How is Russia dealing with the sanctions?
The EU has imposed a total of eleven sanctions packages against Russia since February 2022. Washington has also repeatedly expanded the list of Russian companies with which US firms are not allowed to trade. Europe's press looks at the impact of this policy from different angles.
Kremlin plundering its own country
Economist Vladislav Inozemtsev sees the forced administration of Russian subsidiaries of companies like Danone and Carlsberg as short-sighted. He writes in The Insider:
“Since the early days of Putin's rule, the Russian economy was largely fueled by foreign investment, which laid the foundations of entire industries like the automotive branch and transport engineering. Today, Putin employs a transactional approach, taking hold of idle assets in the hope that new owners can make them operational again (this is the idea behind selling enterprises to Chinese investors) or seizing fully functional assets to reward his loyalists. In the next three or five years, Russia is unlikely to benefit from any foreign investment, so it's a free-for-all now.”
Investors won't get out scot free
Russia prohibits the sale of companies without the approval of the state commission for foreign investment. The fact that foreign companies leaving the country now often receive less than half of their market value in such cases is simply a business risk, Verslo žinios puts in:
“This slows down the process of foreign investor withdrawal, which is taking place nevertheless. ... Arrests, confiscation of assets, and expropriation are part of the regime's modus operandi. And not only in Russia but also in Belarus, from which foreign investors are also keen to leave with as few losses as possible. ... If you admit that investing in Russia was a mistake, you should find the strength to bear the consequences.”
Dire shortages in the workforce
Gazeta Wyborcza analyses the consequences for the Russia job market:
“Russians' wages are rising rapidly. However this is not a sign of growing prosperity, but yet another symptom of the problems plaguing the Russian economy as a result of the war in Ukraine. ... Unemployment is falling because some Russians have been sent to the front and hundreds of thousands of others have left the country to avoid conscription. In addition, the need for labour has been exacerbated by the increased production of weapons and substitute goods, since imports to Russia have been restricted as a result of the war.”
Chinese not Western cars for officials
Putin, Finance Minister Siluanov and Duma Chairman Volodin have all publicly demanded that Russian officials drive "domestic cars" as their state vehicles. Automotive journalist Igor Morscharetto asks for some wiggle room on NSN:
“Until now, everything produced in Russia was considered Russian: BMWs from Kaliningrad, Hyundais and Kias from St. Petersburg. If, on the other hand, only the production of AvtoVAZ, GAZ and UAZ vehicles is considered Russian we'll find ourselves in a strange situation: AvtoVAZ produces four models, UAZ three - and they are all very old. If, however, we consider the [Chinese brand] Haval in the Tula region as Russian, for example, the problem would be resolved.”
Time to name names
According to data from the Ministry of Economics, trade relations with Russia are declining. The names of the companies that continue to trade are not published by the ministry. Neatkarīgā calls this policy into question:
“Both the EU and our parliament regard Russia as a state that supports terrorism (in fact, Russia itself is a terrorist state). Consequently, any kind of cooperation with this country is supporting terrorism - albeit indirectly. Why should this remain a trade secret? ... This is not only deeply shameful for these companies, but also supports Russia - in its bloody war against Ukraine. And that is a crime.”