Do sanctions against Russia work?

Author : Deutsche Welle

Source : 112 Ukraine

The European Union is mulling its own Magnitsky Act — meaning more pressure on Russia. Time to ask what impact current US and EU sanctions have had on the creaking Russian economy so far
23:17, 22 November 2018

Open source

The media sometimes wonder whether the Western sanctions against the Kremlin are effective; Deutsche Welle joined those commenting on this issue. 

'EU sanctions were established in March 2014 after Russia's encroachment in Ukraine and have been in force since. Reviewed every six month by the European Council, they are now in place until January 31, 2019, and include asset freezing, an import ban on items from the Crimea and Sevastopol and a ban on tourism to the same areas (...) Sanctions have knocked 6 percent off Russia's GDP since 2014, a Bloomberg report noted recently. The GDP of the "world's biggest energy exporter" is now 10 percent smaller than might have been expected at the end of 2013, before the Crimea crisis, it said', the article reads.

'Lower oil prices have hit the economy, but sanctions are the "bigger culprit," the report said, adding that Russia's economy is over 10 percent smaller compared with what might have been expected at the end of 2013. Growth has been sluggish at 1-2 percent in the last two years. The International Monetary Fund recently predicted the Russian economy would grow by 1.7 percent in 2018 and 1.8 percent in 2019. Russia has done much to insulate itself from sanctions, but the government's forecasts of growth of over 3 percent by 2021 are in doubt', the story goes on.

But the coin, as always, has to sides, and as the time flows, the measures seem to be less effective - at least as Russia claims. 

'The Bank of Russia said this week it expected the impact of possible new US sanctions on Russia's economy would be smaller than it was in 2014-2015. "We are not willing to argue that all the negative effects [of possible new sanctions], which we may face, will affect us in a painless manner, and that it will not have any impact on the Russian economy," the director of the Bank's Research and Forecasting Department, Alexander Morozov, said in a statement. "This is certainly not the case. But the effect cannot be overestimated since in most of the scenarios it will be much less than the one we observed in 2014-2015',' the article continues.

Read the full story here.

Related: U.S. to maintain sanctions against Russia until it returns Crimea to Ukraine

Related: Bloomberg assesses sanctions' damage to Russian economy

Related: Putin, Trump meet in Paris, discuss INF treaty, Syria and sanctions

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