The cost of economic war with Russia
Russia escalated its war effort by firing more than 65 missiles over Ukraine this past weekend. Then yesterday, a Russian missile hit a crowded shopping mall in Ukraine’s central Poltava region, killing at least 11 people and injuring dozens. Now, leaders at the G-7 summit in Germany are figuring out where this goes next. How do they strike a balance between cutting off the financing for Russia's attacks and protecting consumers from the impact of that economic war against Russia?
- Plus: Abortion rights supporters wage legal battles state by state.
- And: we want to hear how the aftermath of the Roe v Wade decision is playing out in your hometown.
Guests: Axios' Matt Phillips and Oriana Gonzalez.
Credits: Axios Today is produced by Niala Boodhoo, Erica Pandey, Sara Kehaulani Goo, Alexandra Botti, Nuria Marquez Martinez, Lydia McMullen-Laird and Alex Sugiura. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.
- G7 leaders to ban imports of Russian gold
- Dashboard: Russian invasion of Ukraine
- Abortion rights activists plot next legal steps
ERICA PANDEY: Good morning! Welcome to Axios Today! It’s Tuesday June 28. I’m Erica Pandey in for Niala Boodhoo. Here’s what you need to know today: Abortion rights supporters wage legal battles state by state. Plus, we want to hear how the aftermath of the Roe v Wade decision is playing out in your hometown. But first, today’s One Big Thing: G7 leaders face the cost of economic war with Russia.
Russia escalated its war effort by firing more than 65 missiles over Ukraine this past weekend. Then yesterday, a Russian missile hit a crowded shopping mall in Ukraine’s central Poltava region, killing at least 11 people and injuring dozens. Now, leaders at the G-7 summit in Germany are figuring out where this goes next. How do they strike a balance between cutting off the financing for Russia's attacks and protecting consumers from the impact of that economic war against Russia. Here to explain his Axios markets correspondent, Matt Phillips. Hi, Matt.
MATT PHILLIPS: Hey Erica.
ERICA: So early in this war, there were heavy sanctions against Russia coming from the US, the UK in the EU. And yet the war still appears to be going strong. What does Russia's economy look like right now?
MATT: Well, it really depends on what you think Russia's economy is. The state economy, the government's ability to finance this really massive land war in Europe, is actually in pretty good shape. After the initial kind of shock and awe of some sanctions that were really kind of unprecedented in their scope on a major economy, the Russian state and the Russian kind of official economy has adjusted. They have kind of taken measures like banning people from exchanging rubles for dollars. They've twisted arms of Russian companies to try to get them to hold onto their rubles, rather than selling them for dollars. So the Russian currency has come back a lot. So they're actually in pretty good shape to continue financing the war.
ERICA: And then what has the effect of those sanctions been on, on other countries?
MATT: It has added to the already inflationary tilt of the world economy coming out of the pandemic. I mean, obviously, inflation's kind of been around now for much of the last year or so, but it's gotten worse since Russia invaded. All over the world you've seen, increases in food and energy costs. I mean, this global rush to secure supplies has pushed prices everywhere up. And it's a lot worse, over in Europe. Say the Germans they're, they're worried about having no heating fuel this coming winter. So they're, they're beginning to contemplate sort of really serious rationing efforts.
ERICA: Now the G-7 is meeting, you know, one side there's you wanna keep sanctioning Russia on the other side, your consumers are hurting. What do they do? How do they think about this?
MATT: Yeah, it's a, it's a really difficult balance. I mean, they clearly want to ensure that they maintain the pressure on Moscow, but the question is, are they are these same leaders gonna be in power to maintain that So, I mean, there's a political calculus here that's kind of an offshoot of the economic war question because it's what kind of government system has the ability to to have the staying power to win this fight. You know, Vladimir Putin doesn't have to worry about midterm elections coming up. So, you know, he's got a different calculus that's clearly the bet the Russians are making is that democracies are gonna have a hard time weathering this inflationary spiral.
ERICA: You're calling this economic war a stalemate for now. What moves either side out of that stalemate?
MATT: You know, some people say, this will have to be determined on the battlefield of Ukraine. Like that's the only way we get out of this. Other people say, well, the only way you know, Ukraine has a chance of prevailing on the battlefield as if we maintain the economic pressure on Russia. So it it's really all related. What analysts have said to me is that in the short term Russia can muddle along, but in anywhere from sort of the midterm to longer term, the kind of restrictions and pressure the Russian economy on is under, is really catastrophic. I mean, it's gonna be a much grimmer economy for the people who are living there.
ERICA: Matt Phillips is a markets correspondent at Axios. Thanks, Matt.
MATT: Thank you.
ERICA: In a moment: courts block trigger laws in Louisiana and Utah, keeping abortion temporarily legal in those states.
ERICA: Welcome back to Axios Today. I'm Erica Pandey in for Niala Boodhoo. Abortion rights activists are reacting to the overturning of Roe v. Wade with state by state legal challenges to abortion bans. Yesterday, a Louisiana district court temporarily blocked the state's trigger laws from going to effect after abortion providers filed a lawsuit. That means abortions in Louisiana can continue for now. Similar suits followed in at least three other states. Axios’ Oriana Gonzalez has been following these legal battles and joins us now. Hey Oriana.
ORIANA GONZALEZ: Hi Erica.
ERICA: So this Louisiana case resulted in the first abortion ban reversal, but it's not the only one. We also saw a Utah judge file a temporary restraining order against the trigger law there. What is the strategy behind these lawsuits?
ORIANA: Both in the Utah and the Louisiana case, the plaintiffs in these cases, which are abortion providers, are arguing that the abortion bans, the trigger laws in these states are unconstitutional. And this is a strategy that we're seeing in general for abortion rights advocates in the US who are planning the next legal battles in the US now that Roe v. Wade is gone. Now because there is no federal protection on abortion, they're looking specifically at two things. One, whether specific state constitutions protect abortion access and two, whether there is some sort of state court precedent say from the State Supreme Court that protects the right to an abortion.
ERICA: So we talked Louisiana and Utah. Where are some of the other places we're starting to see these challenges on trigger bans?
ORIANA: So yesterday on Monday, in a matter of minutes between each other, lawsuits were filed in Mississippi, in Texas and in Idaho, all from abortion providers. They all work a little bit differently. So for example, in the Mississippi lawsuit, the plaintiffs are arguing that the right to an abortion is protected under State Supreme Court precedent, specifically a 1998 case. In the Idaho lawsuit, they are saying that the state's trigger law is “unconstitutionally vague,” that's a quote, and therefore should be declared unconstitutional. And in Texas, there's a little bit of a difference in terms of the lawsuit, because the State Attorney General in Texas said that right now, while the trigger law is not in effect, the state's pre-Roe ban is in effect. And the plaintiffs in that case are arguing that the pre ban was declared unconstitutional years ago.
ERICA: There's also been movement in blue states like California and Oregon to protect abortion providers and patients. What does that look like?
ORIANA: So specifically for the west coast, California, Oregon, and Washington state actually came out with what they're calling a west coast offense to protect abortion providers and patients in their states from bans in other states, particularly red states, that could potentially look to prosecute them for seeking abortion care or providing abortion care. In general, we're seeing those types of actions in other states. Connecticut was the first one to pass a law and enact a law that specifically says that they will protect providers and patients in their state from bans in other states.
ERICA: What reaction are you seeing from conservative lawmakers to some of these state by state challenges to the bans?
ORIANA: So, as we know when Roe v. Wade was overturned, what ended up happening is not saying that abortion is legal in the US, but rather saying that now states have the authority to regulate abortion, meaning it's a state battle from now on. And what I'm seeing from the public, particularly those that identify as anti-abortion, is that while they do not agree with these bands being blocked, they are happy that this is now a state battle.
ERICA: Oriana Gonzalez is a healthcare reporter at Axios. Thanks Oriana.
ORIANA: Thank you Erica.
ERICA: One last thing for today: we want to know how conversations about abortion access are playing out where you live. How is your community reacting? And what questions do you have about this moment? Be our ears on the ground and text a voicememo to 202-918-4893. We may use it this week on the show.
And that’s all we’ve got for you today! I’m Erica Pandey in for Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.