The Economic Impact of Sanctions against Russia on EU Member States

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While attending a workshop on international sanctions a few weeks ago, I was fortunate to meet the author of the fascinating and very recent article “The Redistributive Impact of Restrictive Measures on EU Members: Winners and Losers from Imposing Sanctions on Russia“. Much has been written on EU-Russia relations following the crisis over Ukraine and important obstacles to a rapprochement remain; however, there have been few other detailed assessments of the economic impact of the sanctions, countersanctions and geo-political uncertainty on EU member states. Because the magnitude of the overall economic effects was a surprise to me – trade contracted by over a third for almost all EU member states and by much more for some members since 2013 – I couldn’t resist to take a brief look at the changes in the EU-Russia trade relationship myself: my analysis below complements the cited work but is based on more fine-grained data, which offers a potentially more nuanced assessment of some aspects of the development in EU-Russia trade relations.

“The concerns expressed by several EU leaders regarding the cost of the restrictive measures imposed on Russia were justified.” (p. 15)

In response to the annexation of Crimea by the Russian Federation in March 2014 and Russia’s support of armed separatist forces in eastern Ukraine, a group of states, led by the European Union and the United States, has imposed separate but overlapping sanctions on Russian individuals and businesses. EU sanctions have repeatedly been broadened in scope and today include restrictions against proponents and beneficiaries of Russian actions in Ukraine, economic sanctions against state-owned banks, energy and defence companies, as well as limitations on economic exchanges with Crimea. On 13 March 2017, the European Council prolonged the restrictive measures for a further six months, until 15 September 2017.

Sanctions are an important part of the policy response to what the EU and the US consider illegal actions by the Russian government. Germany has particularly emphasised the importance of a political solution and has strenuously worked towards a negotiated settlement: in March 2015, EU leaders decided to align the existing economic sanctions to the complete implementation of the Minsk II agreement, a package of measures to de-escalate the military confrontation in the Donbas that Germany and France facilitated between Moscow and Kiev. The provision of economic aid and military capabilities to Ukraine has been another pillar of the Western response; Germany has mostly focused on financial contributions.

This brief assessment aims at quantifying the changes in the EU-Russia trade relationship – which reflect economic sanctions and countersanctions as well as other factors, such as investor uncertainty and considerable changes in the exchange rate. The article also provides evidence on which member states have been affected the most in their trade relations with Russia and whether there are countries or sectors with excessive export losses or gains. This becomes especially relevant with regard to present discussions over burden-sharing and demands for a compensatory mechanism on the European level, as well as the Russian countersanctions on agricultural products, which may place disproportionately higher costs on the Southern and Eastern European countries.

In Sections 1 and 2, the text provides some background on the rationale behind the introduction of economic sanctions against Russia. This will then be complemented in Section 3 by a quantitative analysis of EU-Russia trade flows since 2013.

Continue reading “The Economic Impact of Sanctions against Russia on EU Member States”

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The Economic Impact of Sanctions against Russia on EU Member States

Award for my Master’s thesis on export controls

AscendentesAquila-logo

 

I recently received an ‘Aquila ascendens’ award for young academics working on security policy for my Master’s thesis on export controls for cyber-surveillance technologies. This prize is awarded on an annual basis by the DialogForum Sicherheitspolitik and the Working Group on Security Policy of the Bundeswehr University Munich. 

My thesis at the Hertie School of Governance evaluated existing export controls for surveillance technologies at the German, European and multilateral level and assessed the potential to introduce additional control measures and other mitigation strategies to protect human rights and promote international security. Professor Dr. Wolfgang Ischinger, Chairman of the Munich Security Conference and Professor at the Hertie School of Governance, acted as my thesis supervisor.

A research article on recent developments in the discussion on exports controls on cyber-surveillance technologies, which is partly based on my Master’s thesis, will appear soon in the next issue of the peer-reviewed Strategic Trade Review journal. 

Here is the abstract to the upcoming article: 

The global trade in cyber-surveillance technologies has largely evaded public scrutiny and remains poorly understood and regulated. European companies play a central role in the proliferation of a broad spectrum of advanced surveillance systems that have legitimate uses, but have also been repurposed for nefarious ends. Export controls have developed into an important instrument to restrict sales of cyber-surveillance equipment and software to repressive regimes; however, these technologies pose significant challenges to traditional frameworks for the control of dual-use exports. This article provides an overview of current developments on the European level and within the multilateral Wassenaar Arrangement and presents the current state of export controls on cyber-surveillance technology. Most importantly, it discusses the outcome of the EU export control policy review, focusing on the regulation proposed by the European Commission in September 2016, and provides an initial assessment of the key innovations and limitations of the draft text. In addition, the article presents an analysis of the current debate regarding the problematic definition of ‘intrusion software’ in the Wassenaar Arrangement and offers insights into some alternative proposals.

Award for my Master’s thesis on export controls

External Intervention to Strengthen Democracy in Africa

Although more competitive forms of authoritarianism and electoral democracy are today prevalent in most African countries, democratisation has slowed and in some places reversed. This coincides with an ever-growing rift between African citizens who are demanding further democratic rights and rulers who want to preserve their prerogatives. Western actors need to support those who hold the greatest democratic aspirations more fervently: African citizens themselves.

Read more in our most recent GIGA Focus Africa in English and German. This is an outcome of a joint project with Dr. Christian von Soest at the German Institute of Global and Area Studies (GIGA).

  • Western support has contributed to democratic development in Africa via two channels. First, political conditionality and “democratic sanctions” have increased the costs for leaders who severely infringe human and democratic rights. Second, Western intervention has helped to increase citizens’ awareness and their opposition to their regimes. Yet, the effect of external intervention has clear limits: no African country that has been subject to Western democratic sanctions since 1990 has become fully democratic.
  • Despite the discussions about a specific African variant of democracy – for instance, one which places greater emphasis on traditional authorities – the majority of African citizens support the procedural tenets of liberal democracy and universal human rights. This sentiment largely holds across countries with different levels of democracy and with varying exposure to external intervention.
  • The majority of Africans consider local elites to be primarily responsible for democratic progress; Africans value national sovereignty more highly than regional responsibility. In particular, the absence of one specific African democratic model and African citizens’ high regard for national sovereignty renders context-sensitive external support all the more important.

Policy Implications

Seen against the rise of China and other authoritarian powers, Western influence is declining in relative terms. However, Western countries still have an important role to play in supporting democracy in Africa. Western assistance should be citizen-centred and involve consistent support for civic education and common training programmes for young leaders across the political divide.

This is what Christian von Soest and I find in our most recent GIGA Focus Africa available in English and German

External Intervention to Strengthen Democracy in Africa