Economy and sanctions against Russia

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The official decision to cancel the announced arrival of the Minister of Foreign Affairs of the Russian Federation, Sergey Lavrov, once again reminded us of the relentless reality of the sanctions imposed by the EU, which are also applied by our neighboring countries.

The cancellation of this controversial visit due to the impossibility of an official flight over the airspace of certain countries, will undoubtedly only accelerate the issues related to the introduction of sanctions against Russia on our part.

Any decision regarding the (non) adoption of some of the  sanctions against the Russian Federation is not just a question of a purely moral nature. The decision itself will have both political and economic costs. Therefore, it is not necessary to think about which decision of these two is better, than which is less bad.

The need for a rational assessment of benefits and costs 

Some of the proponents of imposing sanctions on Russia, both from the country and from abroad, justify their motives with some abstract “European values” that we will demonstrate, which only obscures the rational discussion.

On the other hand, opponents of the introduction of sanctions often use similar vague terms as the main arguments, such as cultural and fraternal ties or the fact that Serbia itself experienced sanctions in the 1990s, instead of some measurable indicators. Unfortunately, neither European values ​​nor traditional friendly ties are poured into the tank.

What we can be sure of is that the introduction of sanctions against Russia would bring with it Russian retaliatory measures against us, just as their non-introduction would probably cause some potential retaliatory measures by the EU. We see this from the statements of political officials from both Russia and the EU, but also from their mutual sharing. We do not know exactly what these measures are because they have not been announced publicly, but it mostly remains in the domain of speculation.

The rational cost-benefit analysis remains rather unclear, as we do not know the inputs for the calculation and will primarily be based on our subjective assessment: if you believe that in the event of sanctions, Russia will retaliate with very strong measures while the EU does not help us. the conclusion is that sanctions should not be adopted.

On the contrary, if you believe that Russia will not retaliate against us with some special measures, and that the EU will help us, then your conclusion is probably closer to the fact that sanctions should be introduced.

What do sanctions against Russia mean and what do they not? 

It should first be clear what EU sanctions against Russia are and what they are not, because a large number of people think that these sanctions are the same ones that the UN imposed on the FRY in the 1990s when any trade or business cooperation with companies from our country was banned. . The consequence was the destruction of the Serbian economy, the impoverishment of the broadest strata of the population, the lack of medicines and the sale of gasoline on bottles from smuggling.

In contrast, EU sanctions apply to individual firms and sectors, either state-owned or owned by tycoons close to the Putin regime. European companies, for example, are banned from exporting technology that can be used to produce weapons, but can still export most of their products to Russia. It is similar with the import – the import of coal is prohibited, just a few days ago the import of oil by tankers (the import of oil by pipelines was not placed under sanctions), but other things can still be imported. Economic cooperation between the EU and Russia has not been completely cut off, Talas reports.