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International Relations, PUBLICATIONS

Economic impact on the EU of sanctions over Ukraine conflict

Written by Marcin Szczepański
Confrontation between Russia and European Union

© staras / Fotolia.

Russia is the European Union’s third biggest trading partner. In 2014, trade volume between the European Union (EU) and Russia decreased, mainly due to the impact of the recession on the Russian economy, as well as the conflict in Ukraine which led to EU sanctions and Russian countermeasures.

Beginning in early 2014, the EU introduced and extended a range of diplomatic and economic sanctions against the Russian Federation in protest at Russian involvement in destabilising Ukraine and violation of Ukraine’s territorial integrity. Russia has retaliated with an embargo on certain EU agricultural products. Both the EU and Russian measures will be in place until at least June 2016.

It is hard to disentangle the effects of these sanctions from those stemming from the deteriorating economic situation in Russia. Although the overall impact on the EU economy has been rather limited, certain sectors and countries are more significantly affected. Estimates of the impact vary, but indicate overall that the European economy is resilient to the adverse effects of falling trade with Russia. Importantly, the EU’s financial sector is not considered to be systemically threatened by its exposure.

The most visible direct effect is the substantial fall in EU agri-food exports to Russia. The losses are, however, mitigated to a large extent by redirecting exports to alternative markets.

Read the complete briefing on ‘Economic impact on the EU of sanctions over Ukraine conflict‘ in PDF.

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The content of all documents (and articles) contained in this blog is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the European Parliament. It is addressed to the Members and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy. Copyright © European Union, 2014. All rights reserved

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