November 30, 2022

Raven Tribune

Complete News World

Putin’s economy is so bad after EU sanctions

It is assumed that the demand for goods on the sanctions list cannot be met by exports from countries like Russia or China. Problems with machinery, auto parts and data storage are likely. However, wealthy Russian businessmen have long created routes for more luxury cars to enter the country, for example through Russia’s neighboring country, Kazakhstan. Putin has always insisted that everything will continue – at a higher price.

Problems for the Defense Sector

However, an EU export ban on so-called dual-use items is already crippling Russia’s military capabilities, according to the EU. For example, important arms factories producing anti-aircraft missiles and tanks had to be shut down due to shortages of imported goods.

In addition, EU export sanctions are affecting IT companies, mobile phone providers and the Russian car industry, according to Brussels. Soviet brands such as Moskvich are now making a resurgence in Russia after Western car manufacturers left. The government wants to make cheap loans possible so people can buy more cars again. However, many Russians do not have money.

According to EU information, Russia’s civil aviation is affected by the ban on flying in European airspace – but above all by export restrictions on spare parts and services provided by the EU and the US. From the EU perspective, most Russian airlines cannot meet international safety requirements. From the EU’s point of view, the problems in Russia are exacerbated by the fact that, according to estimates, around 70,000 IT professionals have recently left the country, and another 100,000 are likely to follow.

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Energy barriers have an effect

Experts expect significant effects from the implementation of the already decided coal and oil ban. The ban on Russian coal imports will come into full force on August 10 – affecting a quarter of global Russian coal exports worth around eight billion euros a year, according to the EU.

The value of Russian crude oil imports to the EU in 2021 is around 48 billion euros and the value of petroleum products is 23 billion euros. About 90 percent of this will be removed when imports of Russian crude oil — and refined Russian petroleum products — begin on February 5.

Russian oil goes to India

According to one expert, the disappearance of the EU market will cause significant strategic problems for Russia, because according to EU statistics, 45 percent of the national budget is provided by oil revenues. Markets are already avoiding trading in Russian oil. Russian oil was recently offered at a discount of up to 35 euros per barrel (159 liters). According to Moscow, India is particularly pleased with the deliveries from Russia.