The European Union’s made a mistake by imposing fresh economic sanctions on Russia as they were rolled out after calm returned in Ukraine following a ceasefire agreement a week earlier, said Eckard Cordes, who chairs Germany’s Committee on Eastern European Economic relations on Sunday.
Cordes said the lobby, which boasts membership of around 200 businesses with interests in Russia, was expecting the sanctions to be postponed in order to boost the ceasefire.
“We had hoped that the ceasefire could be strengthened by delaying the sanctions,” Cordes said in an interview with the Frankfurter Allgemeine Sonntagszeitung newspaper, reported Reuters.”The new sanctions will not help to relieve tensions. We’re probably at the start of a perilous spiral of sanctions.”
The European Union and the United States rolled out fresh penalties against Russia last Friday, in a bid to pressurize Moscow to stop interfering in the Ukraine conflict. The sanctions from EU limited access to funds by Russian oil giants such as OAO Rosneft and OAO Transneft, while U.S. sanctions were targeted at Russia’s largest bank, Sberbank, and a defense firm. They also banned U.S. companies from assisting five Russian oil companies from exploring deposits that were hard to reach.
The lobby group forecasts that Germany’s exports to Russia may decline by up to 20-25 percent in 2014 owing to the sanctions. However, Germany Economy Minister Sigmar Gabriel was adamant that the sanctions will force Putin to stop interfering in Ukraine.
Germany accounts for the bulk of Russia’s trade with the European Union, exporting nearly 36 billion euros worth of goods there in 2013, nearly a third of what EU exports there. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com