An Economic Analysis of the EU's Sanctions against Russia in 2022.

Team members:

Nikolai Chukhin, Roman Kovalev, Semyon Trifochkin, Vsevolod Vaskin

The EU has imposed massive and unprecedented sanctions against Russia in response to the war of

aggression against Ukraine, started on 24 February 2022, and the illegal annexation of Ukraine’s

Donetsk, Luhansk, Zaporizhzhia and Kherson regions. The European sanctions against Russia are

designed to “weaken Russia’s economic base, depriving it of critical technologies and markets and

significantly curtailing its ability to wage war” [1]. The EU has banned over €43.9 billion in

exported goods to Russia and €91.2 billion in imported goods since February 2022. This means that

49% of exports and 58% of imports are currently sanctioned, compared to 2021 [1]. The EU

adopted new sanctions against Russia in response to the invasion of Ukraine [8]. In this context, the

EU has also adopted sanctions against Belarus, in response to its involvement in the invasion of

Ukraine. The latest package of sanctions against Russia was adopted by the EU on October 6th,

2022 [9].

The EU has been using sanctions as a way of punishing Russia for its war of aggression against

Ukraine. These sanctions have had a big impact on both Russia's and the EU's economies. The EU

has stopped exporting and importing a lot of goods to and from Russia, such as oil, gas, food and

machinery. This means that almost half of the exports and more than half of the imports are now

banned, compared to 2021 [9]. The sanctions have choked Russia's economy and energy sector, and

they will have long-term effects [8]. It is estimated that in 2022, Russia's economy shrank by 2.1%

because of the sanctions. Russia's economy might keep shrinking in 2023. Some experts predict that
it will go down by 2.5% (OECD) or by 0.2% (World Bank). Others think that it will grow a little bit

(IMF) [9].

But the sanctions have also achieved some positive things. They have shown Russia that the EU

and its allies are serious and united in their opposition to its actions. They have made it more

difficult for Russia to make more weapons and fight more wars. And they have weakened Russia's

economic power and stability [8]. The EU believes that sanctions can help influence Russia's

behavior, but it also recognizes that they can have negative effects on trade and jobs. So the EU

tries to be careful and smart when it decides to use sanctions.

The EU did not act alone when it imposed sanctions on Russia. It worked together with other

countries that share its values and interests, like the US, the UK, Canada, Australia and Japan. They

all agreed to punish Russia for illegally taking Crimea from Ukraine and starting a war in eastern

Ukraine in 2014. Since then, they have added more sanctions every time Russia did something

wrong, like supporting protests in Belarus[8].

The EU has never used so many sanctions against one country before. This is a very big deal, and it

is not easy to do. The EU has to make sure that all its members follow the rules, and that other

countries do not cheat or help Russia. The EU has also made it a crime to break the sanctions [8].

But the sanctions are not enough to stop Russia from fighting Ukraine. Many experts say that

Russia is still strong enough to attack Ukraine again in 2023. And some countries do not agree with

the sanctions, or do not care about them. They have different views on what is important in the

world [8].

As a group of Russian students living in Cyprus, we have mixed feelings about the sanctions

imposed on Russia by the EU. On one hand, we love our country and it’s difficult to see it facing

economic challenges as a result of these sanctions, especially when it comes to citizens. On the
other hand, we understand the reasons for supporting Ukraine and need for sanctions against

Russia.

From an economic standpoint, we can see that the sanctions have had a significant impact on

Russia’s economy. GDP has dropped, trade has declined, and the financial system has been

affected. These economic challenges can have a ripple effect on the population, potentially leading

to job losses, inflation, and decreased standards of living.

At the same time, we understand that the EU has imposed these sanctions in response to Russia’s

actions in Ukraine. We hope that a peaceful resolution can be reached so that both countries can

move forward and rebuild their economies.

As students, we are concerned about the future and hope that politics can find a way to resolve this

conflict in a peaceful manner. We believe in the power of dialogue and diplomacy and hope that our

voices can be heard.

Based on our analysis and expert opinions, it is clear that the sanctions have had a significant

impact on both Russia’s and the EU’s economies. The sanctions have asphyxiated Russia’s

economy and energy sector, with long-term consequences. Despite the challenges, analysts consider

that sanctions have already met three important objectives: they have sent the Kremlin a strong

signal of Western resolve and unity, they have permanently degraded Russia’s military capabilities,

and they have weakened Russia’s economic base. The implications for economic policy-making are

that sanctions can be an effective tool for achieving political objectives but can also have significant

economic consequences. It is important for policymakers to carefully consider the potential

economic impacts of sanctions before implementing them.

[1] EU sanctions against Russia explained

[2] Infographic - EU sanctions against Russia over Ukraine (since 2014)
[3] EU adopts its latest package of sanctions against Russia over the illegal annexation of Ukraine's
Donetsk, Luhansk, Zaporizhzhia and Kherson regions
[4] EU adopts fifth round of sanctions against Russia over its military aggression against Ukraine
[5] Why Sanctions Against Russia Work
[6] EU sanctions on Russia: Overview, impact, challenges
[7] Western sanctions and Russia
[8] EU sanctions on Russia: Overview, impact, challenges
[9] Infographic - Impact of sanctions on the Russian economy