Posted: 22.02.2024 16:49:59

Expert: EU sanctions didn’t hurt Russia, but worsened economic situation in EU

Former Chief Economist at the Institute of International Finance (IIF) Robin Brooks stated that the sanctions the European Union imposed after the start of the special military operation in Ukraine did not have a major impact on the Russian Federation’s economy but aggravated the economic situation in the EU, TASS reports

In an article published in the Financial Times newspaper, Robin Brooks noted that two years after the start of the special military operation, it became clear that the EU sanctions failed to significantly affect Russia. According to the expert, the first and most obvious problem is that Western countries placed too much hope in sanctions in the financial sphere. As an example, Robin Brooks cited the disconnection of Russian banks from international payment systems and the freezing of assets. “But these measures affect stocks, not the flows, which matter for economic activity,” the expert stressed. 

According to the economist, restrictions due to the increase in the value of Russian exports led to the fact that Russia was able to accumulate foreign assets. “By sanctioning some Russian financial institutions, the West only provoked the transfer of accumulated foreign assets from sanctioned banks to non-sanctioned ones,” Robin Brooks explained. 

The expert stated that the introduction of a ceiling on oil prices also did not yield significant results, since Western operators themselves violated the established rules. He also criticised the ban on the import of Russian diamonds, which ‘did not extend to industrial diamonds’. 

The expert named numerous exceptions as another factor that reduced the effectiveness of the sanctions. “In times of heightened geopolitical tensions, vital Western security objectives cannot be achieved due to short-term interests and Western companies’ profit-seeking,” the expert noted. The failed sanctions policy is negatively affecting the economic situation in the EU, and the moment when the countries of the European Union will have to experience its consequences is ‘fast approaching’.