Sanctions will hit Russia harder over time

The EU sanctions against Russia will intensify over time and will have an increasingly large long-term impact on the Russian economy.

This is reported by Bloomberg, which has reviewed the relevant report of the European Commission.

"The effect of these sanctions will become even stronger over time, as they have a structural, long-term impact on the Russian budget, financial markets, foreign investment, and the industrial and technological base in Russia," the report says.

It is noted that the sanctions, which halted imports from Russia to the EU worth about 91 billion euros, "have significantly worsened the industrial and technological potential of the Russian Federation".

The report estimates that almost a third of Russia's federal budget will be spent on defense and internal security this year.

The authors argue that thanks to measures aimed at minimizing the consequences for member states, the impact of sanctions on the EU has been contained, but in some areas, it has been "tangible," mainly due to Russia's countermeasures, as well as the Russian-Ukrainian war and the resulting price increases.

EU exports to Russia and imports from Russia fell by more than 50% compared to 2021. At the same time, the document says, Moscow has been able to stockpile some materials, as well as obtain some banned goods and other substitute technologies from third countries, including China, Kazakhstan, Turkey, and the United Arab Emirates.

Author - Olena Madiak, 07/07/2023