The European Union is preparing to open another chapter in its policy of sanctions against Russia, with Kaja Kallas announcing a new and particularly extensive expansion of the lists of individuals and companies facing European restrictive measures, at a time when the debate in European capitals themselves is no longer just about how much more pressure can be applied to Moscow, but also whether the strategy to date has achieved what was originally presented as its main objective.
The announcement takes on particular interest because it comes after successive rounds of sanctions that have covered an exceptionally broad spectrum of the Russian economy: banks, state-owned enterprises, energy companies, the defense industry, technology imports, trade intermediaries, vessels, individuals linked to the Russian state, and, increasingly, third-country enterprises deemed to be helping Russia circumvent restrictions.
In other words, Europe has already tried almost the entire toolkit of economic pressure and is now searching for even more targets, even more financing routes, and even more points at which it can create additional costs for the Russian economy. The official logic remains consistent: as the cost for Moscow rises, its ability to finance the war, acquire critical components, and maintain its international trade relations as it did before 2022 is increasingly constrained.
The problem is that, four years later, the debate can no longer be limited to whether sanctions cause damage. Obviously they do. The far more difficult question is whether this damage has translated into a decisive political outcome.
And on this point, the picture is far less triumphant than the initial announcements suggested.
The Russian economy was not left unaffected, but neither did it collapse. Moscow lost significant access to Western financial markets, faced severe restrictions on technology imports, saw major Western corporations depart, and was forced to reorganize a large part of its foreign trade. Nevertheless, the state continued to function, energy exports did not disappear, new trade routes were established, and the government of Vladimir Putin was not led to the political retreat that several in the West considered likely when the first wave of restrictions began.
And this is where the embarrassment begins.
Because, if the argument is that previous sanctions were particularly effective, then the reasonable question arises as to why new, harsher, and more extensive ones are constantly required. If, on the other hand, the new package is necessary because the previous ones were insufficient, then perhaps the problem lies not in the quantity of sanctions, but in the excessive expectations created around them.
The great collapse that was expected but never came
In the first months following the outbreak of the war in Ukraine, the Western strategy of economic pressure was accompanied by forecasts that in several cases left the impression that Russia was facing an almost inevitable economic disintegration. Cutting off major banks from the international financial system, freezing assets, placing restrictions on advanced technology, and gradually reducing the European market for Russian energy products were presented as a combined blow that would be exceptionally difficult to absorb.
In practice, however, the process proved far more complex. The Russian economy paid increased costs for imports, logistics, payments, and financing, while its dependence on certain non-Western trade partners grew significantly. At the same time, however, the country capitalized on the fact that a large part of the world did not participate in the Western sanctions regime and redirected a significant portion of its trade toward China, India, Middle Eastern countries, and other markets.
This does not mean that Moscow's strategy was without cost or that its economy emerged a winner from the decoupling with Europe. It means, however, that reality proved quite different from the picture of an economy that would collapse within a few months under the weight of restrictions.
The distinction is essential, because it is one thing for a sanction to create difficulties for an economy, and an entirely different thing to compel it to change policy. To date, the former has occurred to a significant degree. The latter has not.
The easy targets have already run out
One of the greatest problems now facing Brussels is that the most obvious targets have already been covered by previous rounds of sanctions. Major Russian banks, state-owned enterprises, defense industry conglomerates, political figures, and business figures with close ties to the Kremlin have been on the relevant lists for years, forcing the European Union to move gradually toward increasingly complex forms of enforcement.
Thus, the weight has shifted more toward tackling circumvention. European authorities are looking for companies that facilitate the re-export of goods to Russia, financial institutions that support transactions, shipping companies and tankers participating in Russian energy exports, as well as enterprises in third countries considered to be aiding the transfer of technology or components.
This shift also illustrates something else: the nature of the sanctions has changed. The first phase was based primarily on direct economic isolation. The current phase is increasingly based on the attempt to close the loopholes created precisely because the first phase failed to completely isolate Russia.
In other words, Europe is no longer just trying to close the door. It is trying to locate all the windows that were opened in the meantime.
Russian oil did not disappear, but changed direction
Energy constituted from the beginning the most critical arena of economic confrontation. Russia relies on oil and gas exports for a significant part of its state revenues, making the energy sector an obvious target for Western sanctions policy.
The European Union drastically reduced its direct energy dependence on Russia, and this represents one of the largest geopolitical shifts of recent years. Where before 2022 vast volumes of Russian natural gas flowed to the European market via pipelines, Europe turned to other suppliers, increased its use of LNG, and invested in new infrastructure.
However, in the global oil sector, things were much more difficult. Volumes that were no longer directed toward Europe began to a significant degree to find other buyers, with China and India acquiring even greater importance for Russian exports. Concurrently, a complex network of shipping, insurance, and trading structures developed, which the West is currently attempting to curb.
This specific development is perhaps the most characteristic example of the limits of a sanctions policy in a globalized economy. When a commodity commands international demand, the loss of one market does not necessarily mean that the ability to sell it vanishes. It often means that it changes route, sells at a higher discount, is transported in a more expensive manner, and requires more intermediaries.
This is a real cost for Russia, but it is not the same thing as the economic strangulation that had been predicted.
Europe paid part of the bill
The other side of the equation lies within the European Union itself. Reducing dependence on Russian energy may have strengthened Europe's geopolitical security, but the transition to a different energy model did not come without an economic price.
European industry was forced to operate in an environment of higher and more volatile energy costs, while the need for larger LNG imports and new infrastructure increased the significance of the international natural gas market for the European economy. In sectors where energy prices constitute a large share of overall production costs, this change has a direct impact on competitiveness.
Germany serves as the most characteristic example, as its industrial model had developed over decades on a combination of high technology, exports, and relatively cheap energy. The chemical industry, metallurgy, fertilizer production, and other energy-intensive sectors found themselves facing a very different reality after 2022, during a period in which the country simultaneously faces problems of low growth and increased international competition.
At this point, the argument that «sanctions only hit Russia» becomes difficult to sustain. They do not only hit Russia. The critical question is whether the cost they inflict on the Russian side is larger and strategically more significant than the collateral damage created within the European economic mechanisms themselves.
And this is far more complex than a slogan at a press conference.
Brussels insists that pressure is cumulative
Proponents of continuing sanctions have, of course, a serious argument: their effectiveness should not be judged solely by whether they caused an immediate collapse, but also by the long-term attrition they create in the Russian economy. Restrictions on access to technology, more difficult investment conditions, rising trade costs, and the need to use more expensive intermediary routes can have cumulative consequences that are not necessarily reflected in a single annual growth metric.
This is reasonable and should not be ignored.
However, if this is now Brussels' actual argument, then perhaps the persistent rhetoric of a «decisive blow» should also be abandoned. Because a measure aimed at long-term attrition cannot simultaneously be presented every few months as the package that will immediately change the terms of the game.
Here lies perhaps the greatest communication contradiction of European policy. Each new round is presented as a major step toward Russia's economic weakening, but the need for a subsequent round emerges almost immediately after. This creates the impression of a mechanism that functions, yet constantly needs to be expanded because the political outcome still remains somewhere on the horizon.
The debate is no longer whether sanctions cause damage, but whether they achieve their purpose
Four years later, a serious assessment of European policy requires separating two distinct questions.
The first is whether sanctions have caused economic damage to Russia.
The answer is yes.
The second is whether they have led the Russian leadership to the political change for which they were designed.
Here the answer is far less clear.
Russia continues to wage the war, the Kremlin has not altered its basic strategy, and the economy, despite real pressures, has proven more resilient than many initial estimates predicted.
This does not render sanctions useless. It does, however, make problematic the idea that more sanctions automatically lead to greater political results.
At some point, the critical question ceases to be «how many more names can be added to a list» and becomes «what specific behavior are we trying to change and through what mechanism do we expect it to change».
And now comes the next «historic» package
Kaja Kallas and those in the European Union who advocate continuing the hard line consider that time must not be allowed to work in Moscow's favor and that every new circumvention method must be countered with new restrictions. From this perspective, expanding sanctions lists and exerting greater pressure on vessels, middlemen, and third-country enterprises constitutes a logical continuation of the existing strategy.
Yet as the lists grow, the other question inevitably grows as well: where does this strategy end?
What is the point at which Brussels will be able to say that the policy succeeded?
When Russian energy revenues are reduced by a specific percentage?
When access to certain technologies is restricted?
When Russia is brought to negotiations?
Or simply when maintaining economic pressure is considered a success in itself?
The answer matters, because without clear criteria for success, every new package can be presented as necessary regardless of the outcome of the previous one.
And this is roughly how we arrive at the paradox of contemporary European policy: sanctions are presented as successful, but must constantly become more numerous; the Russian economy is presented as severely weakened, but constantly needs a new «decisive blow»; and every new package is described as more significant than the previous one, as if success is always just one list away.
Perhaps ultimately this is the primary conclusion of the past four years. Sanctions can make an economy more expensive, more rigid, and less efficient. They can create significant long-term attrition. They can alter trade relations and geopolitical orientations.
They do not, however, possess some magical mechanism that automatically converts economic pressure into political surrender.
Nevertheless, Brussels is preparing the next major package.
Which, once again... will collapse. And certainly not Russia.
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