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Three years ago, we wrote (together with our friend and colleague, Richard Berner) an early analysis of the sanctions applied to Russia immediately following its February invasion of Ukraine. We viewed those sanctions as the most powerful imposed on a major economy at least since the Cold War. However, Russia has successfully evaded sanctions by finding new buyers for its key revenue-producing export: oil and oil products.

In this post, we start with a brief description of the sanctions regime. We then provide evidence of the extent of leakage. That brings us to the challenge of reinforcing the sanctions—for example, by imposing sanctions on sanction busters (what are known as secondary sanctions). Finally, we turn to what we see as the most powerful option in the current circumstance: seizure and transfer to Ukraine of the Russian state assets that have been frozen abroad since the initial sanctions were imposed.

The founders of the euro hoped that people in all the member states of the European Union (EU) eventually would come to view the common currency as their own. This goal seemed especially difficult to achieve in Germany, where the national currency – the Deutsche Mark (DM) – served as an enviably stable European benchmark for decades. Remarkably, surveys now suggest that the euro’s founders’ hopes have been fulfilled: the common currency is at its height of popularity in Germany. In addition, the euro clearly inherited the DM’s stability, with annual inflation in the euro area averaging 2.1% since the currency’s inception in 1999.

Yet, both economic and political developments make this popularity (and the euro’s stability) appear ironic….