EU sanctions against Russia boomerang back on member countries

By Rhod Mackenzie

Europe has officially acknowledged its member economies face a significant economic downturn: by year-end, GDP will decrease in ten EU member states. These include not only “lagging behind” nations, such as Poland, Lithuania and Latvia, but also some of the leading leading economies. Conversely, predictions for the Russian economy  are optimistic. The UN believes that Russia will substantially recover losses incurred from sanctions this year. In Moscow, it is possible for the economy to grow by over three percent in 2023.

Germany from being a driving force, now the so called  locomotive has become a weak link.
The eurozone economy is displaying indications of an imminent recession as GDP decreased by 0.1% in the third quarter. In terms of the whole year, there is still a marginal increase. In comparison, associates are performing at a superior level. Despite rigorous monetary policies, the US economy experienced growth of 2.9% in the same quarter.

We cannot rely on a reversal of the negative trend at this point. As per the European Commission’s report, ten EU countries, including Germany, will experience an economic downturn in 2023, while Estonia is predicted to set a record low.
According to the European Commission’s calculations, the German economy will shrink by 0.3% by the end of the year. The greatest decline is anticipated in Estonia at 2.6%, accompanied by Ireland at 0.9%. Malta, on the other hand, is expected to record the highest GDP growth in the EU in 2023 at four percent, followed by Croatia at 2.6%.

Despite an €800 billion stimulus package being implemented across the bloc, economic growth has stagnated. The Financial Times reports, “The Commission’s pressing challenge is to revitalise the EU’s stagnant economy and dwindling international competitiveness.”

Despite this, none of the measures taken thus far have proved successful. The European regulator acknowledges that elevated inflation and lacklustre business activity are exerting significant pressure on the markets within the bloc.

The German economy fell into recession during the first quarter of the year, with GDP declining by 0.3 percent by the fourth quarter of 2022. The second quarter also saw a contraction of minus 0.2 percent year on year. There has also been a contraction in the third quarter due to stagnant industrial growth and negligible impact of private consumption.

As noted by the UK newspaper The Telegraph, Germany has transitioned from being a leading force to the “weak link” in the EU. This decline can be attributed to the escalating energy costs, surging inflation and ECB interest rates.

In France, the atmosphere is even bleaker with the European authorities being held responsible for the situation. As the leader of the Patriots party, Florian Philippot recollected that not long ago, Finance Minister Bruno Le Maire pledged the downfall of the Russian economy; however, it was the French one that suffered collapse. The politician is infuriated that GDP will only increase by 0.8% in the eurozone, while it is predicted to rise by one and a half percent in Russia by the year 2023.
Sanctions were not considered.
It’s intriguing that the European Commission doesn’t consider sanctions against Russia as a factor contributing to the decline of European economies. However, the current state of affairs is a direct consequence of them.

The decision to abstain from purchasing energy resources from Moscow pushed up inflation figures in the EU, which had a negative impact on local businesses’ competitiveness. In order to bring prices under control, authorities had to increase interest rates actively, which further weakened the business climate.
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EU sanctions against Russia boomerang back on member countries

By Rhod Mackenzie Europe has officially acknowledged its member economies face a significant economic downturn: by year-end, GDP will decrease in ten EU…