Germany bears main brunt of EU sanctions against Russia

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News

After the Russian annexation of Ukraine’s Crimea back in 2014, the EU imposed sanctions against Russia. A new study shows for whom the punitive measures became particularly expensive, the Frankfurter Allgemeine Zeitung says.

According to the study, the German economy suffers by far the largest export losses among the Western Nations due to the sanctions against Russia, the newspaper Rheinische Post reported, citing an unpublished investigation of the Kiel Institute for the World Economy (IfW).

“Germany accounts for almost 40% of lost trade in the West, while other major geopolitical players such as the United Kingdom (7.9%), France (4.1%) and the United States (0.6%) are far less affected,” reads the study.

Russia's losses from sanctions. Graphic: Ukrainian Crisis Media Center

Russia’s losses from sanctions. Graphic: Ukrainian Crisis Media Center

According to the calculations of the Kiel Institute, German exports are on average about 727 million dollars (618 million euros) per month lower than in the scenario without sanctions. According to the IfW calculations, the total cost of the sanctions imposed on Russia in 2014 was $ 114 billion (€ 97 billion) in 2015 alone, with 61% attributable to Russian companies. The export loss of the sanctioning western countries amounted to 44 billion dollars (37.5 billion euros), of which 90% fell to the EU countries.

Russian trade flows before the sanctions

Russian trade flows as of 2014 before the Western countries imposed sanctions on Russia. Source: CNN

  • The EU imposed various sanctions on Russia since the annexation of the Ukrainian region of the Crimea back in 2014.
  • In addition to sanctions against individuals and organizations, there are sanctions against parts of the Russian economy.

The EU economic sanctions on Russia:

  •  limit access to EU capital markets for major Russian state-owned financial institutions and energy and defense companies;
  • ban both the export and import of arms;
  • ban the export of dual-use goods for military use to Russia;
  • curtail Russia’s access to certain sensitive technologies and services that can be used for oil production and exploration.

Editor’s Note

 

On 14 December 2017, the European Union has once again extended sanctions against Russia because of the stalled peace process in Ukraine.

In terms of Russia as a whole, if former Russian Finance Minister Alexey Kudrin is to be believed, sanctions cost Russia 1.5% of GDP, which aligns with the IMF, which estimates that ”…sanctions and counter-sanctions might have initially reduced real GDP by 1 to 1½ percent. Prolonged sanctions may compound already declining productivity growth. The cumulative output loss could amount to 9 percent of GDP over the medium term.”

In 2014, Russia has also imposed and keeps extending counter-sanctions on the Western countries. These involve introducing travel bans against a blacklist of 89 EU politicians and military leaders as well as blocking imports of selected categories of agro-food products from the EU, US, Australia, Japan, and other countries that had previously imposed economic sanctions on Russia.


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Translated by: Yuri Zoria
Source: FAZ

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  • W8post

    RIGHT! Of Course!
    Ask SIEMENS…

    • Dagwood Bumstead

      The problems Siemens currently has have far more to do with cutbacks on investment in the oil and gas industry as a whole than with the sanctions, which did not prohibit exports to Dwarfstan as such, only to the illegally occupied Crimea.

      • W8post

        That was the trick! As Siemens didn’t know there was NO plant in Turkmenistan (or wherever)
        Now Siemens got fined by the EU, BUT they can prove (by verdict of the court ‘ a sale = a sale ) that those ‘horrible, stubborn Russians’ wont return their precious turbines. as they say: ‘They are crying out loud now’.. .NOT

  • Ihor Dawydiak

    Fake news has always been synonymous with Russia and most of its people. Why? They have an inferiority complex which has been generated by the fact that they have always lived in a super sized “Potemkin Village”.

  • zorbatheturk

    I have no idea why anyone would believe any information coming out of RuSSia at all. Unfortunately various bloggers, including Harvard graduate, Goldman Sachs alumni, and Wall Streeter Susan Webber, who runs the Naked Capitalism blog under the pen name Yves Smith, is too dumb to realize she is being manipulated by Kremlin interests. Whilst Zero Hedge and Wikileaks might as well relocate to Moscow.

    Wise up, folks.

    • veth
      • Dagwood Bumstead

        It’s merely a matter of time before the Welfare Fund is empty as well. With the dwarf expanding his involvement in Syria, Sudan and Libya the cost of all these new operations will form a further drain on what’s left of Dwarfstan’s reserves. What’s the dwarf going to do- even more cuts to the budgets for education, health care, infrastructure and other “non-essentials”? Probably, but only after being elected again in March.