Russia won’t step back

That’s how the Russia’s Prime Minister Dmitry Medvedev started his speech recently. According to him, many major corporations and the wealthiest people of the country behind them, favor maintaining permanent restrictions on trade with the EU, as Russia’s embargo resulted in hike in consumer prices (on the banned products and subsequently on many other items as well) over the past five years.

“Generally speaking, the sanctions are never a positive thing for both parties, but that is not always the case though, as many of the large Russian corporations prefer to keep embargo,” PM said in a recent interview. Earlier, Medvedev had already pronounced himself against terminating embargo, since lifting the sanctions might seriously damage Russian agrobusiness.

“Just look at the farmers and people from agrobusiness. In communicating with the government, they keep asking us not to remove the restrictive measures against the EU,” Medvedev noted during Dialog show of Rossiya 24 TV channel.

That being said, analysts of KPMG consulting company conducted a research to see what are the results of this five-year long embargo. It turned out that one of the most visible results of imposing restrictions was an increase in food prices. The biggest hikes in prices were recorded for butter (+79%), frozen fish (+68%), white cabbage (+62%), as well as wheat flour (+25%), pasta (+34%), and sunflower oil (+35%).

The President of Russia has also noted that embargo is benefitting Russian economy in a most positive way and mentioned that “national agricultural sector has experienced a great boost in its development.” In March, at a meeting with French public representatives, Putin said that “My answer will not make our agricultural producers happy, but I have to say that if Europe lifts the sanctions, we will have to lift our counter-sanctions as well, because the initial cause will be eliminated.”

The embargo was introduced by Russia on August 7, 2014, against products imported to Russia from the USA, Australia, Norway, Canada, and the EU. Initially, the prohibited products included meat, fish, vegetables, fruits, seafood, etc. However, later the list was broadened and new countries were added to it as well (Ukraine, Montenegro, Lichtenstein, Iceland, and Albania). In July 2019, the sanctions were extended until the end of 2020.

But it is worth noting that there are countries that are eager to lift the sanctions and go back to normal trade relationships with Russia. For instance, Ukraine’s Vice-Premier Dmitry Kuleba, said in a recent interview that he was sure that the sanctions will sooner or later be lifted. He also noted that countries that have much in common but find themselves in a disagreement, will eventually reach a consensus. That, he said, is simply a law of history. “That is a painful and unbeneficial situation for businesses in European countries, we see no point in concealing that. Big corporations wish to do business as usual, so the government is thinking of going back to how it was before,” he added.

By Natalia Revishvili, ForexNewsNow.com

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