The world economy will pay a heavy price if the West imposes new sanctions on Moscow, the US Treasury warns
If Russia launches an invasion of Ukraine, the global economy will suffer an inevitable fallout as a result of newly unleashed Western sanctions on Moscow, the US Treasury secretary warned on Wednesday.
Speaking to French news agency AFP, Janet Yellen explained that the US and its European allies are preparing a "very substantial package of sanctions that will have severe consequences for the Russian economy."
However, despite Washington wanting the highest cost to fall on Moscow, she admitted that there would be "some global fallout" from the measures.
The primary concern of Washington and Brussels is the potential impact of economic sanctions on the global energy market. As a major exporter of energy, Moscow supplies around 40% of the gas used by EU countries. The bloc’s energy security could be in danger if Moscow were to cut off its gas pipelines in retaliation for economic sanctions, some have claimed. And even if Russia doesn’t limit its supply, energy prices could still rise even further in the event of a large-scale conflict in Europe.
Earlier on Tuesday, US President Joe Biden warned that Americans would also have to pay a heavy price for the escalation around Ukraine.
"If Russia decides to invade, that would also have consequences here at home. But the American people understand that defending democracy and liberty is never without cost," he said. "I will not pretend this will be painless."
The recent spat over Ukraine between Moscow and NATO allies started when Russia allegedly began amassing troops on its Western border. Fears of war then led to some nations, including the US, opting to evacuate diplomatic personnel from Kiev. The Kremlin has repeatedly denied that it is planning a military incursion, claiming that troop movements near the frontier are due to planned training exercises.