New Russia sanctions a further blow to efforts to end Syria conflict
The new U.S and EU sanctions against Russia that came into effect last month are part of the ongoing response to the Russian annexation of parts of Ukraine and its support of Ukrainian separatists. American sanctions—which target and additional 34 individuals close to Vladimir Putin—and the prolongation for another six months (until July 2016) of EU restrictive measures will have a negative effect on Russia’s economy. They will also complicate attempts at international cooperation with Russia to resolve the conflict in Syria.
On the first matter, the EU’s restrictive measures, which include, among other points, diplomatic measures, asset freezes, visa bans, and economic sanctions, aim to de-escalate the crisis in Ukraine. In terms of bilateral relations, the prolongation of economic sanctions will impact Russia’s ties with Germany and Italy the most.
In particular, energy ties and economic relations in other industries including oil, fashion, farming, and tourism will suffer a blow. So too, will Russia’s financial sector, which is specifically targeted by the EU sanctions. Furthermore, exports of dual-use equipment for military use in Russia are banned, as are future EU-Russia arms deals.
Russia has retaliated by banning the import of a long list of products from the EU, the U.S, Canada, Australia and Norway and has since extended to countries seen as backing the western sanctions, including Liechtenstein, Albania, Montenegro and Iceland. While Russia’s retaliatory measures only slightly hurt these economies, ironically, they may have the most negative effect on Russia’s economy.
With restrictive measures already in place against Ukrainian goods, once considered Russia’s breadbasket, and, more recently, Turkish goods and services in the wake of the downing on November 24th by Turkey of a Russian military jet, Russia’s list grows long. Sanctions will negatively impact Russian consumers, who face increasingly limited options for consumables as Russian sanctions are now in place against 38 countries.
Over the longer term, Russia’s counter-measures against the EU and the U.S are likely to lead to higher prices for imported goods and further inflation.
Playing the ‘Syria card’
Russia is betting its hand that its intervention in Syria is the winning card and its way out. Some EU leaders, including Italian Prime Minister Matteo Renzi, are playing that card, in turn, hoping that a more productive partnership could emerge with Russia to stop the Syrian civil war.
These leaders are more ready than others to end sanctions and to accept Russia’s annexation of Crimea. Yet in order to end the sanctions, the EU wants to see the implementation of a peace deal. Since that end goal remains out of sight, the sanctions are likely to drag on for now. In the meantime, it is clear that other players do not see Syria as Russia’s way out. The United States is highly skeptical of Russia’s intervention in Syria; President Obama has made it clear that for the United States, Ukraine and Syria are separate issues.
With Putin’s popularity rising despite the impact of sanctions and counter sanctions on Russian consumers over the holidays, it appears the game is not yet over.