BRUSSELS: At a technology fair in Moscow last month, European executives faced the new reality of doing business in Russia since the West imposed sanctions: the number of companies at the international showcase had shrunk by half from a year ago.
“The impact on business couldn’t be clearer. Fewer stands, fewer companies,” said Mark Bultinck, a sales executive for Belgian digital screen maker Barco, which had a booth at the annual expo for the audiovisual industry.
The impact of the sanctions was already clear to Barco.
The company lost Russia’s biggest shipbuilder as a client when the United States and the European Union blacklisted United Shipbuilding Corporation in July, meaning Barco could no longer sell screens to the company for its vessel training simulators.
Barco’s experience shows how sanctions are having a broad impact not just on Russian companies but on European ones too and at a time when Europe’s weak economy can ill afford it.
The European Union and the United States imposed economic sanctions on Russia in late July, targeting the Russian energy, banking and defence sectors to punish Moscow’s support for rebels in eastern Ukraine, the West’s toughest steps yet.
As EU governments consider blacklisting more Ukrainian separatists and potentially more Russians and companies over the crisis in Ukraine, anecdotal evidence and new EU data show the economic costs for Europe of pressuring the Kremlin.
In August, the month after sanctions were imposed, EU exports to Russia fell 19 per cent to 7.9 billion euros (9.91 billion dollar) compared to July, a loss of almost 2 billion euros, according to the EU’s statistics office Eurostat.
Although the data is not adjusted for seasonal swings, exports were also down 18 per cent compared to August 2013 at a time of year that is traditionally busy for exporters.
The drop partly reflects the food ban Moscow imposed on the European Union in August in response to the West’s sanctions.
But it goes well beyond that. Total EU exports fell 12 per cent in the first eight months of this year compared to a year ago. In August, EU exports of machinery and transport equipment such as cars and tractors fell 23 per cent compared to July. Compared to a year ago, those exports fell 21 per cent. (PTI)
Manufactured exports fell 16 per cent across the 28-nation bloc in August. Germany, which accounts for one-third of sales to Russia, saw a sharp drop in sales of those goods, while Italy’s manufactured exports tumbled by almost half. More Reuters PR SB1214