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Should the US and EU recognize that their global influence in the 21st century is much more limited than expected? EU chief diplomat Josep Borrell recently described gloomy assessments of the effectiveness of punitive measures as “simply not correct”. Questions and answers at a glance:
What is the state of the Russian economy after unprecedented punitive measures from the West?
From the EU’s perspective, things are anything but rosy. According to figures from Brussels, Russian economic output shrank by 2.1 percent last year. The high-tech sectors, which had grown steadily until the start of the war, suffered particularly heavy losses. According to the EU, motor vehicle production fell by 48 percent in 2022 from the previous year, and production of computers, electronics and optics fell by eight percent.
Looking at the current year, the EU recently referred to a report from the Organization for Economic Co-operation and Development (OECD). According to him, Russian economic output is likely to decline again by up to 2.5 percent.
In addition, the situation of the Russian state budget is expected to deteriorate. It is said that the government in Moscow still has budgetary room to maneuver. Funding for schools, hospitals and roads is already being cut, while almost a third of the budget is spent on defense and homeland security.
Despite extensive export restrictions, the ability to wage war appears to have hardly suffered. Why is that?
One reason is that in many areas the Russian defense industry is not dependent on supplies from the West. Moreover, the West cannot dictate to third countries which products they can and cannot supply to Russia. For example, Russia now simply imports some high-tech products from or via China instead of from the EU or other neighboring countries. The West has hardly any influence to prevent possible new arms transactions by Russia with countries such as Iran or North Korea.
However, politicians are betting that the sanctions will increasingly have an impact beyond the military sector. It is noted that most modern aircraft of Russian airlines rely on European and American spare parts and technical assistance, which are prohibited.
Recently there have been increasing voices that the oil sanctions against Russia are not having the desired effect. Is that correct?
The sources for this are confusing. EU chief diplomat Borrell claimed at the end of August that the oil sanctions had proven successful. He pointed out that in April 2023, the International Energy Agency (IEA) reported an average Russian crude oil export price of around $60 per barrel, corresponding to a discount of $24 per barrel compared to the global oil price. The IEA estimates that Russia’s oil revenues are down 27 percent overall compared to the previous year. At the same time, it is positive that the total volume of Russian oil exports remained as intended. This contributed to the stabilization of world markets.
However, the government in Moscow recently boasted that the price of oil from the Russian brand Urals is now above the $60 price ceiling set by the West. In addition, reference is made to figures showing that Russia earned $17.1 billion in August from oil exports to countries such as India and China.
One reason for the limited effectiveness of sanctions is the principle of punitive measures. In order to enforce the price ceiling on Russian oil exports to non-EU countries, it has been decided that services important for Russian oil exports should in the future be provided with impunity only if the price of exported oil exceeds does not exceed the price ceiling. However, the EU can only impose punitive measures for evading sanctions against domestic companies.
How does the EU view possible sanctions violations?
Borrell recently admitted that circumvention of EU sanctions must be combated more vigorously. “To this end, we are stepping up our cooperation with key third countries and urging them to closely monitor and take action against the trafficking of EU-sanctioned goods, especially those found on the battlefield in Ukraine,” he said. However, there is also room for maneuver in the control of Western companies.
In Germany, left-wing politician Sahra Wagenknecht and representatives of the AfD, among others, are calling for the lifting of sanctions against Russia. What are they about?
They are less critical of the effect of the sanctions on Russia than on Germany. Wagenknecht recently said in the Bundestag that the war in Ukraine was of course a crime. But with an “unprecedented economic war” against Russia, the government risks poverty for families in Germany and jeopardizes the supply of cheap energy to German industry. Germany needs “Russian raw materials and, unfortunately, Russian energy for the foreseeable future.”
But even some left-wing politicians distanced themselves from it. Wagenknecht “does not speak for the left,” explained deputy party leader Lorenz Gösta Beutin, for example.
Source: Blick
I am Amelia James, a passionate journalist with a deep-rooted interest in current affairs. I have more than five years of experience in the media industry, working both as an author and editor for 24 Instant News. My main focus lies in international news, particularly regional conflicts and political issues around the world.
