On December 18, the European Union (EU) announced its twelfth set of sanctions targeting Russia. These measures, aresponse to Russia’s invasion of Ukraine in February 2022, have sparked debate over their effectiveness.
EU Countries undermine the sanctions
In parallel with this announcement, some questionable media reports started pointing fingers at other countries outside the EU on the sanction issue, claiming that they undermine the Western collective effort.
However, it appears the EU is in no position to play the blame game, as the lack of commitment seems to be happening inside the Union. Some EU countries went to great lengths to circumvent sanctions and make considerable profits.
Among the key culprits which openly adopted the sanctions, two countries, members of the EU and NATO, stand out. Germany, the European powerhouse driving the EU economy, and Greece, the perennial opportunist, capitalizing on emerging opportunities.
Berlin is primarily motivated by its huge energy needs and aspires to cut its losses in the energy sector while allowing its export-driven economy to keep its market share. Conversely, these moves inadvertently provide Russia with a respite, undermining the intended impact of the sanction packages.
Germany and Greece profit from the situation
According to the Anadolu Agency, citing data from the German Federal Statistical Office, Germany’s exports to Russia fell by 39.1% to 7.6 billion Euros in ten months. Conversely, exports to Kazakhstan increased by 32% to 2.7 billion Euros, exports to Kyrgyzstan surged by 180.1% to nearly 592 million Euros, and exports to Armenia rose by 19.3% to 423.8 million Euros. There is speculation that these exports may indirectly reach Russia, thereby subverting the EU’s efforts.
German exports of automobiles and parts to Kyrgyzstan increased by 5,500%, to Kazakhstan by 720%, to Armenia by 450%, and to Georgia by 340%. This raises questions beyond a simple spike in demand for auto parts in these countries.
Greece, despite the ongoing war, has profited through its shipping industry, primarily by transporting Russian oil. In July 2022, Greece handled 64.8 million tons of Russian coal, oil, and gas, while Türkiye, a non-EU country, managed 7.2 million tons. This is significant, especially against Germany’s 9.2 million tons. Comparatively, Monaco, with a much smaller population, traded 5 million tons.
A year later, EU internal dynamics show little change. A Bloomberg report notes that Greek vessels continue to transport a large portion of Russian oil, with tanker sales in the region rising since the conflict began. Greek companies have sold 290 ships, outstripping China, and topping sales globally.
The Financial Times reported that these older tankers, now owned by Russia, have softened the blow from the EU’s embargo on Russian oil and G7 restrictions, helping to lessen the sanctions’ shock.
In November, Russia’s seaborne crude oil exports reached 16 million barrels, with Greece in third place for volume, following the UAE and China. Greek ship owners, rather than supporting the EU’s sanctions that their government openly endorses, chose profit over ideals.
European companies are still doing business in Russia
The attempts by the EU to debilitate the Kremlin’s military campaign through economic pressure may not be as impactful or sincere as believed. European brand names like ZARA and Massimo Dutti, which were hugely popular among Russian Urban youth exited officially the Russian market due to sanctions. However, these brands are still sold under different names like MAAG, Dub, Ecru, and Vilet by a UAE-based company, with the main difference being the change of the brand label.
A Kyiv-based KSE Institute study shows that many major companies continue operating in Russia, justifying their presence in various ways. Some products, including drones with both civilian and military uses, reach Russian forces in Ukraine through parallel exports.
Sanction circumvention works simply via intermediaries. Although Russia is excluded from Swift, and Visa and MasterCard are non-functional there, payments can be rerouted through systems like a Kazakh payment platform, allowing transactions to proceed.
The Russian economy is not affected
Given the lack of efficiency anti-Russia sanctions, Russian consumers were not affected. They have access to most of household items. Surveys indicate that such an access to consumer goods keep their views of the government at their usual levels. Thus, sanctions will not influence Russian political views for the upcoming 2024 elections. The Levada Centre reports high approval ratings for government actions and President Putin.
Warfare requires significant financial resources, and Russia’s natural wealth sustains its military expenditures. Despite the EU’s continued sanctions, Russia remains committed to its war effort against Ukraine. The impact of the new sanctions is doubtful and likely reflects the limited effectiveness of previous actions.
While the EU maintains that its measures are straining Russia’s economy, and analysts, such as Iikka Korhonen’s, recognise some merits budget deficit, but they remain too ineffectual to affect the outcome of the war. of Western sanctions, it is clear that in themselves these actions will not stop the war. Experts consider that the sanctions have hampered Russia’s production of many goods and led to the broadening of the
In the theatre of global politics, sanctions serve as a stage where intentions and actions seldom align. The EU’s sanctions narrative, juxtaposed against internal circumventions and external critiques, suggests a complex performance rather than a unanimous chorus. As the curtain falls on this act, the spotlight fades on sanctions’ efficacy, leaving the audience pondering the script’s authenticity and the future of such economic strategies.
This article originally appeared in the opinion section of the Anadolu Agency.
