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The impact of Russian economic sanctions

August 9th, 2014

A conservative columnist writes that the embargo imposed on food produce by Russia as a retaliation for Western sanctions will harm Hungary. She suspects that the US is insisting on such harsh sanctions against Moscow in order to strengthen its economic position in Europe.

The embargo on food products introduced by Moscow will have consequences for the 1,500 Hungarian exporters to Russia, Anna Szabó writes in Magyar Nemzet. The conservative columnist believes that the economic retaliation campaign between the West and Russia is a lose-lose game both for the EU and Moscow. Hungary may also suffer from this tit-for-tat, Szabó remarks, and recalls that the Forint (with other regional currencies) has weakened over the past few days and, consequently, Hungarian public debt calculated in Euros has risen. If the crisis deepens, Russia may also consider closing the gas tap to Europe and restrict its airspace in retaliation for Western economic sanctions, Szabó speculates. These policies would be very harmful for Central European countries which are highly dependent on Russian energy supplies, she warns.

“Not that all this would bother anyone in Washington,” she continues – the retaliation campaign ‘may even serve Washington’s economic interests.’ If the Russian embargo weakens Europe’s position in Russia ahead of the implementation of the US-EU free trade agreement, US companies may gain a stronger leverage in European markets, Szabó contends. In her concluding remarks she wonders whether the sanctions will help in any sense to resolve the Russian-Ukrainian crisis.

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