Sanctions, military deterrence to continue, NATO chief says

NATO will continue to build its military capabilities and employ a “wide combination of different tools” to counter Russian aggression, but it doesn’t aim to “mirror” its rival power, the organization’s chief told CNBC Sunday.

“NATO’s approach to Russia is based on what we call a dual track approach, defense and dialogue,” NATO Secretary General Jens Stoltenberg told CNBC’s Hadley Gamble from Brussels.

“And that’s exactly what we do when we now have implemented the biggest reinforcements of our collective defense since the end of the Cold War, and will continue to strengthen our collective defense with high readiness, more troops, and increased investment in our defense.” 

He added, “And after years of cutting defense budgets, all our (members) are now investing more. So we are not going to mirror what Russia does. But we will respond in a very firm and clear way, with a wide combination of different tools, as we have demonstrated over the last years.”

The comments come ahead of an anticipated summit between U.S. President Joe Biden and his Russian counterpart Vladimir Putin in Geneva on June 16. They follow Putin’s interview with NBC News aired Saturday, during which the Russian leader said that the U.S.-Russian relationship “has deteriorated to its lowest point in recent years.”

Stoltenberg elaborated on the topic of nuclear weapons, saying that “when it comes to land-based nuclear missiles, it has been a consistent position of NATO over several years since the demise of the INF (Intermediate-Range Nuclear Forces) Treaty, that we are not planning to deploy new land based nuclear capable missiles.”  The U.S. under former President Donald Trump withdrew from the Cold War-era treaty in 2019, after accusing Russia of violating it. 

“But we will make sure that we are responding to new Russian military buildups, including with nuclear weapons,” he said. “And we are doing that in many different ways, including by strengthening our air and missile defense … and also by of course pursuing arms control and that’s part of the dialogue with Russia.”

The Biden administration imposed a raft of new sanctions against Moscow in April over alleged interference in the 2020 election, a colossal cyberattack against U.S. government and corporate networks, illegal annexation and occupation of Crimea, and human rights abuses. The Russian government denies all of the allegations.

“Perhaps the most important thing we have done is that for the first time in NATO’s history, we have combat-ready troops in the eastern part of the Alliance,” Stoltenberg said. “New battle groups are deployed to the Baltic countries and Poland, we have tripled the size of the NATO readiness force.”

Russia has amassed a huge military buildup in the Arctic, according to satellite imagery, and is developing a new ‘super-weapon’ called the Poseidon 2M39 torpedo, which has sparked concern among Western officials. The unmanned stealth torpedo, powered by a nuclear reactor, is designed to get past countries’ coastal defenses via the sea floor. 

In April, Moscow sparked fear and confusion with a massive military buildup on the border with Ukraine, prompting U.S. European Command to raise its awareness level to “potential imminent crisis” before pulling back. Western officials blame it for the far-reaching and highly sophisticated SolarWinds hack on U.S. government agencies in 2020. Russia denies involvement. 

Biden also said Russia “has some responsibility” to deal with the hackers behind May’s devastating Colonial Pipeline cyberattack, even as the White House has not blamed the Kremlin for the it, because U.S. officials link the attack to a hacker group within Russia. Russian government spokespeople have rejected any links between their country and the hack.

But in a sign that it may be anticipating more sanctions, Russia’s finance minister announced earlier in June that the country is cutting the U.S. dollar from its $186 billion National Wealth Fund as Washington continues to impose financial penalties on Moscow.

“The messaging is ‘we don’t need the U.S., we don’t need to transact in dollars, and we are invulnerable to more U.S. sanctions’,” senior emerging markets strategist Timothy Ash said in a research note after the announcement.