EU: Sanctions causing steady degradation of Russian economy

BERLIN (Parliament Politics Magazine) – According to EU chief Ursula von der Leyen, the Russian economy is “degrading slowly but surely” in the face of “more and more severe” sanctions.

On the sidelines of the G7 conference, the president of the European Commission said that they could see that the sanctions were eating and gnawing at Russia’s economy more and more. The many industries could be seen to be slowly but surely deteriorating as a result of export restrictions. 

Therefore, no longer did upgrades, technology, everything that was needed, or the commodities that were needed to modernise come from Russia, they said.

It happens as Russia’s potential foreign debt default is being discussed.

Von der Leyen added that the G7 nations concurred to investigate a possible price cap on oil.

As it was evident that the European Union was currently pulling away from Russian oil as the mechanism. It should not occur that Putin took that oil, went to the global market where prices were rising, and then filled his war chest, she said.

Therefore, it required a broader alliance to say they were willing to pay a good price, but not a rapidly increasing price. It was not only good to avoid adding to Putin’s war chest, but it was also extremely important for the developing countries — the countries that were vulnerable— because the skyrocketing oil prices had a significant negative impact on them, she added.

In light of worries that the Ukraine war could cause a global crisis, discussions at the G7 summit are also anticipated to centre on global food supplies.

25 million tonnes of grain were reportedly sitting in silos in Ukraine last month as a result of “a lack of infrastructure and the blockade of ports,” according to a UN report.

Although Von der Leyen branded Russia’s blockade “outrageous,” she expressed optimism for the export of food from Ukraine.

She claimed that although Ukraine’s grain exports were rising each month, they were still considerably behind what the nation had been doing before the war.

Von Der Leyen said that it was atrocious that Russia was exploiting that food to threaten the world. As long as Russia was preventing it, they strived to assist Ukraine as much as they could in moving grain through various routes, such as trains, roads, or even the Danube River and that was improving.

To give some numbers, they had sent out 1.2 million tonnes in April, 1.7 in May, and 2.5 in June (million tonnes), she said.

As it could be seen, they were getting much better at assisting Ukraine with grain exports, but obviously, it was not enough because, before the war, Ukraine exported roughly 5 million tonnes per month; that was where they needed to get to, she added.