Russia on the Brink of Default... Putin Has No Intention to Stop the War

Putin "Convinced Russia and Ukraine Are the Same People"... Also Told Macron He Will Continue Attacks
S&P Downgrades Russia's Credit Rating to CCC-... Analysis Says Economic Sanctions Alone Are Insufficient to Stop Putin

Vladimir Putin, President of Russia [Photo by EPA Yonhap News]

[Asia Economy Reporter Park Byung-hee, New York=Special Correspondents Jo Seul-gi and Lee Hyun-woo] Despite forecasts that Russia could face a sovereign default crisis for the first time in 24 years due to the West's powerful economic sanctions, Russian President Vladimir Putin remains steadfast in his stance not to halt the invasion.

According to major foreign media on the 3rd (local time), Putin said at a security meeting held via video conference that day, "I will never give up the conviction that Russians and Ukrainians are the same people." This meeting was broadcast on Russian state TV.

Emphasizing that Russians and Ukrainians are the same people is interpreted as a sign of continuing the attack on Ukraine.

Putin's determination was also confirmed during a phone call with French President Emmanuel Macron on the same day. According to the Kremlin, Putin told President Macron that Russia's goal is to make it clear that Ukraine does not pose a threat to Russia, and that Russia's military operation objectives will be achieved no matter what happens. A French official said Putin stated that Ukraine must lay down its arms for the bombing to stop. The official added, "Russia's goal is effectively to control the entire territory of Ukraine," and "the worst is yet to come."

◆ U.S. sanctions even target 'Putin's mouth' = As Russia's attack on Ukraine continues, the West's sanctions against Russia are intensifying.

On the same day, the U.S. imposed additional sanctions targeting Russian oligarchs and their families. Billionaire Alisher Usmanov and Putin's spokesperson Dmitry Peskov were included on the list. Their assets in the U.S. are frozen, and access to the financial system is blocked.

This measure aims to increase pressure by cutting off the 'funding sources' of emerging oligarchs who are close to President Putin and are believed to have supported the war funds. It also appears to seek division within Putin's support base.

The White House announced it will work with governments worldwide to identify and freeze illicit gains such as yachts, luxury apartments, and assets owned by these individuals. Germany seized a $600 million luxury yacht owned by Usmanov in Hamburg, and the UK also publicly announced asset freezes and other sanctions targeting Usmanov and others.

Credit rating agency Standard & Poor's (S&P) further downgraded Russia's sovereign credit rating from 'BB+' (based on dollar-denominated bonds) to 'CCC-' and warned that Russia's sovereign default is imminent. The CCC- rating indicates a near-default status with almost no chance of recovery. The last time Russia defaulted was in 1998. S&P maintained a negative outlook on the credit rating, leaving room for further downgrades.

U.S. President Joe Biden held a video conference with the leaders of the Quad on the 3rd (local time) at the White House regarding Russia's invasion of Ukraine. The meeting was attended by President Biden, Japanese Prime Minister Fumio Kishida, Australian Prime Minister Scott Morrison, and Indian Prime Minister Narendra Modi. The Quad, a consultative body involving the United States, Japan, Australia, and India aimed at countering China, agreed during the meeting to establish a humanitarian support system for Ukraine.
[Photo by AFP]

◆ "Economic sanctions may not work on Russia" = However, there are also opinions that these sanctions are insufficient to stop President Putin. The Wall Street Journal (WSJ) reported that past Western economic sanctions on countries like Iran and Venezuela did not change the behavior of dictators, stating, "Even with strong sanctions, the likelihood of Russia stopping the war is low." In the past, Iran faced expulsion from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), central bank sanctions, and oil export bans that have not yet been applied to Russia. Recent record-high purchases of Iranian oil by China suggest that sanctions against Russia may tighten Sino-Russian relations.

Danny Glaser of K2 Integrity, a former U.S. Treasury official, analyzed, "Western sanctions will not change Putin's military objectives," adding, "The key is how much pain Russia is willing to endure." Goldman Sachs economist Clemens Graef evaluated, "If Russia continues to earn money through oil and gas sales, the immediate crisis caused by sanctions will disappear within 6 to 9 months."

◆ Reluctance on no-fly zones and energy sanctions = As Russia shows no signs of halting its offensive despite Western sanctions, Ukrainian President Volodymyr Zelensky is demanding stronger measures from the West, such as establishing a no-fly zone and energy sanctions. However, the U.S. and the European Union (EU) have dismissed the possibility of a no-fly zone, citing that it would naturally lead to Western military intervention and could trigger World War III. Energy sanctions remain a last resort due to concerns that they could further fuel already high inflation.

Meanwhile, Russian and Ukrainian delegations held a second round of talks on the same day but only agreed to provide humanitarian corridors for civilians and a temporary ceasefire limited to those areas during civilian evacuations. Both sides agreed to hold a third round of talks as soon as possible.

This content was produced with the assistance of AI translation services.