United States, allies aim to force Russia to move money away from war

WASHINGTON (AP) – The United States and its allies are pushing ahead with sanctions aimed at forcing Vladimir Putin to spend Russia’s money on supporting his economy instead of maintaining his “war machine” for the fight in Ukraine, a top official said in Ministry of Finance on Tuesday. .

Deputy Finance Minister Wally Adeyemo, one of the key US coordinators of Russia’s sanctions strategy, said in an interview with The Associated Press that the goal is to make Russia “less able to project power into the future.”

On the same day that inflation reached its steepest rise in decades, Adeyemo said reducing supply backlogs and managing the pandemic is the key to bringing down rising prices, which he related to the ongoing land war in Ukraine, which has contributed to rising energy costs.

“Let us be clear that the rise in energy prices was caused by President Putin’s invasion, and we will continue to see volatility in these markets as long as President Putin continues his illegitimate invasion of Ukraine,” he said. He added that the Biden administration was “committed to doing everything we can to lower energy costs for the American people.”

As Finance Minister Janet Yellen’s No. 2, Adeyemo’s task is to develop a sanctions strategy that many economists have equated with economic warfare with Russia. He also leads the Treasury Department’s efforts to rebuild the U.S. economy from the pandemic with equity at the forefront.

Adeyemo discussed the next steps the United States and its allies will take to inflict economic pain on Russia – and the complications of the war with rising costs for Americans at home.

The United States and its allies will then target the supply chains that contribute to the construction of Russia’s war machine, said Adeyemo, who includes “everything from looking at ways to go after the military units built to use not only in Ukraine , but to project power elsewhere. “

“What it practically means is that with less money, Russia will have less money to invest in their military,” he said.

Youtube video thumbnail

Adeyemo said Putin recently admitted that the Russian economy will have to change. Adeyemo interpreted it to mean that “the Russian economy is less flexible, it is smaller, it is less able to project power into the future.”

Adeyemo’s work includes coordinating with US allies to develop thousands of unprecedented sanctions against Russia’s leadership and its central bank, which aim to paralyze the country’s financial system.

Germany in particular is facing international pressure to limit its business relations with Russia, which supplies the European superpower with natural gas.

“Our German colleagues and my European colleagues in general are working as hard as possible to make plans to get away from Russian energy as soon as possible, including last week’s announcement that they would ban Russian coal in the short term,” Adeyemo said . “And our expectation is that they will take those steps.”

In the US, the economy has proved to be a struggle for the Biden administration, as the strong job growth of the past year has also yielded the worst inflation in more than four decades.

It informs the Ministry of Labor on Tuesday that prices in March rose 8.5% from a year ago, the steepest rise since December 1981. While inflation began to rise before Russia invaded Ukraine, the war has pushed up supplies of oil and gasoline. Half of the last month’s rise in consumer prices came from gas.

This economic volatility is a challenge for other work that Adeyemo has for the Ministry of Finance – to lead a fair pandemic-related economic recovery through the Ministry of Finance’s Office of Recovery Programswhich marks its one-year anniversary this week.

Adeyemo said he had recently visited Memphis to see how the city used U.S. rescue plan dollars to help people pay their rent. Overall, he said, “we have seen that 80% were applied to low-income households, 40% to African-American households and 20% to Latinx households.”

He said it was imperative that the remaining relief funds under the program be used to help small businesses, including through the State Small Business Credit Initiative, which allows states to increase access to credit for small businesses.

“Many communities are thinking through ways they can not only use the money to solve the immediate crisis, but also how to better build their communities into the future to ensure people have economic opportunities,” he said.

___

Associated Press writer Josh Boak contributed to this report.

Leave a Comment