“Russia is blatantly violating international agreements.”
According to Rehn, the European Central Bank and the national monetary authorities, including the Bank of Finland, will implement without delay all sanctions imposed by the EU and national governments within its competence.
Juha KilponenDirector of Monetary Policy and Research at the Bank of Finland, told me Helsingin Sanomat said on Wednesday that while the economic impact of the sanctions is still difficult to predict, it is clear that they will deal a heavy and far-reaching blow to the Russian economy.
“It is clear that the Russian economy is in a deep recession,” he said.
He confirmed that the situation is also reflected in the euro area and Finland. Before Russia launched its military offensive in Ukraine on February 24, the eurozone quickly recovered from the coronavirus pandemic.
“It is clear that the forecast outlook has changed clearly,” Kilponen said. “Growth could slow significantly, depending in particular on the duration of the crisis and the effects of sanctions.”
The European Council announced on Wednesday that it had imposed third-party sanctions in response to Russia’s unprovoked and unjustified military offensive. Sputnik and Russia Today (RT), two key news channels in the Kremlin’s propaganda machinery, have been banned from broadcasting in the EU.
“The systematic manipulation and disinformation of the Kremlin is being used as an operational tool in its attack on Ukraine. It is also a significant and immediate threat to the public order and security of the union. comments Josep BorrellHigh Representative of the Union for Foreign Affairs and Security Policy.
“Today we take an important step [Russian President Vladimir] Putinn manipulation operation and the closure of the faucet to Russian state-controlled media in the EU.
The European Council also announced that it had banned seven Russian banks from Swift, banned investments, participation and other contributions to future projects co-financed by the Russian Direct Investment Fund, and banned the sale, supply, transfer or export of euro banknotes to Russia.
“The European Union has accepted three sharp waves of sanctions against the Russian financial system, its high-tech industry and corrupt elite. This is the largest package of sanctions in the history of our union. Today’s decision to cut off key Russian banks from the Swift network once again sends a very clear signal to Putin and the Kremlin. said Ursula von der LeyenPresident of the European Commission.
22 high-ranking Belarusian soldiers were also subject to sanctions because of their involvement in the vassal state’s invasion of Russia.
The packages complement the sanctions announced on Sunday, February 27th. The previous package includes a ban on certain exports, a ban on transactions by the Russian Central Bank and a freeze on foreign funds, the closure of Swift by certain Russian banks and the closure of EU airspace from Russian aircraft.
Sanctions against Russia have also been imposed by Australia, Canada, Japan, Switzerland, the United Kingdom and the United States. Several private companies have meanwhile given up, withdrew, downsized or suspended operations in Russia, including Apple, Boeing, British Petroleum (BP), Disney, Exxon Mobil, Facebook, Mastercard, Netflix, Shell, Twitter, Visa and Volvo.
Kilponen saw the withdrawal of sanctions and companies leaving a lasting mark on the Russian economy.
The Russian ruble has already fallen to its lowest level in recent years, prompting locals to bother at checkouts to make withdrawals. The Kremlin has responded by banning more than $ 10,000 in cash exports, raising central bank interest rates from 9.5 percent to 20 percent and suspending trading on the Moscow Stock Exchange.
“The effects will be very far-reaching,” Kilponen said. “The crisis in the banking sector is likely to increase the impact exponentially.”
He added that the situation will have different spill-over effects in the EU and Finland. Rising energy prices are accelerating inflation, while inflation is holding back consumption and investment. Finland’s exports to Russia are suffering as a result of sanctions, but the country’s importance for foreign trade has diminished in recent years.
Russia’s share of Finland’s exports of goods has fallen from more than 11.5 per cent in 2008 to less than five per cent.
Fluctuations in Russian trade have also been seen in the past, Kilponen reminded. Trade contracted by 30 to 70 percent with the annexation of Crimea in 2014, the Russian banking crisis in the late 1990s, and the collapse of the Soviet Union in 1991.
“The big fluctuations are nothing new for Finland per se.”
Aleksi Teivainen – HT
Source: The Nordic Page