Are the European Union sanctions against Russia having unintended consequences?
Although initially shaken by the restrictions, the Russian economy has shown remarkable resilience. Europe, by contrast, faces a year of glacial growth.
Concerns are also growing about the legitimacy of certain embargoes imposed by Brussels, their negative impact on European businesses and their broader humanitarian consequences, both at a general and individual level.
As the fights enter their third year, it’s clear some new thinking might be needed. A strong and united position from the European Union is needed, as is a clear, consistent and rule-compliant sanctions regime that seeks to minimize collateral damage wherever possible.
The decreasing impact of sanctions
With the introduction of the 13th package of European economic measures, Russia remains by far the most sanctioned country in the world. Nearly 2,000 Russian people and organizations have been hit with restrictions and bans have been imposed on a wide range of imported and exported products, from luxury watches to crude oil.
Embargoes on the latter proved particularly effective when first introduced, contributing to a $25 billion deficit in the Russian budget at the start of 2023. But the impact of European Union energy sanctions has diminished over the 12 In recent months, Moscow has mobilized a vast “shadow fleet” of tankers to serve other non-European markets, namely China, India and Turkey.
As for action against individuals and entities, the approach is akin to a game of whack-a-mole. Alexander Abramov, co-founder of the Russian steel giant Evraz, has for example been blacklisted by the United Kingdom for his involvement in “financing the Russian military machine”, but no such measures have been taken. was taken by Brussels. Saodat Narzieva, sister of sanctioned metals and telecommunications tycoon Alisher Usmanov, was, however, placed on the EU restriction list, but the decision was overturned after Narzieva took the case to court. Despite the purpose of sanctions, in this case they may unintentionally come into conflict with fundamental human rights, namely the right to equal protection of the law and protection against arbitrary interference with one’s property, privacy , his family or his home, in particular when The principle is impartial according to national judicial decisions.
Counting the economic balance sheet in Europe
The Russian economy, after overcoming the initial shock of Western sanctions, has returned to growth mode. According to the Organization for Economic Co-operation and Development, Russia’s GDP will grow by 1.8% this year, equivalent to that of Brazil and not far behind that of the United States. In contrast, Europe’s three largest economies – Germany, France and Italy – are each expected to grow less than 1% (0.3%, 0.6% and 0.7% respectively).
When it comes to the continent’s industrial powerhouse Germany, the negative impact of the European Union’s measures against the Kremlin is hard to ignore. In a survey by KPMG, two-thirds of German companies with ties to Russia or Ukraine said “implementing and complying with a large number of complex and rapid sanctions” was the biggest challenge which they were confronted with.
Many European companies still operate in Russia, which has prompted the European Commissioner for Environmental Affairs to call for broader taxation for these companies.
Humanitarian considerations
Alongside the economic and trade consequences, concerns are growing about the humanitarian consequences of the European sanctions regime.
Russia and its ally Belarus are key suppliers of food and fertilizer to large parts of the world, notably in Africa, where a deepening food security crisis continues to rage. Although the European Union has not officially imposed restrictions on food and fertilizer, the research highlights a trend of “over-compliance” in which companies are reluctant to participate in the flow of unsanctioned goods – despite their legality – for fear of finding themselves in a situation of violation. due to unforeseen restriction, have difficulty receiving payment from designated Russian sellers or fail to obtain shipping and insurance.
The side effects of sanctions have spread to citizens of other countries, including countries imposing the sanctions themselves. The cost of living in the European Union has significantly increased discontent among farmers and other interest groups.
Restrictions on Russian raw material exports have driven up prices on global markets, putting pressure on poorer countries that rely on imports, particularly from Russia, to meet the needs of their populations.
Less attention has been paid to the impact of sanctions on philanthropic projects funded by individuals targeted to support humanitarian and social causes. Several major charitable projects have been sponsored by people who are now on the European Union sanctions list. Although the direct effect of sanctions on these projects is difficult to calculate, the restrictions on major donors likely hamper their ability to continue supporting efforts to help vulnerable populations around the world, particularly in the most vulnerable countries. poor neighbors of the European Union. And this, in turn, significantly contributes to the increase in illegal migration to the European Union.
Paving the way for de-escalation
As the Russian-Ukrainian conflict continues, it is crucial to reassess the effectiveness and consequences of European Union sanctions. While seeking to curb Russian aggression, overbroad sanctions have strained European economies and humanitarian aid efforts. Now is the time for more surgical measures.
Streamlining restrictions to unambiguously target the Kremlin’s war machine will improve compliance and reduce vulnerabilities. At the same time, assistance mechanisms that support affected European industries would help address the economic weaknesses plaguing large parts of the continent. Finally, if carefully crafted and made public, a clear sanctions exit strategy could help pave the way for broader de-escalation.
Rethinking restrictive measures to minimize collateral damage, while maintaining pressure on Russia, represents Europe’s best chance to defend its values and long-term interests.
Politices
