THE KAMIKAZE IMPACT OF SANCTIONS AGAINST RUSSIA

Today, sanctions against Russia are probably the most counterproductive ever launched, in view of the perilous state of the Eurozone and the globalised nature of the world economy. In 2015 the EU and its core component the Eurozone desperately need as much economic expansion as they can contrive. Instead, they are using their fragile economy as a weapon of war – at the behest of politicians. It is estimated that the EU has lost € 21 billion in exports because of sanctions against Russia. The total value of EU agri-food products banned from entering Russia has cost the EU €5 billion (dairy products €1.3bn, fruit € 1.2bn, meat and sausage € 1.2, vegetables € 769 million, Fish € 154 million and others € 489 million.

Yet the reality is that Russia is the European Union’s third largest commercial partner and the EU, reciprocally, is Russia’s chief trade partner. Before political disruption intervened, in 2013, EU-Russia trade totalled more than €326bn. Russia invested about €8bn in the EU that year. There is a kamikaze flavour to EU politicians endangering such an economic relationship.

Germany enjoys the biggest slice of business with Russia, totalling €75bn. Other EU states sawing off the branch on which they are sitting are the Netherlands (€37bn of trade), Italy (€30bn) and Poland – admittedly with strong geopolitical motivations – (€26bn).

Russia will not weaken under sanctions. The chief peril of sanctions today is unquantifiable. It lurks in the immediacy of economic consequences within a globalised economy, the incalculable domino effect of sovereign debts turning rancid and currencies failing. It beggars belief that supposedly economically literate politicians and commentators are gloating over the plight of the rouble – arguably more due to tumbling oil prices, but at least aggravated by sanctions – when the euro and much of the world banking system is on a life support system. Economic sanctions have the same credibility as poisoning the public water supply in the hope of killing some enemies. Sanctions are not a weapon that can responsibly be used in a globalised economy.