World Economy

Russia Says EU Risks $50b Loss From Sanctions

Russia Says EU Risks $50b Loss From SanctionsRussia Says EU Risks $50b Loss From Sanctions

Economies across the European Union will lose about €40 billion ($50b) this year, with the damage estimated to widen to €50 billion in 2015, Russia’s Foreign Minister Sergey Lavrov said, citing figures from the EU itself.

There are so far no exact figures for the damage incurred, but the European Union has made some preliminary estimates and said the damage could be as high as €40b this year, RT quoted Sergey Lavrov as saying.

The foreign minister was addressing a group of business leaders at the Association of European Businesses (AEB), a Moscow-based lobby group that represents the interests of more than 600 European companies in Russia.

Lavrov called forsanctions against Russia that target state-owned companies as well as individuals, to be lifted. Then Russia would cancel the country’s one-year food ban against the EU, a penalty which could cost the EU $6.6 billion in exports.

“Decisions in Brussels, in particular, to impose sanctions against Russia, were made under strong American pressure,” Lavrov said.

Russia announced the food ban in August, but only after the West had introduced several rounds of sanctions over the country’s perceived role in the Ukraine crisis.

According to Lavrov, sanctions are a “one-way tool” and that Russia never wanted to join the tit-for-tat political game - but was forced to.

 EU to Reconsider Sanctions

The European Union’s sanctions against Russia will be revised in the end of October, the EU ambassador to Russia said on Tuesday.

“The decision will be made depending on the progress (on the Ukrainian conflict) and the fulfillment of Minsk agreements,” Vigaudas Usackas said.

Since March, the EU has imposed nine packages of sanctions on Russia, including banning five state-owned banks from taking long- and mid-term loans in Europe, banning equipment and know-how supplies to the country’s oil sector and freezing EU assets of 119 Russian and Ukrainian officials and barring them from entering the union.

 Defying the Dollar

The central banks of China and Russia have signed a 3-year ruble-yuan currency swap deal up to $25 billion, in order to boost trade using national currencies and lessen dependence on the dollar and euro.

On Monday, China’s Central Bank announced the 150 billion yuan (815 billion ruble) currency swap between the Russian ruble and Chinese yuan. In terms of the Chinese currency that is $24.5 billion, and in Russian rubles, $20.1 billion.

“We need to expand the practice of using national currencies in trade. Currently they only account for 7 percent of turnover,” Prime Minister Dmitry Medvedev said at the 18th annual Russian-Chinese Commission, also attended by Chinese Premier Li Keqiang.

Using more local currencies will speed up trade between the two countries who are aiming to reach $100 billion by 2015. Trade between Russia and China is already nearly $90 billion and is scheduled to hit $200 billion in the next six years.