What's in the new sanctions package?
The Russia-Ukraine military conflict is evolving in a complex and unpredictable manner, especially after the Ukrainian armed forces attacked Russia's Kursk region. And in order to continue to put pressure on Russia on the economic front, the EU, as usual, has responded to each increase in tension in the Russia-Ukraine conflict by imposing new additional sanctions.
The EU is currently working on a potential new sanctions package, according to Izvestia. While it did not provide details as it is “under internal discussion,” a member of the European Parliament, Tomasz Zdechowsky, told Izvestia that the new sanctions package could target Russia’s metallurgy industry.
Illustration photo.
Previously, in March 2022, the sector was first subject to Western restrictions as part of the fourth round of sanctions. These restrictions then affected a wide range of steel products, especially sheet metal, tin products, fittings, stainless steel wire rods, seamless steel pipes, iron products, etc.
Then, in October 2022, in the eighth package of sanctions, sanctions were extended to imports of steel products from Russia to Europe, including sheet steel, a semi-finished product used in the production of flat steel products. At the same time, the EU also introduced quotas to allow member states to continue importing necessary semi-finished products from Russia. For example, from October 7, 2022 to September 30, 2023, EU countries are allowed to import 3.75 million tons of shale from Russia. This figure will be further extended for the period from October 1, 2023 to September 30, 2024.
Observers say the new sanctions could also affect the fishing industry. In the sanctions package introduced in April 2022, the EU banned imports of crustaceans and caviar from Russia. However, according to the German publication Die Welt, the EU is also discussing a ban on fresh fish, especially Russian pollock, in Europe. The Baltic states and Lithuania in particular are firmly implementing these restrictions on Russia. According to Die Welt, 85% of pollock consumed in Germany currently comes from Russia.
Steffen Mayer, head of the German Fishing Industry Confederation, said Germany would face a difficult time if it could not import salmon and cod from Russia. If the embargo were imposed, prices for these products in Germany would skyrocket, leading to thousands of job losses. According to Steffen Mayer, the fish processing industry in Germany could collapse completely.
Can sanctions solve the problem?
It is worth noting that a month before the eighth package of sanctions was imposed, nine major European metallurgical companies wrote to the European Commission asking that a ban on imports of semi-finished steel not be imposed. The reason given by these companies was that 80% of imports came from Russia and Ukraine. With Ukrainian factories forced to close due to the escalating military conflict, supplies from Russia became extremely important for the European metallurgical industry.
However, according to Ivan Timofeev, Director General of the Russian International Affairs Council (RIAC), it is not excluded that the EU may seek alternative sources of raw materials from Russia and reduce or even cancel import quotas in the new sanctions package.
“A typical example concerns the energy sector. Previously, the media and experts believed that there was no European alternative to Russian gas. But in the end, this is the sector that Europe tightened the most, and even moved towards a complete “weaning” on Russian gas. There were also opinions that without Russian diamonds, business in Belgium would collapse. But this item remains on the list of embargoes,” Ivan Timofeev told Izvestia.
Regarding the risks associated with sanctions, Mr. Ivan Timofeev said that European companies, owners and consumers will be the first to be affected by rising prices. As for Russia, the metallurgical industry in particular and the Russian economy in general will also inevitably be affected. Russia's only solution is to quickly look for alternative partners, possibly targeting the African market in the context of increasing demand for infrastructure development in this region.
Obviously, sanctions are always a double-edged sword and, to a greater or lesser extent, they will affect the economies of EU countries, given the fact that Russian products are quite competitive. According to expert Ivan Timofeev, when any sanctions are introduced, there will be winners and losers.
In 2014, Western sanctions were imposed on Russia’s energy sector, especially its Arctic projects. Many US companies were forced to cut back on their operations due to losses caused by the sanctions. On the other hand, there were those who lobbied for these sanctions to make a profit. But ultimately, consumers will be the ones who will be hit hardest by rising prices and rising inflation.
Russia, for its part, has repeatedly pointed out to Western countries that sanctions imposed on Moscow are counterproductive and not a solution to the problem. Economic sanctions have not led to the collapse of the Russian economy - despite the huge losses, the country is quickly adapting to the new conditions.
The Russian Finance Ministry said that in May 2024, the federal budget recorded a surplus for the first time in a year, with revenues reaching 2.6 trillion rubles ($29 billion) and expenditures reaching 2.1 trillion rubles. According to the Central Bank of Russia (CBR), the country's gross domestic product (GDP) grew by 4.4% on an annual basis in the second quarter of 2024 and is expected to grow by 3.2% in the third quarter of 2024.
On August 16, Dmitry Birichevsky, Director of the Department of Economic Cooperation of the Russian Foreign Ministry, said that many countries in the world have not joined the sanctions against Russia, but have been forced to reduce the scope of cooperation due to concerns about secondary sanctions imposed by the US. According to Dmitry Birichevsky, there have been more than 20,000 sanctions imposed on Russia to date, including restrictions on individuals and organizations, targeting key sectors of the Russian economy, as well as asset freezes.
Meanwhile, Izvestia newspaper quoted Vladimir Dzhabarov, First Deputy Chairman of the International Committee of the Federation Council (Upper House) of Russia, as saying that the economies of European countries have also suffered heavy losses since the start of the embargo war with Russia. “European countries have lost cheap raw materials and continue to cut the branch they are sitting on. These countries refuse Russian oil, but are forced to buy high-priced oil through third countries. Next, Europe “weaned” off Russian gas to start buying US liquefied natural gas at twice the price, but the US does not have enough reserves to meet Europe's needs. Europe will have to look for new suppliers, most likely from the Middle East. And this time, if Europe does not want to buy Russian metallurgical raw materials, Moscow will look for other alternative markets,” Vladimir Dzhabarov said.
According to the Senator, once the Russia-Ukraine military conflict ends, the sanctions will begin to ease. Because if Europe decides to maintain the restrictions, it will cause great difficulties for these countries due to the lost benefits from the partnership with Russia.
Ha Anh
Source: https://www.congluan.vn/nhung-dau-hoi-phia-sau-viec-lien-minh-chau-au-lai-chuan-bi-goi-cam-van-nga-post308826.html
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