By Penza News
Russia suffers only a little more than half the damage from Western sanctions, while the rest of the losses is rather unevenly distributed among those states that introduced the restrictive measures. This is the result of a study by economists Matthieu Crozet from the Lingnan University in Hong Kong and Julian Hinz from the Kiel Institute for the World Economy that was published by the German-language business newspaper Handelsblatt in October and caused widespread discussion.
According to the data presented, trade losses from anti-Russian sanctions amount to 4 billion dollars per month, of which 1.8 billion, or 45% of the total amount, are lost by those countries that introduced restrictions against the Russian Federation. At the same time, 92% of all the losses of Western countries fall on the shoulders of the European Union, and Germany bares the lion’s share of it – 38%. Germany loses 667 million dollars a month.
The study also states that French companies could not compensate these losses from the sanctions through exports to other countries.
Today, an increasing number of European politicians start openly say that the restrictive measures against Russia originally initiated by the United States in March 2014 after the events in Ukraine, do not bring the desired result and should be canceled, but they have not yet influenced the situation.
Thus, at the end of October the German parliament rejected a proposal by the opposition parties concerned about the serious economic losses of their country, to lift sanctions and revise the country’s policy towards Russia.
During the meeting, two initiatives were considered: “Detente with Russia – do not extend sanctions against Russia”, presented by the Left Party, and “For a new policy towards Russia – cooperation instead of confrontation”, which was advocated by the AfD faction and contained measures to promote cooperation with the Russian Federation in various fields. As a result, both initiatives were rejected by a majority of the deputies.
Analyzing relations between Russia and the European Union, Anton Friesen, Member of the foreign affairs committee and the committee on humanitarian assistance and human rights of the German Parliament, AfD MP, noted that “it’s already not as bad anymore like some years ago.”
“Many EU countries consider the current foreign policy against Russia as unconstructive. The sanctions have negative consequences especially for Germany and other countries with traditional close relations with Russia,” he said stressing that it is only a matter of time until the EU sanctions will be lifted.
“Firstly, the CFSP needs always a consensus about sanctions. One member state will be enough to lift them. Secondly, the economic situation in Europe is getting worse. It’s easy to impose economic sanctions in a phase with a booming economy. But it will be tough to keep same in a phase of recession,” Anton Friesen explained.
Commenting on the thesis that the EU is pursuing its policy in the wake of the United States strategy, the German MP pointed to the EU desire “to include the US in its foreign policies.”
“But after Trump has been president, you see some frictions in the transatlantic relations. The EU disagrees with his positions considering Syria or Iran for example. Therefore, I would say the opinion of the US is still very important for the EU, but not crucial,” the politician explained.
Meanwhile, Roberto Castaldi, Research Director of International Centre for European and global governance, Director of the Research Centre on Multi-Level Integration and Governance Processes at eCampus University, believes that sanctions have no significant negative consequences for the West.
“Russia is exploiting its residual military capacity to play a role in the international arena, but its economy is in a bad shape and cannot sustain that role for a long time. The EU is militarily weak but economically strong. Therefore the sanctions impact on Russia is much stronger than on the EU,” the expert said.
In his opinion, Moscow and Brussels need to create a new cooperative framework.
“Some first steps in that direction are taking place. One was the decision in the Council of Europe to fully re-admit Russia,” Roberto Castaldi reminded and added that Russia itself is betting on Europe.
“Moscow reduced dramatically its reserves in dollars and its energy giants just decided to trade in euro rather than dollars,” he said.
Speaking of potential steps towards lifting the sanctions regime, the analyst drew attention to the need of “a face-saving agreement for all parties on Ukraine.”
“This is the difficult part. Then a new framework can be created ensuring security and economic cooperation. The Council of Europe and OSCE can be the initial vehicle and an Association agreement with the EU should be the final destination. […] This can favor Russian economic development, domestic reforms and democratic evolution,” Roberto Castaldi said.
In turn, Patrick Sensburg, German MP from the CDU/CSU fraction, noted the importance of economic cooperation between Russia and the EU, calling the sanctions a serious obstacle to the development of relations.
“Before the situation in the Ukraine, the EU and Russia had established a strategic partnership that included issues such as trade, economics, energy, climate change, research, education, culture and security. There was even the idea of an EU-Russian trade area (FTA). We should put all issues on the table and solve the problems and improve then again our economic relations. The situation in the Ukraine is a major factor for this. But I think we could find a win-win-solution,” the politician said.
In his opinion, in the last decades both countries have built up a friendship that they should never forget.
“Although there are some critical points in the relationship between Russia and the EU at the moment, everyone should be eager and work together to continue and improve the relations again. In particular, finding a peaceful solution for the conflict in Syria – if there is one – would be a very good chance to rebuild common diplomatic relations. Another issue of bringing our relations closer together again, is the de-escalation and pacification in Ukraine. I think both are possible,” Patrick Sensburg said.
In the meantime, Fernand Kartheiser, Luxembourg Parliament member for the Alternative Democratic Reform Party (ADR), stressed that the overall situation of the relations between Russia and the EU remains highly unsatisfactory.
“The only notable progress has been achieved in another institution, namely in the Parliamentary Assembly of the Council of Europe, where sanctions against Russia have been lifted. But the change of power in the EU institutions, with an incoming new Commission, will take some time. So, no major changes should be expected in the near future,” the deputy said.
But it is not only this political change in the EU that makes a change of policy difficult for the time being, it is above all the very nature of the sanctions themselves, he noted.
“These are complex – imposed for several reasons with different aims at different moments without any realistic opt-out scenario. To expect a Russian withdrawal from Crimea has been unrealistic from the beginning; asking Russia to let Eastern Ukraine exposed to political or military risks is equally naïve,” Fernand Kartheiser explained.
From his point of view, the sanctions are basically an example of bad diplomacy, rooted in Cold War-thinking rather than representing a result of an objective and intelligent analysis of post-Soviet conflicts in Eastern Europe.
“Not only are the sanctions not effective but they are harmful: they create a Russian-Chinese proximity which doesn’t serve European interests, they weaken the Russian democracy and they harm both the Russian and the Western economies. In addition, they contribute to artificial East-West tensions at a moment where close cooperation between the West and Russia would be very useful in many respects. To put an end to bad diplomacy needs courageous, political decisions. It is difficult to see who among the European leaders would be ready to take such decisions, especially since some Eastern European countries are fiercely anti-Russian,” the politician said, stressing that Europe lacks leaders for the moment.
“France and Germany have weakened leaders; Spain and Italy are focusing on domestic problems. […] The UK is not only leaving the EU but has also a problem with the still unclear follow-up of the Salisbury incident, despite the fact that Russia has been accused immediately after the incident, and sanctions have been imposed. […] In those circumstances, leadership can only be expected from the United States. But President Trump faces also difficult domestic issues and his freedom of movement is limited by the next presidential campaign. So, in summary, Russia has a leader, the West has none,” Fernand Kartheiser added.
He also noted that “the credibility and acceptance of these sanctions, if there ever was any at all, is continuing to erode.”
“Large parts of the general public in Western Europe do not see any rationale in those sanctions. Nevertheless, one has to fear that they will stay with us for some more time, not only because of the electoral campaign in the US, but also to avoid a new open division between Eastern and Western countries inside the EU,” Luxembourg Parliament member said.
In his opinion, the whole issue of the sanctions is one of Western political mediocrity from the beginning on.
“There are many lessons to be learned from the current situation. For what reasons, in which circumstances and under what conditions is it politically useful, advisable or even wise to impose sanctions on another country? When should sanctions be avoided? The sanctions against Russia certainly are a low point in the history of EU diplomacy; they are simply a total failure. […] They show tremendous errors in judgement and a total lack of strategic thinking,” the politician concluded.