Author: David Kowalski

The Brussels Embargo on Russia Will Hurt Europe More

Sanctions are all the rage nowadays in Europe’s Russia policy. Wrecked by the economic crisis, Europe’s priorities have been to implement low-budget solutions to counter Moscow’s threats. Instead of multi-billion euro pledges to increase defense spending and play chicken with the Russians, the Union has so far relied mostly on economic sanctions to influence the Kremlin’s foreign agenda. But will these tactics actually work, or will they backfire? So far, a cursory glance over the economic data and forecasts offered by leading international institutions reveals a stark reality: although sanctions are starting to take their toll on the Russian economy, Moscow isn’t budging one inch from its plotted course, while the shaky European economy is poised to bear the brunt for these policies. While sanctions are unlikely to take much of a toll on Europe this year, if the situation continues unchanged, in 2015 EU states could start to feel the burn. The Chief Executive of Italian Bank UniCredit, Federico Ghizzoni, recently stated that although the sanctions were causing problems for the Russian economy, his impression was that “they are even bigger for Europe”. The Italian banks operations were so far doing well in Russia, but in the case of an economic slowdown in the country, the bank would most certainly be negatively and severely impacted. The IMF has also expressed its concerns over the rising impact of Western...

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