When Britain invaded Egypt in 1956 (in alliance with Israel and France), the US threatened to block attempts by Britain to borrow $561 million from the IMF and to get a $600m credit extension from the US Export-Import Bank. The US also threatened to sell its sterling bonds (tradeable IOUs issued in British pounds), which would have had a catastrophic effect.
These ‘financial warfare strikes’, and other pressures, forced Britain, within weeks, into a humiliating withdrawal.
If only it was as easy to reverse the Russian invasion of Ukraine.
It is entirely right to impose sanctions on Russia, but we must ask whether sanctions are being designed to force Russia to withdraw (as Britain was forced to withdraw in 1956) – or if they are about punishing Russia.
If our primary concern is the welfare of the Ukrainian people, we would impose very harsh costs that could be reversed quickly.
The Russian government would feel huge pain and also see the benefit of ending its aggression.
Instead, many of the sanctions seem to be permanent (like barring Russia from the EU gas supply system). The Suez parallel would be if the US had actually sold its sterling bonds rather than just threatening to.
Such punishment sanctions actually reduce Russia’s incentive to end its war. These kinds of sanctions prolong war.