The sanctions- and war policy against Russia and the resulting symptoms of crises in the economy and society are threatening to crush the EU economy. Neither the Commission nor the Member States admit this, but the signs are hard to miss. This is particularly evident in the financial sector at the moment. At least there still seems to be a residual awareness of the problem in Brussels, because at the summit of the heads of state- and heads of government, the current economic situation and fiscal policy were on the agenda on Friday. As a guest, ECB President Christine Lagarde spoke about possible risks in connection with the banking crisis.
How acute the problem is, has not only been apparent since the actual collapse of the major Swiss bank Credit Suisse (CS) last week. The Swiss Confederation is not formally a member of the EU. Ultimately, however, she shares the plight of the entire Western European industry: The hardly veiled pressure from the USA, to follow Washington's directives - or to feel the consequences.
Now neither Lagarde nor Commission chief Ursula von der Leyen call the problem by its name. Because both the Commission and the wonderfully independent ECB have so far proven to be a kind of pain intensifier in this matter: Instead of protecting the »domestic« financial sector from US attacks, they work as enforcers of the will of the Biden administration, Federal Reserve und Wall Street.
The current example is Raiffeisenbank International (RBI). As the Reuters news agency reported on Thursday, the Austrian financial group is apparently late in complying with the US sanctions orders regarding Russia - and is still doing good business there. That's why the institute was targeted by the US sanctions authority OFAC (Office of Foreign Assets Control) advised. As Reuters reported exclusively, the authority opened an investigation against the RBI and sent the bank a letter with a number of questions, among other things on their business in Russia, sent. That alone caused fear among investors – and the share slipped more than eight percent on the Vienna Stock Exchange.
OFAC is a department of the US Treasury Department responsible for overseeing and enforcing sanctions against Russia. To put pressure on, US Sanctions Commissioner James O'Brien was in Vienna a few weeks ago. "Ambassador O'Brien and the Austrians discussed our close cooperation on sanctions in response to Russia's illegal further invasion of Ukraine", said a spokeswoman for the US State Department.
How dependent western banks are on their »friend« USA and its Treasury Department, is obvious: The authorities there can go so far, prohibit a bank from processing transactions in US dollars. Such an act of fiscal state terrorism would not only bring Raiffeisenbank to its knees, and such a fate threatens all, those with the US dollar or on US territory (a neocolonial broad term) make transactions.
Neither RBI nor other financial groups in the EU can hope for support from Frankfurt am Main. The euro central bank does not demand an immediate withdrawal from Russia from the Austrians, but insist on a plan, how to give up banking there and manage the risks, Reuters quoted people familiar with the matter as saying.
The one since February 2022 escalated conflict between the western hegemon and states like China and Russia, who rely on multipolarity, has become the first political doctrine. The "freedom of capital movements" must be subordinate to this. And that is precisely what raises the problems to the level of a systemic crisis. When capitalist market laws are suspended and subjected to political will, the profit mechanic no longer works. And old problems celebrate joyful origins.
So break since the financial crisis 2007/2008 symptoms of the crisis buried under mountains of freshly created central bank money. The sanctions – especially those, relating to commodities – have fueled inflation, which has been difficult to contain. After more than ten years of zero interest rate policy, this forced the central banks to change course. However, the rapid rise in interest rates got parts of the current banking business in trouble. The Silicon Valley Bank in California and CS were the first victims of this "turning point". More are likely to follow – and the consequences are currently difficult to foresee.