Europe threatened to slap sanctions on virtually the entire world this week – except the one country seriously threatening to invade it.

In addition to punitive measures on Iran and Russia – already the two most sanctioned nations on Earth – Brussels pledged economic retribution against the billions of people living in India, China, and other countries purchasing Russian oil.

Donald Trump’s threats to annex Greenland using military force, however, were not deemed worthy of such admonishment.

On the contrary, the European Commission effectively rolled out the red carpet for the self-proclaimed “peace president”.

On Wednesday, it formally proposed issuing €90 billion in joint debt to fund Ukraine’s war effort, none of which will likely be repaid, and much of which will eventually be funnelled to American arms manufacturers.

In other words, Europe threatened sanctions on many of its friends (the EU and India are currently finalising a free trade agreement) and pledged to use taxpayers’ money to strengthen the military-industrial base of its likely next invader. You couldn’t make it up.

The EU’s economic justification for its sanctions policy is no less surreal.

Iran, for instance, has been subjected to virtually uninterrupted Western sanctions since the Islamic Revolution overthrew the US-backed Shah in 1979. Trump significantly ramped up restrictive measures after withdrawing from the Iran nuclear agreement in 2018; the EU followed suit in 2025 by reimposing its own sanctions, which had been suspended under the deal.

The extensiveness of the measures – which include asset freezes, import and export bans, and financial service restrictions – means that there is, in effect, nothing left for Europe to sanction.

Even formally listing the main branch of Iran’s armed forces, the Islamic Revolutionary Guard Corps, as a terrorist entity – the most politically significant (and morally justified) measure still available to Brussels – would have a “very minor” impact, according to the Israel-based Institute for National Security Studies.

The current measures already discourage “major companies and banks… from doing business with bodies connected” to the group, it added.

Using sanctions to foment political instability and regime change in Iran also directly undermines the EU’s goal of doing exactly the same thing in Russia.

This is partly because imposing sanctions on both countries simultaneously will drive Moscow and Tehran even closer together.

But it is also because political unrest in Iran, the world’s ninth-largest oil producer, will inevitably trigger a surge in energy prices, thereby easing Vladimir Putin’s ability to fund his own oil-rich country’s war on Ukraine.

Tellingly, Brent crude, a key oil benchmark, rose this week as fears of a US attack on Iran mounted, and fell again when tensions eased.

Ironically, sanctions also help explain why the EU is wrong to think that Trump’s attempt to “run” Venezuela – and flood the world with its cheap crude – would spell the death knell for Putin’s regime.

Rystad Energy, a Norwegian research firm, recently estimated that restoring Venezuela’s sanctions-crippled oil infrastructure could take 15 years. In other words, sanctions’ greatest “success” has ensured that they no longer work.

But unlike in the case of Iran, the EU still has space to inflict more economic pain on the Kremlin. Brussels could, for example, reduce imports of Russian fertilisers, sanction “civilian” firms (such as Rosatom) linked to Moscow’s military-industrial complex, and, most importantly, strengthen enforcement.

Nevertheless, few believe these measures will prove sufficient to bring Putin to heel.

“Unfortunately for those (the present authors included) who wish for Russia’s aggression to end as soon as possible, the bill is not yet coming due for the Kremlin’s war economy,” analysts writing for the Atlantic Council, a US think-tank, noted last month.

An indecent proposal

The EU’s love of sanctions is part of a broader Western (and specifically American-led) trend.

Francisco Rodríguez, a professor at the University of Denver, has estimated that 54 countries are currently subject to sanctions, compared to just five in the early 1960s. In terms of GDP, 29% of the global economy is directly affected by sanctions, up from just 4% sixty years ago.

Sanctions’ pervasive deployment comes in spite of overwhelming evidence that they can inflict catastrophic harm on vulnerable civilians, as well as their “extremely spotty record” in achieving their political objectives, Rodríguez noted.

US sanctions on Cuba, for instance, have failed to topple Havana’s Communist government despite being in place since the 1959 revolution. Decades-long sanctions on North Korea also haven’t triggered the downfall of the brutal Kim dynasty.

Similar lessons apply to Afghanistan, Iraq, Libya, and many other countries. (Syria, a purported success case, is now led by a former Al Qaeda operative.)

Nevertheless, recent events show that at least one country where sanctions – and, more broadly, the use of economic statecraft – have worked: the US. Not as the enforcer, but as the target.

By using its leverage over the global supply of critical minerals, China successfully extracted economic concessions from Trump after ‘Tariff Man’ unleashed his full-scale trade war last year.

Brazil similarly refused to cave to Trump’s demand to release former president Jair Bolsonaro from prison. The US subsequently (and quietly) offered Brasília trade concessions.

Trump’s fundamental cowardice – and respect for displays of strength – is also visible in the military sphere. He quickly declared “victory” in the US military campaign against the Houthis last year, after the Yemeni Islamist militant group fought back with unexpected ferocity. “You could say there was a lot of bravery there,” Trump said, generously.

Of course, imposing – or just threatening to impose – sanctions on the US would be a historically unprecedented move, bordering on unthinkable in Brussels. But if Europe wants to deter a 19th-century-style land grab, it may be the only way to do it.

Fortunately, there’s good reason to think that, this time, it could actually work. Just not against the countries Europe keeps using them on.

Economy news roundup

Exclusive: EU industry chief Séjourné pushes for tariffs on Chinese hybrids. The move, which would expand the scope of Brussels’ current levies on Chinese electric vehicles, could see the Commission slap duties of up to 35.3% on Chinese vehicles combining combustion engines and electric motors. A Commission spokesperson said no investigation into hybrids is ongoing but that Brussels “is constantly monitoring the EU market and imports of [electric vehicles] as well as plug-in hybrids”. Read more.

EU unveils €90 billion defence-focused loan to Ukraine. Two-thirds of the package, formally by Brussels on Wednesday, will be used to provide military assistance to Kyiv, while the remaining €30 billion will be used to plug the war-torn country’s looming budget hole. The military procurement would operate on a ‘European preference’ principle, Ursula von der Leyen told reporters on Wednesday. However, the Commission chief said the cash could still be used to purchase weaponry and ammunition from outside the EU, including the US. Read more.

Exclusive: EU Parliament chief Metsola demands tougher Iran sanctions. In a letter sent on Tuesday to von der Leyen, the Maltese politician called on her EU counterparts to list Tehran’s Islamic Revolutionary Guard Corps as a terrorist organisation. Metsola also suggested expanding the number of regime officials sanctioned by the EU for “repression and human rights violations”, and imposing tighter controls on exports of technology that could be used for surveillance and repressing protests. Read more.

EU to exert ‘maximum pressure’ on China, India to stop purchasing Russian oil. EU sanctions envoy David O’Sullivan said on Tuesday that Brussels must continue to target the “enablers” of Russian oil sales, including third-country ports and refineries, at a time when global markets are “flooded” with crude and the “key indicators” of Moscow’s war economy are “flashing red”. “This is our opportunity to put maximum pressure on other countries to move away from Russian oil and to further hit the Kremlin’s revenue,” O’Sullivan said. He added that Brussels is aiming to finalise its 20th sanctions package on Moscow by 24 February: the fourth anniversary of Russia’s full-scale invasion. Read more.

Beijing hails Brussels’ move to help Chinese EV makers avoid EU tariffs. The news came after the European Commission’s decision on Monday provided “general guidance” to Chinese EV makers on how to make “price undertaking” offers, which appeared to open the window for Chinese firms to export their cars at or above a minimum price instead of facing EU duties of up to 35.3%. Brussels, however, downplayed the significance of the move. “Let’s just all calm down a bit,” a Commission spokesperson said, adding that the issuance of guidance does not entail that the EU’s levies on Chinese EVs will ultimately be scrapped. Read more.

(mm)