Martin Arnold in Davos — Financial Times Jan 23, 2018
The head of a leading Russian bank has warned of “the growing threat of military conflict” in Europe and said that if the US slaps more economic sanctions on institutions in Moscow it would be “a declaration of war”.
Andrei Kostin, chief executive of VTB, told the Financial Times that his biggest concern was the “dangerous” situation being created by the build-up of arms in Europe, which risked an “accident” happening between Nato and Russian forces.
“We are at the beginning of a new arms race,” Mr Kostin, a close ally of Russian president Vladimir Putin, said on the sidelines of the World Economic Forum in Davos. “Nato is asking for more weapons and spreading more weapons in Europe and Russia will retaliate absolutely the same.”
“So who will benefit from this? Only the generals and those who produce arms,” he added. “America is saying Europe should pay more for this. Who needs it? It is very dangerous.”
The US Treasury is due to deliver a report to Congress next week on oligarchs and “parastatal entities” close to Mr Putin that is likely to be used as a basis for further sanctions against Russian interests.
VTB and Sberbank, the two biggest Russian banks, are both majority-owned by the Russian government and they fear the US could try to exclude them from the Swift international interbank payment system, which would severely restrict their cross-border operations.
Mr Kostin said he was “not concerned” about the likelihood of having personal sanctions imposed on him, which would stop him from travelling to the US or having a US bank account.
But he said: “Any economic sanctions against institutions, personally I say it would be like declaring a war. I see no reason why the Russian ambassador should stay in Washington any longer after that or the American ambassador staying swimming in cold water in Moscow.
“It think that is a worse than cold war situation and that is very dangerous. And I think that Americans are playing with fire because the relationship is going from bad to worse and we are not responsible for that.”
Herman Gref, chief executive of Sberbank, made similar comments at the end of last year, saying that new US sanctions would “make the cold war look like child’s play”.
On Monday, the head of the British army General Sir Nick Carter said he was “actively examining” reversing a plan to wind down a UK base in north-west Germany in response to the growing threat from Russia.
In November 2015, Turkey shot down a Russian fighter jet that veered into its airspace and Mr Kostin said there was a growing risk of more such incidents causing Russian relations with the West to deteriorate further.
“There is so much military equipment close together, anything can happen. Maybe it will not lead to a nuclear war, but it will further kill our relationship. Who knows what is going to happen in Syria, or in the Baltics or in the Black Sea where you have now American military ships. The more arms you have, the more reason to believe there could be an explosion just by accident.”
He added that the US could not expect Russia to co-operate with putting pressure on North Korea over its nuclear programme until it lifted sanctions. “North Korea is a terrible thing. And America said Russia are not cooperating. But why should Russia co-operate? They imposed sanctions and we reply with more co-operation? It sounds reasonable? They shouldn’t expect this.”