Sanctions against Russia: how to preserve the European unity?
5 December 2018, 16:02

The share of goods banned from export to the Russian Federation in 2014 is very small and amounts to only 0.3% of the EU-28 exports to the Russian Federation. The top 5 countries most affected by the decrease in exports to the Russian Federation in 2014-2017 are Lithuania (5% reduction), Estonia (4.3%), Finland (4%), Slovakia (3.7 %) and Latvia (2.5%), i.e. the countries that do not voice opposition to the sanctions. Instead, countries where politicians occasionally make statements about lifting the sanctions, have been affected much less: e.g., Germany by 1.3%, Italy by 1%, France by 0.6%, and Greece by 0.7%. This was told by the analyst of the New Europe Center during a round table “Sanctions against Russia: how to preserve the European unity?”.

Round table participants was Kateryna Zarembo, Deputy Director of the NEC; Ernst Reichel, Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany to Ukraine; Serhii Leshchenko, Deputy Chief of the Head Department for Foreign Policy and European Integration of the Presidential Administration of Ukraine; Laslo Csaba Pap, Deputy Head of Mission, Embassy of Hungary in Ukraine; Michał Giergoń, Deputy Head of Mission, Embassy of the Republic of Poland in Ukraine; Alexander Markus, Chairman of the German-Ukrainian Chamber of Industry and Commerce; Margus Särglepp, Deputy Head of Mission, Embassy of the Republic of Estonia in Ukraine; Tetiana Levoniuk, Junior Analyst at the NEC; Maria Tomak, coordinator of the Media Initiative for Human Rights.

At the beginning of the event Tetiana Levoniuk presented key findings of the NEC’s policy commentary “Who Will Be the First? Which Countries Would Dare to Violate the Unity of the European Union Against the Sanctions Imposed on Russia?”.

“The EU has successfully diversified its agricultural exports. For instance, an increase in exports of agricultural products to third countries from the EU-28 in 2014-2017 has more than tripled the amount of the reduction of export to Russia: EUR 18 billion versus 5.3 billion,” Junior Analyst at the NEC noted.

“In 2017 (compared to 2016), 26 countries of the European Union (with the exception of Malta and Croatia) showed an increase in exports to the Russian Federation. Exports from France increased by 12%, from Italy by 16%, and from Germany by 17%. The average growth for the EU-28 is 12%. In 2018 the tendency for growth in turnover with Russia continued for the majority of the EU member states,” Mrs. Levoniuk added.

Main theses of the speakers of the presentation.

Ernst Reichel

Negative effects of anti-Russian sanctions on the EU member-states are not as significant as were in 2013.

  • «Back in time, when sanctions were put in place, it was notable that sanctions were not dramatic. But on the other hand, there was a shock, when the sanctions came into force. And then over the years, the companies concerned compensated it by diversifying. When the whole story of sanctions began, the effect was more marked in 2013 than in 2017»

Level of macroeconomy is not representative in case of European losses through the sanctions. Main victims are particular enterprises that consider Russian market as vital

  • «Certain business arias, certain regions in Europe have been particularly affected insofar they were particularly dependent on the business with Russia. In Germany it was shipbuilding. There are loses for individual firms, not aggregated statistical data. The effect for individual firms was dramatic and existential».

Expectations of Ukrainian society regarding the sanctions of the EU against Russian Federation are quite unrealistic: such decisions are actively debated.

  • «Here people tent easily to make demands to the EU and its member-states. But they don’t worry much, whether these demands are politically realistic and actually could be put into action. But right now, the EU debate is less about additional sanctions against Russia. But about the effort to defend existing sanctions. You have to be smart about the sanctions. You have to pick arias where you inflict costs, but don’t hurt yourself as much».

Serhii Leshchenko

Forced diversification of export had not only provided the EU states with new markets, but also preserved Russian one for future trade.

  • «Russian authorities are trying to playing the dilemma between economy benefits and values. That is why, they launched countersanctions. Such a decision was unpredictable for the EU. But export diversification saved all the situation. When the territorial unity of Ukraine is fully restored, and the sanctions are nullified, Russian market is available to the EU again. In other words, European companies have not only gained new markets, but also potentially preserved Russian one».

One of priorities of the Ukrainian government is the «Azov package of sanctions».

  • « This includes sanctions rollover against the constructers of so-called Kerch Bridge. We are also expecting a decision on the illegal elections on the temporary occupied territories of Donbass. We have a list of those involved in a recent act of aggression against Ukrainian sailors in Kerch strait. The EU should consider setting up sanctions against them as well».

Laslo Csaba Pap

Hungary is supporting the unified respond of the EU against illegal actions of Russia in Ukraine (including Crimea and Donbass occupation, aggression in Azov sea).

  • «The sanctions should serve to reach state sovereignty of Ukraine. To serve the purpose that Ukrainians can choose the development model, the political model, and the economic model. Hungary supporting unity of the EU regarding sanctions. That’s why, I think the 13th of December will be your lucky day».

Michał Giergoń

Opposite to the EU, Russia imposes sanctions harming own citizens.

  • «The EU always tried to find a solution which is the less harming for our citizens. In contradiction to what the Russian Federation does. Of course, the Russian countermeasures hit many exporters from Europe. But the main issue is that the countermeasures of Russia are hitting and inflicting significant damage to Russian society. The government in Moscow doesn’t take into account the wellbeing of people».

Alexander Markus

Political role of the anti-Russian sanctions neutralizes economy losses of the EU states.

  • «If you look at sanctions, you have two effects. One is on trade. But then you have foreign companies, that work inside the country. Not all German companies are trading with Russia. They also had invested in Russia. But these sanctions are a political question. And the economies sphere has to adopt to this situation».

Margus Särglepp

If neighbor-states argue about values, they cannot cooperate in terms of economy.

  • «Estonia being a neighbor of Russia, it makes only sense to have very high exposure to Russian markets. But there is an economic reality, there is a political one. And we make certain choices because of our values. And if our perceived partner is not able to be on the same page with us on these values, then there is a parting of ways. And here Estonia is not experiencing the parting of ways with the Russian market for the first time».

Maria Tomak

Ukraine should improve its sanctions policy.

  • « Only in that case, Ukraine will be able to advocate new sanctions on international arena against those involved in human rights violation».

The EU should extend sanctions in light of the attack on Ukrainian sailors in in Kerch strait.

  • «Numerous violations are already Russians do not allow attorneys to visit injured sailors. They accuse Ukrainians of criminal offenses, though they are prisoners of war. We can already talk about involving judges and prosecutors, although the investigation team remains unknown. Of course, sanctions against all these people should be introduced».

All photos from the event are available at the link

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