The U.K.'s call for tougher sanctions from the EU on Russia in expelling it from the interbank SWIFT system can backfire with Russian retaliation on the West, according to the co-founder of the Macro Advisory Group based in Moscow, SIA reports quoting AA.
The Group's Co-founder Chris Weafer said that excluding Russia out of SWIFT, an interbank system that provides safe and secure financial transactions for its members, will not affect Russia as significantly as anticipated, but Russia could in retaliation adversely affect the west's aircraft construction sector.
“A SWIFT ban would not prevent big companies making transactions like oil companies’ energy payments, as they could also easily use Asian banks, but it might hit individual customers trying to send money abroad." Weafer said, explaining the move may boost Putin's support base.
“Imposing sanctions on individuals would only work for increasing public support for Putin, and the Russian economy could suffer but the Russian people are ready to take on the burden," he added.
Weafer stressed Russia could retaliate to the new banking sanctions, likely to be introduced with the U.K.'s lead, more harshly. He said people are backing Putin’s politics and clearly Russia is preparing for a harsh winter.
"There are talks that Russia will place a ban on Siberia over flights, which could increase costs for airline companies to a great extent. Russia is also the key supplier of titanium for Airbus and Boeing. Russia exports semi-manufactured titanium and if Russian stopped supplying this, it will hit aircraft production." Weafer said.
Weafer stressed Russia is more selective in its responses, targeting specific industries for efficiency as has been the case with the food imports ban which caused a huge impact on farmers from Poland, Lithuania and Spain.
“I think Russia cutting the gas flow to the west would be the last option” Weafer said.
Airbus, Boeing and United Technologies obtain most of their titanium material needs for aircraft production from Russian giant, VSMPO-Avisma Corp -- one of world’s biggest titanium suppliers.
According to official figures of the company, the U.S. became the largest customer in 2013 with 46 percent share in the overall exports of the company while EU countries became the second with a 45 percent share. The Russian titanium giant produces 40 percent of titanium used in Boeing aircrafts alone.