to immobilize russia's sovereign assets held in our jurisdictions. market participants were not expecting this decision and neither was the kremlin. they did not expect a step would be taken by the world's most prominent reserve currency issuers. despite its shock value and its considerable risk involved, the decision did not lead to an appreciable shift away from g7 currencies. more than two years later, at a moment of great peril for ukraine, our leaders have the opportunity to generate the financial return at scale from the risk already taken. the need is clear -- even after

taking account of the u.s. supplemental package and the eu's 50 billion euro facility, ukraine still has a sizable external financing gap over the coming years if the work continues in military spending remains steady. g7 summit represents our best opportunity before november to close this gap. we want to deliver an unambiguous signal we will not be fatigue will maintaining unity without violating any jurisdictions rule of law. there are risks involved with mobilizing these assets. the policy is about trade-offs and the much greater danger in this moment would be to leave ukraine insufficiently financed to fight for its freedom and allow one of the most egregious violations of international law in recent history to go unchecked in the heart of europe area to test the precedent that would set in the chilling effect it would cause, the app -- the economic instability it might trigger and the signal it would send would be aggressors across the world are the costs we find

unacceptable. we can be on the right side of history while being humbled by the uncertainties of taking this step. for the united states, it should only stiffen our resolve to shore up the competitive advantages that gave rise to the potency of our sanctions regime in the first place. the primacy of the dollar, the integrity of our institutions, the dynamism of our capital markets khmer capacity to innovate, the unmatched purchasing power of the american consumer, our net exporter status and energy and food, or unrivaled network of alliances and institutions khmer ability to attract ideas and talent and goodwill from us the world and most of all, the power of our story and trust in our leadership as a faithful steward of international order, thank you. [applause] >> in the middle. >> thank you very much for that

incredibly comprehensive account of sanctions. let me ask you a simple question -- i'm convinced that sanctions are causing pain to russia and i will buy your argument that we are long-term degrading the capacity of the russian economy to deliver goods and services to its people. but why should i believe that sanctions are having any effect on prudence behavior given what we see on the ground in ukraine? >> david, when i think about this question of the efficacy of our sanctions regime, i think it has to be said that they are one tool in a broader strategy to number one, change cutin -- prudence calculus of continuing this war number two, to give ukraine strategic leverage to ensure just and sustainable peace if and when it decides to pursue a diplomatic settlement. that's the only way this war will end.

would i love to cut off all of russia's energy export flows? or put those receipts into escrow? and because russia to fall into twin deficits for his current account and budget? and force the balance of payment reckoning? yes, of course. would be great to unplug china as a factory of russia's war machine overnight? of course. you have to remember that we are implementing sanctions in a very complex political and geopolitical economy. the actions we are taking are also meant to preserve unity and be sustainable. there are multiple objectives we are trying to solve at one time. if they -- it would feel good to have economic shock and all all the time. the spillover effects and secondary consequences be damped that that wouldn't be the best long-term risk-adjusted strategy for unity and it wasn't sustainable.

the other point i would make on efficacy, a lot of people judge our sanctions relative to an exposed geopolitical objective like have putin's troops withdrawn from ukraine? those were not the proximate objectives of sanctions. what we have to think about is sanctions were made to the geopolitical events that followed and they have to be weighed against the counterfactual of the next alternatives. those alternatives have to be judged in terms of a conflict that plays out over multiple stages with multiple players and across multiple dimensions. to me, that's the fair assessment whether these sanctions were, what were the alternatives? the last one is putin's reaction function which is what you're getting at. with time and distance, i reflected a bit on whether we've influenced it. the truth is, his revealed

preference to think about this invasion much like an 18th-century lamb gabbing sorry tradition of peter the great or catherine the great. when he cares about most is what's happening on the battlefield. while i believe strongly we are causing profound long-term economic damage to russia and therefore his political standing, we have to understand that it's probably a distant second in terms of his consideration. i i think sanctions are doing its job relative to the objections we set, and also when viewed in the context of an autocratic with an 18th-century reaction function. david: ok. i have a question on every single sentence of your speech, and we don't have time -- [laughter] so i wanted to focus on one. you talked about broadening the definition of financial

facilitation and extending sanctions from not just u.s. origin product, but u.s.-branded products. what are you trying to tell us there? daleep: russia has adapted, as i mentioned in the speech, necessity is the mother of invention. circumvention networks are alive and well, and we have got to match every circumvention with a countermeasure. i'm going to leave it there. let me put it this way -- if russia is shifting its entire economy to a war footing, then does it make sense to restrict financial facilitation to a handful of sectors, or to a certain number of products that are u.s. origin, when we know that transshipment is the main way that russia is continuing to receive critical components to give it battlefield advantages in ukraine. to my mind, to our mind, that would be a mistake. it is time to adapt. david: does that mean you are

considering with our allies secondary sanctions? daleep: it means whatever you think. [laughter] david: ok. so in the papers we commissioned, there is an interesting tension. one set of people say we ought to make it much easier for capital flight from russia, we ought to let everybody who has $10,000 in a russian bank take it out, the current account deficit, weaken the ruble, cause inflation, etc. the other set of people say we just need to isolate isolate isolate. as you pointed out in your remarks, there is always a trade-off. how do you see that trade-off? daleep: initially we were try to induce as much capital flight as possible, with the initial shock of the measures renounced, we were trying to engineer a freefall in the ruble, which would cause inflation to spike, which would dent purchasing

power of russian consumers, it would cause the central banker raise interest rates to emergency levels that would drive investment, and he would have a negative feedback loop, the velocity would be determined by putin's willingness to escalate. he chose to arrest that feedback loop with capital controls. the question is whether you can overwhelm those capital controls. if you could and return russia to that vicious feedback loop, that's worth considering. but i'm doubtful you can. david: because of the capital controls? daleep: yeah. david: finally, before i turned to the audience, can you lay out this doctrine of economic state grab? how is it going to be expected the public, the world, what our strategy is? daleep: thanks for asking. we are closer to the beginning than the end. it has taken hundreds of years to develop a doctrine of

military force and it is still evolving today. we just started the process of thinking about how to design the doctrine of economic statecraft. we've gotten principles of rules of engagement with a code of conduct, with an analytical infrastructure, an organizational model fit for purpose. i think it is vitally important -- look, we are in the most intense period of great-power competition in decades, our debris seven years. today's great powers are nuclear powers, and that means barring catastrophic discussion, direct confrontation -- catastrophic ms. cognitio-- miscaluclation -- we have a lot of work to convey to the road the guiding principles that constrain the use, that we are not going to fire these weapons in a way that is arbitrary or reflexive. we have to do a lot more work to

build an analytical infrastructure that is fit for purpose, that really understands the limitations, the spillovers, and the efficacy of sanctions when they are used in a laterally, multilaterally, ex ante to a trigger event, ex post. we have to build the muscle of simulating how our use of restrictive tools will play out in a multiplayer, multistage contest. we have got to change the organizational culture in some ways of how we connect statecraft. -- conduct statecraft. if every government bureaucracy you are at risk of lazy narratives and having blind spots, not thinking across the entire probability distribution. things that i've never happened are happening all the time. that is a cultural shift. ultimately the most important thing to my mind, more important than principles and analysis, is conduct. i do think we need to have more balance in our conduct of economic statecraft.

what i mean is we should convey a standing preference to use economic tools and offer the prospect of mutual economic gain, rather than feed a very damaging perception that our marginal unit of time and energy is focused on designing tools of economic pain. i'm talking modules like debt relief, infrastructure finance, trade agreements. these are the kinds of tools that each have, i would argue, the potential to forge a more enduring alignment with countries that are skeptical of our use of economics to craft. i think this is all about our creativity. there are a number of moonshots that if we had a chance to continue working at the last beyond november we should consider. should we have a sovereign wealth fund? should he have a strategic petroleum reserve, or strategic regions reserve? can we use the sovereign wealth guarantee? we have issued a six sovereign loan guarantees in seven years.

how do you compete in that context? i'm passionate and interested in that part of the work of economic statecraft, and laying down a doctrine would be a good start. david: i have a question about every word in that sentence. [laughter] here's the deal, i'm going to take three questions, short, because we are really pressed for time. let me take over here -- wait for the mic, tell us who you are, and keep questions short. >> hi, great to see you, daleep and david. doug reddicker. daleep, question on technological sanctions. what we have seen is over the past decade or two, the bulk of sanctions have been finance-related. thanks and other financial actors have had to really boost -- banks and other financial actors have had to really boost their compliance departments in order to comply with technology committees under export controls

don't have that in-house capability is the expectation of this administration that as we move down the export control and other technology-related sanctions, whether it is against russia or in the context of our relationship with china, whether technology companies are going to need to boost their internal complaints department -- compliance department exponentially to make those sections work? daleep: you want me to respond? david: no. >> georgetown university. thank you very much for your excellent presentation. is it time to move to prohibitive import tariffs on all russian exports rather than going for sanctioning one commodity after the other? david: thank you. this woman in the front. >> good to see you.

i think i heard you say that seizing the russian assets or monetizing them in some way could be risky. this has obviously been a source of contention among the g-7 partners. can you tell us where you think you are, whether you think you are closer to some kind of an agreement with the europeans on this? it does seem like the indicators are there. also, on the question, very big question of the relationship, when you say russia is putting its economy solely on a war footing, do you see that as a permanent move or a temporary move? david: ok, daleep, three yes or no questions. the first one is should attack companies be building better complete -- tech companies be building better compliance deferments? daleep: yes, it took decades to build the financial sanctions architecture after 9/11.

we have got to do that warp speed for goods companies. most strategic adversaries run current-account surpluses, so if you want to hit them, you have to hit the real economy, through goods markets and technology sectors. that call to corporate responsibility was very real. david: secondly, should we put tariffs on everything russia exports? daleep: well, look, they history of embargoes is not a great one. but to the extent that russia is transforming its economy entirely into a factory for the war machine, we're going to get to the point where de facto that is where we and up-- end up. david: go ahead. daleep: on russian sovereign assets, i remember that question -- thanks to congress, and we really do appreciate it, we have the authority in the united states to seize the principal of the sovereign assets we mobilize and transfer the value to ukraine. that would be the most efficient

and potent option available to all of us in the g-7. but seizing principal is a redline for many of our g-7 partners. whether you use the theory of countermeasures or the legal theory of setoff where ukraine sets up a reparations claim and transfers it to the balance sheet and reset that off against our collective liability, russian reserves, in either path we don't have consensus with the g-7. the question strategically is you just wait and hope that we get consensus. our belief is that, no, you don't wait and hope. the situation in ukraine is difficult, it's dire. you see the situation with air defenses, manpower, energy infrastructure. if we have a way to act with solidarity and speed and an appreciable scale, which i would define as at least $50 billion, that is what you are supposed to

do. we have an option on the table for our g-7 leaders to consider that will allow us to act in precisely that way, speed with scale and solidarity can which has been our greatest strength throughout. and really it is the financial support it provides, but also the signal to putin that we are not going to 50 and he is not going to outlast us as we are not going to --we are not going to fatigue and he is not going to outlast us. david: great. please join me in thanking daleep. [applause] if you just stay where you are, bring up our next panel. i think you will introduce the panelists.

arshad: morning. i am arshad mohammed, i'm a reporter with reuters, delighted to be moderating this panel. to my right, yuriy gorodnichenko, professor of economics at berkeley. to my left, fiona hill, senior fellow at the council on foreign relations. and remotely, agathe demarais, senior fellow at the council on foreign relations. we will have remarks and then turned to the onions for short yes or no questions--audience for short yes/no questions. [laughter] i would like to ask each of you, starting with you, yuriy, and then fiona and agathe, what is the policy's objective of sanctions against russia meant

to plausibly achieve? yuriy? yuriy: it's a great question, also very difficult question, as we saw earlier this morning. the first step in thinking about sanctions and the is to ask ourselves what is the horizon, what we want to achieve with them. if we want to do something to signal our displeasure with the invasion, we can sanction a few people here and there and say we have done our job, end of story. another objective to stabilize energy prices in the u.s. and europe. if you have this objective, we can certainly deliver this through other controls. if objective is really to make the budget constraints very, very binding for putin, i don't see any other course of action other than imposing some type of embargo on any kind of economic relationship with russia, most

importantly energy. it has to be embargo on the flow of goods, on capital flow, technology transfer. this is what he wants to do, right, but he faces political constraints. i think we should be very clear in our mind what kind of thing we want to achieve and what kind of constraints we have. i'm virtually from ukraine, and my objective is very -- i'm originally from ukraine, and my objective is very clear, we want russian aggression to be defeated. for this to work you have to have serious sanctions to inflict significant economic damage on the russian economy. they should run out of money like the soviet union did 1986 when energy prices collapsed and the soviet union had to reform itself. this can happen also in russia today. arshad: fiona? fiona: part of the problem is the way people conceive that

question -- not you personally here, because we also saw david put that to daleep in a straightforward manner. but it is people's expectations of what sanctions are meant to do. both yuriy and daleep have been very clear they are not the silver bullet, they are not the catchall, they are not the instrument that changes everything. i think what daleep said -- i'm sure yuriy would completely agree with this -- if you're dealing with somebody with an 18th-century mentality, which putin has and i would take it back more centuries, you have a difficulty in just using financial instruments. if we think back to the medieval era -- i will put this up because it does frame the mentality, using sophisticated modern incidents, putin's approach to financial sanctions is like the old medieval, steel all the money, sack all the granaries, make sure that nobody can actually fight against you,

and destroy everything. that is what we are seeing here. as daleep said and has ukraine has experienced, putin's number one objective is to conquer the territory. it is not to invest in the health and prosperity and wealth of the russian people. that has been a real shift. if we looked at putin in the early stages of his presidency, the first two terms he was in office, his goals were very different. they were infected to make russia one of the g-7, g-8 countries. that is not where he is at this particular stage. our instruments are refined and targeted for different putins in a different phases of his presidency. unfortunately, we have to calibrate them with more primitive and rather straightforward methods of making sure that we are paying attention to the other battlefield and understanding putin's mentality. the goal is at this particular point, as we are going to talk

about, is to adapt to the circumstances to make it more difficult for putin to wage war and to make it very clear that a wartime economy in the 21st century is going to be much harder to maintain. putin is one big advantage, a really great technological team around him, particularly one of the greatest central bankers in the world. but even she is not so much of a genius that she will be able to withstand these kinds of things over the longer term. but he has got those advantages . they came from even ninth-, 1 t th-century mentality's with the 21st-century we are in. arshad: another to chew on, essentially the topic of our panel as a whole, how effective have the sanction so far been? what's worked, what's failed?

agathe: thanks so much for that. to answer your second question, i would go back to the first one, because it is important to go back to the objectives with sanctions, because otherwise it is like asking whether a screwdriver is working or not. for brain surgery maybe it is not recommended it [laughter] what i find really striking is that there seems to be an agreement among ourselves that what sanctions are not meant to achieve -- i think it is really important to discuss what sanctions are not meant to do, because i've seen a lot of confusion around what were the goals of sanctions. i think it is important to say it. it's not about stopping the war as a magical tool. what we have seen since 2014, because the war has really started in 2014, is that sanctions have not changed putin's calculus. the second nonobjective is

regime change. we know from history that sanctions can never achieve this, and there is no reason to believe that any successor to putin would completely change his you about ukraine. and then the third nonobjective is about economic collapse in russia. i think that is a really important one especially when we take a look at europe. sanctions are not meant to promote economic collapse of russia. it is a large economy, the ninth largest in the world, and it has a lot of financial reserves. more importantly, such an economic collapse would not be in an interest, because you would have a ripple effect -- in western interest, because you would have a ripple effect around the world. what are the objectives of sanctions? the first one, and it really important one, double medic symbol, a simple dish diplomatic civil -- diplomatic symbol, a symbol of unity and result. then as fiona mentioned, making

it more difficult for putin to wage war, which is critical. it is not a black thing, it is not an on-off switch, but it is making it more difficult -- not a black-and-white thing, not an on-off switch, but making it more difficult to wage war. this is stuff found in defense gear. finally, the third objective i would throw into the mix,i and to me that is probably the most important objective of sanctions, is about long-term degradation of the russian economy, slow asphyxiation of the russian energy sector. these are with sanctions that aim to curb the financing and technology access for russia's energy sector. this is very important because a number of russian energy fields are coming to maturity, which is a polite way to say the reserves are fast depleting for some russian needs to build more oil and gas fields, but without

access to western technology it will be very difficult. these would be my three objectives. on to your second question, i am of the view that sanctions on russia work. i think an important thing to say and to repeat, because at least in europe -- i met a branch based in london -- we have a lot of information coming from russia saying sanctions do not work. the first thing i would say is that it is important to highlight the fact that, yes, they do, they have an impact. in terms of their impact and what is working, what is not working, to get to your question, i would say three things are working very well that i think are a success, and two things are working less well. i will say briefly we can delve a bit deeper into some of these discussions. the first thing i would say has worked very well is not directly russia-related. seeing from the european

perspective about sanctions and transatlantic collaboration on sanctions, it has at times been very difficult -- i'm thinking of the months after the u.s. withdraw from the jcpoa. we have seen collaboration on russia, which has been very positive. the second thing that has worked very well, and it is actually related, is about limiting ripple effect from sanctions on emerging economies. i was mentioning that russia is a big economy, so if we were to completely restrict russia's energy exports, this would have a ripple effect around the world. there has been a lot of attention paid to this topic. this is the reason why we are not seeing bigger secondary sanctions being imposed on all russian exports. and then the third thing that i think has worked very well going back to the objectives i was mentioning -- when we take a

look at things, the eu embargo on oil imports is reducing hydrocarbon revenues. yes, russia's shipping oil to india, but it is less profitable. when we look at expert controls come these have a lot of liberals, these need fixing -- these have a lot of loopholes, these need fixing, but it is the same story. russia is circumventing measures, but importing goods that cost more, and it takes more time to import them and usually of lower quality. we should highlight the fact that export controls are not magic tools, but they are also doing something. i will end on two things working less well. getting others on board, and this is export controls. a lot of countries say we talk a lot about the uae or serbia or kazakhstan. they said we do not impose these measures. efforts to get others on board

with western section efforts have been disappointing. finally, i will end getting on board has been very difficult. in europe, the picture is a bit striking. we see with european elections coming in a few days now that a number of countries, pro-russia policies are polling very high. this is very worrying. arshad: thanks so much. yuriy, i would like to turn to you if i may. how would you tighten sanctions now? two, to go to agathe's point and i understand that russia is earning less money out of its oil exports, but how effective can sanctions on russian oil exports ever be when it seems to have quite study customers-- steady customers in china and india that are very happy to buy discounted oil? yuriy: let me start by making an

observation that we have so many sanctions, so many regulations now, it is hard to enforce this. they have thousands of people to track it. we have this patchwork of regulations in the u.s. and other countries, and in this sense -- i shouldn't say very -- it is relatively easy to circumvent sanctions. i don't control importers in kazakhstan and so on. it is time to turn the table and say if you want to have a trade or any kind of relationship with russia, you have to have a license from the u.s. government or some european body, and then it will be very clear who is responsible for what. i often hear that, ok, we have an embargo on russian energy, oil and gas and so on. this is leading to a spike in energy prices. and i would say this can happen, this is real possibility, but on

the other hand, we know that russia is a big energy export but has look abassi to replace -- low capacity to replace oil, number one. number two, it is true that russia can export oil to customers like india and china, but it is only a fraction of the global sales they used to have. in this since they will have a lower flow of dollars they can use to finance the war. and also i want to remind everybody that when we had an embargo on a rainy oil, everybody said -- iranian oil, everybody said we would have a big spike in energy prices. in one of those years price of oil clamps by 50%. it is enough -- collapsed by 50%. it is a nonlinear dynamic between sanctions and energy prices. it is not this linear

relationship where you tighten controls on russian oil and it has this explosion in energy prices and so one the final point is people say we cannot do this because this will destroy our economy. but it happened there already. 2022, many in europe are saying we will have mass unemployment, we are going to lose russian energy. it didn't happen. we didn't have mass on the climate -- mass unemployment. maybe a slowdown in the economy, but nowhere near mass on unemployment. demand for energy is relatively low, but it is not zero. you can substitute one type of energy for another type of energy. europe is a great example of how countries can adapt to the changing landscape. arshad: fiona, if i could follow up on that question or that issue, if russia can keep exporting, even if it is earning income not in dollars, but in

rupees, are you ever going to get to a point where you have sufficiently impaired the russian economy that putin cannot maintain his war machine, or that he cannot maintain or keep a lid on domestic discontent? and can you ever get to a point where you have really materially increased the probabilities of changing his outlook from his decision-making--his outlook, his decision-making, if he has the point of view of a 19th-century czarist? fiona: many 18th-century czars got into trouble. history is replete with the consequences of everything you have laid out. putin has very much put russia on a path it was not on in the

first two terms of his presidency, a strange mixture of a creaking czarist system plus and also fighting soviet system rolled into -- ossifying soviet system rolled into one. i have great admiration for the central banker, but she was trained during the soviet period. she's around my age and was not educated in western setting. she is quite good at giving soviet-style economics, and the soviet union was a war machine. that's executive what it was. that is exactly why gorbachev ended up in his position, because the system had run out of steam, which this will do as well if you are putting everything on a war economy, just as daleep laid out and yuriy laid out, you run into considerable consequences. putin has gotten away with a lot of things because of our inability to keep our act

together, and he is banking on all of the things agathe just talked about now. he is banking on the fight that russian propaganda, influence operations will result in the rise of far right proposed movements in the european elections, places like slovakia and hungary, where we have seen these cans of actions. there will be a backlash against sanctions on russia because they seem to be hurting our economy. he's banking on the same thing happening here in november, so he is pulling out all the stops because he knows it will be a problem. we have to remember that putin comes out of that soviet period and he understands why the soviet union collapsed. it was about published -- there was a book published here at brookings on that very team by-- theme by basically the prime minister under yeltsin, how to manage the economy and how not to manage the economy. putin knows all of this, which

is exactly why he is trying to discredit sanctions, he is try to talk people into believing, as agathe said, that they do not work, and is hoping we fall to because it is too difficult. there was a message we need to be sending from this panel, that daleep was laying out extraordinarily well, is we have to stick at it because there will come a point that i can't say when it will be, but if we keep that unity and are adaptable and don't always tell them what we are going to do with big flashlights on our heads is saying we are coming for you, we are about to do this, that, and the other, we will hit a point where it becomes very difficult to deal with this repression. that is what he is what he's dealing with at the moment. he is banking at the fact that he is putting enough money to place like moscow and st. petersburg so russian elites will feel relatively comfortable and repressing any kind of dissent. he is lucky that a million-plus

people left politically, but he won't be over the long term economically. arshad: can i ask you for one moment on the broader set of tools, of which sanctions are only one? i would like to ask with particular reference to what appears to be under consideration by the administration, which is to say the use of u.s. weapons to strike into russia -- for ukraine to strike into russian territory? what might -- what more would you like to see on all of those other non-sanctions tools? and what might a plausible and state for this conflict-- end state for this conflict, whether it ends up being a frozen conflict or something else, look like to you? fiona: it is accommodation of all of these things just like sanctions are not a magic bullet, there is not a magic

bullet on the battlefield either. we have to be consistent across the board. diplomacy and communication, strategical meerkats, are going to be -- strategic communications, are critical as well. while what daleep said was supposed to get it and i had questions like david did, but it was spot on. but he has a job to do and diplomat have to do a better job as well. they have to push back against russian propaganda. we have to be on that front 24-7. the idea that we have a panel suggesting sanctions don't work is because we are trying to counter this basically insidious idea. but there's nothing we can do to basically rollback putin. putin wants us all to think he cannot be defeated. he knows he can be, and he is genuinely worried at this particular moment. don't think for one second that he is not. he gets up every single day

wondering if somebody is going to be out to get him, literally, because there is a good chance somebody is. that's the nature of the beast that he has created around him, the beast rising at this particular moment. he wants to basically beat ukrainians and europeans and americans into submission, either literally on the battlefield or in the field of political propaganda. we have to keep on stepping up our game. our big problem in the united states is our election, let's be honest about it. as daleep said rather plaintiffly-- plaintively from the podium, in november we will get to this next stage of statecraft. putin is hoping that daleep will not be here in november and the rest of the biden administration, either, because that will give him an animus victory, because it will -- enormous victory, because it will erode america's leadership. this war has become a proxy war

against the united states and in no one else putin has invited -- anyone else putin has invited, be it china, the north korea -- be it north korea. it is not ukraine. it is for putin presented as an opportunity to pile on against the united states' power in ukraine. one other thing we need to do is get our european counterparts some leash to make the point to china, as ursula wonderland did during-- ursula von der leyen did during xi's visit to europe. putin is emboldened by the fact that he think everybody else's able to exercise their frustration with the united states through the wharton ukraine, -- war in ukraine. if europeans make it clear that this is a matter of european

security and european economic future, i think that calculation might change. we need to change the calculation of other players in this compact as well. arshad: yuriy, i would like to ask you a question that david put and daleep punted on, which is what did he mean when he talked about expanding the scope of how one defines financial facilitation? is he talking about secondary sanctions, question one? question two, how significant with such -- would such an act by the united states be? would it, for example, lead to curtailing what i gather are the large amount of goods flowing through central asian countries? give us your thoughts on that? yuriy: he is responsible,

whatever it means for you, however you can interpret it. [laughter] i will give you my interpretation. [laughter] arshad: the eye of the beholder. yuriy: i think he is saying secondary sanctions will come in, and this will be part of a broader initiative to tighten the screw on the russian economy. and lots and lots of opportunities to do this. many people have this view that russia is completely disconnected from the financial system. it's not true. many banks still have access to russia, and they lots of transactions between russia and the rest of the world. it is not just the russian industrial bank, it is the bank that makes a killing out of russia. it is surprising they are still allowed to operate in russia. systemically important financial institution in europe. this is going to be somebody

else, i don't know, but it is an example of something that has happened with the russian economy that are not be happening -- that should not be happening, and maybe this is one of the next steps. also, technological transfer. we have already a lot of infrastructure in the financial industry. it is not rocket science. all you need to know is where the final destination is going to be. this can be tightened. however effectiveness is --how effective this is going to be. i think it is going be very effective. when you issue a threat and nothing happens, nobody is backing to the threats. you have to make the threats real -- no one is reacting to the threats. you have to make the threats real. this is what is going to happen. i think it is going to be very effective, because we see that the threats of sanctions from the u.s. government have a very chilling effect on any kind of economic transaction between russia and whoever else they are

talking to. arshad: agathe, i would like to turn to you. agathe is the author of a book called "backfire," about sanctions, and you can guess what the thesis is. are we now getting to a point of peak sanctions? are we getting to a point where the very effectiveness of u.s. sanctions has started to erode their utility? please. agathe: well, i would say probably, and that is a terrifying perspective. i think we have to remember that sanctions are not a magical tool. in some cases they don't work. but in russia's case, they certainly work, have an impact. as fiona has mentioned, it is important to say this and repeat this to counter russian

disinformation. what i'm worried about is the fact that a number of countries, led by china, are building sanctions-proof mechanisms that would provide them with plan b in case they are disconnected from western financial channels. what are we talking about? well, the first step in this edifice is polarization. it's been a buzzword for quite a while. we see that china gets half of its trade important trade from renminbi. that is massive. that is really important, because it is the first layer of protection for china, and of course russia is doing the same. when we discuss foreign exchange reserves, we debate $300 billion from the russian central bank. the reserves of the russian central bank were twice figure

book -- were twice bigger when the war started, but why can we not touch the other $300 billion? they are not in western currencies. it is not going to be massive from one day to another, but it is this two-tool trend. the second is alternative to strip. -- swift. russia still connected to western channels including swift, but what we see our efforts to build alternatives, and china has a mechanism that is much smaller than swift in terms of turnover, but i connect 1300 banks around the world, all european banks. old american banks are connected to it. what china is doing here is building a plan b if it were to be disconnected from swift, but it is also doing

something very aggressive, because one day china could see if you want to do business with us, the second largest economy, you need to use our domestic financial channels, and china would have the ability to cut off entire countries or companies from its market. it would mirror what u.s. sanctions could do. that would be very significant the third block in this edifice is currencies. when talking about crypto-- we are not talking about crypto here, but the chinese-shoot renminbi. i think what is really striking here is that usually the debate is about that it may happen but it may not be a game changer, but with alternative to swift, same with digital currencies, but all of these tools taken together, the ability for countries to bypass western channels and decrease

effectiveness of sanctions. it's a terrifying prospect, because it would mean that this tool may become gradually ineffective. there would be other implications for national security tracking financial transactions is a clear way to track terror troops groups or illicit groups involved in nuclear proliferation. if these groups have western-proof financial channels, this will have massive security applications. we are probably at peak sanctions, and this is very significant and it could have significant implications for future sanctions, maybe the future of sanctions talking about export controls. we are seeing this in china with semiconductors, ai, biotech, quantum computing. this is going to happen and it may have important implications for western diplomacy. arshad: thank you.

i would like to now, unless either if you want to chip in, like to turn to questions from the audience. going to follow david's practice in taking questions in groups of three. and i would plead that you make it a question and you make it short. let's start with a gentle man in the front. the gentle man in the middle with the tie. do we have one more? well, we are going to go to the person in the far back there. please. we have the mics? one there. let's do it for the mics, for the webcast. >> energy intelligence.

on price gouging, how do you evaluate how it is working? in march -- [indiscernible] western insurers said to a statement to the u.k. parliamentary committee that sanctions were unenforceable, and they complained a little bit about having to be the enforcer of the sanctions. i think the swedish pni club had a comment about how there is a 30-fold increase in paperwork, which may be good for collecting intelligence, but maybe not so good if you are an insurer. i think there is something like 800 ships, tankers have moved away from the pni clubs. i guess the question is how do you evaluate that, and is the price cap unenforceable and it's time to move on to other

sanctions? >> hello, craig kennedy. daleep spoke about blocking technology into russia, but also capital. having spent 20 years trying to get capital into russia as a banker, i've been watching what has been happening the last several years, and we have seen russia reduce its -- rather, western capital moving out of russia. we had $725 billion of foreign lending in russia in 2014. that is more than half, but there is still quite a bit of it. russia is trying to refinance in its own much, much smaller domestic markets. my question is has anybody been watching how russia is dealing

with refinancing all of this foreign debt? i will give you two numbers in particular that have struck me as interesting and potentially very problematic for russia. the total size of the russian domestic corporate bond market is about $120 billion. if you look at two russian companies, gazprom and ross neff -- gasprom and rosneft, the outstanding debt exceeds all of that. what this means for russia is they potentially facing its own financing crisis domestically. by the way, china has not been stepping up at all with lending to russia, except for projects where china is jointly involved. arshad: back row? >> thank you very much. i am from the country georgia.

former member of the parliament. i resigned in protest of what my government is doing today. you know today the georgian government overrode the veto of the president on the foreign agents bill. what we are observing in our part of the world is russia is expanding its battlefield not only with tanks, but marking its territory with the foreign agent laws. it was kyrgyzstan first, and now it is georgia. there are people on the streets and we are protesting and we do what we can within the constitutional norms. there is an assistance with sanctions that the u.s. has imposed on those who actually h old it for this bill, but it is travel bans mostly. putin is witching the war -- -- waging the war -- arshad: if you could boil it

down to a question, thank you so much. >> we are trying to see what else can be done, because this is war by other means. arshad: yes, thank you. yuriy, are you up for discussing the price cap and whether it is unenforceable? yuriy: i think it is enforceable, we have options to do it. it's more difficult and it requires stability and solidarity. somebody has to be doing this. it's true, it is a lot more paperwork and everything. but as i said before, know your customer. these tools have been around for a long time and these industries will have to adapt. the question about financial markets in russia, i can't remember who was saying that russia is a gas station pretending to be a state. gas stations don't have developed financial markets. they are going to run out of

money at some point, they will have to involve the central bank to do financing. which means they would have to keep up a lot of pressure on the russian economy, keep it isolated, don't have any access to the global capital market. they should not be able to refinance especially in these very difficult conditions. there was some discussion about whether we should have -- whether we should allow russian capital to leave the country. this was related to the last question about georgia. my personal think is -- my personal take is we should not doing this because russian money has enormous power to corrupt anybody, not just in the u.s., but anywhere including ukraine. we should make sure this corrupt money is not going anywhere in our system. arshad: and if we could go perhaps on the question -- fiona: i guess we are having

problems with not being able to hear. agathe, can you hear us? agathe: i can hear you all except when yuriy speaks, which is very frustrating. that's fine. arshad: if the technical folks can try to improve yuriy's mic, that would be great. fiona, please. fiona: yes, some of these questions are very technical and i myself would prefer to hear from yuriy and agathe about these because there are specific issues they are tracking very closely. but i will speak to the last point, which yuriy has already touched on, and if agathe didn't hear that, yuriy is talking about the power of russian money to corrupt not just in the united states but in europe and the immediate region. that is one area where russia has invested very heavily in particular governments. in the case of georgia, of course, the power behind the throne of georgia made all of

his money in russia. part of the dilemma that we are dealing with is that so many of the former soviet republics, which have been -- even calling them this seems pretty goes 30-plus you --seems ridiculous after 30-plus years of independence, but many people in their 50's and 60's spent formative years in the soviet union and build up their fortunes in the immediate wild period of capitalism that many people here participated in or could have watched all of the countries building up their financial markets. a lot of them made their money in moscow, and that is the case with so many of the current leaders, where they made connections in moscow and careers there. putin knows exactly how to put all of their buttons. in the case of one, he is extraordinarily worried about being sanctioned.

this gets to agathe's point about peak sanctions. and it is holding georgia itself hostage in basically a way of pushing back against the threats from the united states and other countries to actually sanction them, because billions are tied into his dealings in russia. we have a lot of complexity here. putin, for example, can have all kinds of impact in place like serbia, in slovakia, in hungary, in germany, in france, because of many decades of investing in political 20's and individuals.--political parties and individuals. so while we are following the money trails of technology, banking, and many others, we have to follow the same trails of money and understand those relationships between putin and russia and many other players that political and financial in

other countries can be duly around russia and further afield. that is going to be part of that next stage of treasury, and i hope in the case of europe as well. in london, for example, formerly known as londonstan, or so many oligarchs were invested, the london laundromat, there has been a wake-up call. several poisonings, polonium scattered over london, novichok on doorknobs. the message is loud and clear. the financial times of russia and that ability to influence, particularly in pushing through legislation that harms countries' ties with the rest of the world, is very much there. that is another phase of action we will have to take. arshad: thank you. fiona: do we have agathe?

arshad: to the extent you were able to hear yuriy, do you have comments on the domestic financing or refinancing of russian debt? agathe: well, yeah, on the question of the price cap and dimensions of financing, these are questions i followed a little bit. on the oil price cap, we should always expect private firms to say that sanctions are unenforceable, not working. i think as a former treasury official, we will hear from the private sector. i think what this points at when we look at the oil price gap is that this measure was intended to work in the short-term to medium-term, when russia was still relying on western vessels to ship oil to its new customers. i'm thinking about india. but in the long run, and when i mean long-run, one year tops,

russia was going to adapt. this is something that is really important when we take a look at sanctions. we should always expect the target to adapt. what russia has done is it has built its own fleet of russian vessels to export its oil, and it can do whatever it wants. we can sanction these vessels, russia wouldn't care, as long as they have no ties to western jurisdictions, which is difficult to do in practice. the point is about adaptation, and i think daleep made at this point, that we will always need to adapt. working in the short-term, medium-term, but not the long-term. we need to acknowledge this. that is always going to be the case. on gazprom and short-term borrowing, i spent some time taking a look at them, and they are alarming.

gazprom has posted a $6.8 billion loss last year, which is extended significant given that companies usually lose $40 billion to russian state coffers every year. obviously that is going to be a problem, because it means that this year -- and it was announced last week gazprom isn't going to be able to contribute to the russian budget, it's not going to be able to pay dividends to its main shareholder, the russian state. that is going to be a problem to finance the war, and that is going to be a problem for replenishing the reserves of the sovereign wealth fund, which have already been depleted by around half, 60 billion u.s. dollars, since the war started. we are not talking about small numbers. we are talking about big numbers, and i don't think there

will be any easy way out for russia. when you take a look at borrowing, this points to the fact difficulties can arise because short-term borrowing from gazprom has doubled and doubled again in the first quarter of this year. we are talking about huge difficulties possibly, and a closed loop, because using gazprom would give money to the sovereign wealth fund. but at some point this link is severed, the sovereign wealth fund doesn't have a lot of money anymore -- i'm not entirely sure how this works. it's a closed loop, but i'm a bit puzzled about how it is going to work in the long run. arshad: thank you so much, agathe. let me say thank you to our panelist, and turn it over to suzanne maloney, director of foreign policy studies suzanne: thank you. i have the pleasure of

concluding this event. i am the director of foreign policy here at brookings. i want to thank the brilliant speakers on our stage virtually and in person. the keynote address by the national security adviser set the tone for a terrifically substantive and forward-looking conversation we had among our panel, moderately brilliantly with arshad as well as yuriy and let me thank ben and harris at our economic studdies at brookings. there were remarks made to the world colliding and is very much of a world of collidings at the brookings institution and the reflection of the fact to think about the tools of economic state craft, you really do need experts on the economy, the financial markets, and national security to come together in a way and that kind of

intellectual collaboration is vital but all too rare among policy circles and one of the comparative advantages at brookings. i won't try to summarize the important insights each of our pres provided but commendatory reflect upon them as you leave our event but to return to the brookings website, especially for those watching the event virtually, jump on now and you'll be able to read the papers in depth that were commissioned that this event was really intended to launch. many of the papers address the questions raised by the audience and some of the points made by our speakers here today. i just wanted to wrap up by saying i've done a lot of work on sanctions and another important context, the issue of iran, and what i heard today resonated deeply with a lot of what i've come to appreciate about the efficacy and lack thereof of sanctions with respect to u.s. and

international policy on iran. we talked about the principles, the architecture, the instrument of sanctions. we talked about the implications of innovation and involving types of sanctions. there was a time and enormous literature developed around trade sanctions that have been in the past 20 years of the post 9/11 era and seeing the implementation of financial sanctions and now new innovation around technology sanctions as well. we talked about the factors that contributed to the efface of sanctions as well as the limitations and unintentional consequences as well as the bureaucratic challenges and diplomatic challenges of devising, implementing and perhaps sustaining sanctions. i will disclose by leading perhaps a question mark around the idea of peak sanctions. i recall with some humility testifying before congress on the question of whether or not we could in fact sanction the iranian central bank successfully without wider implications on the global economy. i happened to be wrong when i

testified in part because i think that we hadn't anticipated, many of us hadn't anticipated the change in energy markets that enabled that to be possible. what i've seen in the course of my work looking at these particular issues is it really is a evolving landscape and we know from this conversation and another conversation that my friends, david helped moderate a little over a year ago at brookings by jake sullivan, economic state craft is absolutely here to stay as a vital element of u.s. and other country's policies. thank you all. please join me with a round of applause for our speakers. [applause] [captions copyright national cable satellite corp. 2024]

>> today assistant health secretary dr. rachel levinend council on sports and nutriti discuss ways to improve health and mtal well-being hosted by the press club washington, d.c. watch it live on 2:00 p.m. eastern on c-span, c-span now or our free mobile app on c-span.org. >> november for most member is a constitutional formality. their primary is where they view

their time and voting records because that's where it makes the difference. the districts have gone from here to here. the way people receive their news has gone from factual, vetted news and out to here and everyone has their own truth and tune in for affirmation and get their world views validated and the news is from the centering force of american politics for 200 years out to the super p.a.c. at 501c-4 enforcement mechanisms and primaries and there's no cavalry for those who deviate from the party line. those factors together made it very difficult for members to step across those lines and get outside the comfort zone. two words that don't show up in our founding documents anywhere. the word "democracy" doesn't show up and the word "compromise." i've never seen anyone run for office and promise to be a hell after compromiser and sure to be a short year in politics. what the founders had in mind

was exactly that, democracy, creating an architecture structure that requires compromise. we have two chambers in the legislative branch, not because we wanted it there but they create created a architecture and made us think twice along the way of things that need to be changed. the note of democracy is totally dependent on compromise and you lose the ability to compromise you don't have a democracy. you can't have a winner take all and expect to govern a country like this here. >> a group of lawmakers discussed congressional gridlock and off offer their thoughts on possible solutions to finding common ground. watch the full event tonight at 9:00 eastern on c-span, c-span now, our free mobile video app or online at c-span.org. >> today an unprecedented armada

landedded on the shores of normandy. >> these are the boys. these are the men who took the cliffs. these are the champions who helped free a continent. these are the heroes who helped end a war. >> two million sons from 15 countries jumped in to flag filled skies and a blood soaked surf and met death on an even plain. >> the sons of democracy improvised and mounted their own attacks at that exact moment on these beaches, the forces of freedom turned the tide of the 20th century. >> and the road to vd-day was hard and long and traveled by valiant and weary men. history will always record where that road began.

it began here with the first footprints on the beaches of normandy. >> more than 150,000 souls set off towards this tiny sliver of sand upon which hung more than the fate of a war but rather the course of human history. >> today we remember those who fell and honor all who fought right here in normandy. >> watch c-span's live, all day special coverage of the 80's anniversary of d day, thursday, june 6, featuring a speech from president biden from normandy, france. >> c-span is your unfiltered view of government. we're funded by these television companies and more, including buckeye broadband. ♪