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EU Extends Russia Sanctions
World Economy

EU Extends Russia Sanctions

The European Union has extended economic sanctions against Russian for a further six months, an EU official said. This follows the EU’s decision Friday to extend sanctions against Crimea for another year.
The decision to extend the sanctions against Russia was announced by the EU Council's press officer for foreign affairs, Susanne Kiefer, RT reported.
The sanctions are being maintained until January 31, 2016 to ensure the Minsk agreement is implemented, she wrote in her Twitter account.
The Kremlin has in the past condemned western sanctions as "destructive." The sanctions consist of asset freezes on some Russian companies and individuals as well as travel bans against certain officials.
The sanctions, and the events that preceded their imposition, reflect the tug-of-war between East and West over the future of Ukraine–and the divisions within the country as well, between ethnic Russians and Ukrainian speakers who want closer ties with the European Union.
The European Union will review the sanctions regime against Russia in six or seven months, Italian Foreign Minister Paolo Gentiloni told reporters in Luxembourg.
Dialogue with Russia, especially on Libya and Syria, is “crucially important” for the EU, Gentiloni added.
It wasn’t Russia that began the restrictive measures in the first place, but it would answer reciprocally, Russian presidential spokesman Dmitry Peskov told reporters on Monday.
The policy of sanctions harms not only business activity in Russia, but European taxpayers as well, he added.

Political Declaration
Agreement on the extension of sanctions was reached at a meeting of the EU Permanent Representatives Committee on June 17. In March, the EU summit adopted a political declaration of intent to extend economic sanctions against Russia for another six months. In the document, the lifting of sanctions was linked to the full implementation of the conditions of the Minsk agreement, for the period up until the end of the year.
EU sanctions against Russia include restrictions on lending to major Russian state-owned banks, as well as defense and oil companies. In addition, Brussels imposed restrictions on the supply of weapons and military equipment to Russia as well as military technology, dual-use technologies, high-tech equipment and technologies for oil production. No sanctions were imposed against Russia’s gas industry.
The sanctions also target many senior officials in Russia and in the separatist leadership, including Crimean leaders, and organizations linked to them.
The EU imposed sanctions against Russia on August 1, 2014, and tightened them in September the same year. In October, a separate decision by the EU Council loosened restrictions against European subsidiaries of Russian state banks.

Countersanctions
As a countermeasure, Russia introduced a food embargo against countries that supported the sanctions, and has pursued a policy of import substitution since then.
The impact of the countersanctions on the EU economy is higher than initially forecast by Brussels, according to a recent study by the Austrian Institute of Economic Research (WIFO).
As a result of the sanctions, up to 2.5 million Europeans are facing job losses, and the EU could see a €100 billion ($113.4 billion) loss in economic development.
WIFO calculated that if the sanctions are continued for the next few years, Germany would lose 465,000 jobs due to reductions of exports to Russia.
Italy would lose 215,000 jobs, Spain 160,000 jobs, France 145,000 jobs and the UK 110,000 jobs.
Switzerland, which is not part of the EU but followed Brussels' lead on sanctions, would see losses of 45,000 jobs, including 5,000 in the tourism sector, the study said.

 

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