A slew of measures have been announced by the US and UK against Russian banks and companies, limiting their access to financial markets. The EU is still debating what measures it will impose, but political statements thus far suggest these will stop short of cutting its dependency on Russia’s cash generating energy sector.
The Russian economy will still face a significant long term hit from financial measures, but it will not necessarily be enough to trigger a recession or slash at the country’s asset prices in the near future, economists told The Independent.
Russia’s role as a commodities powerhouse amid high demand for natural gas and oil means that the pain of financial sanctions is partly offset by strong energy prices.
“Greta Thunberg might be more effective than any Western sanctions,” said Charlie Robertson, chief economist at Renaissance Capital. European governments have made little progress in weaning themselves off Russian energy imports in recent years, he said.
Russia still accounts for about a third of Europe’s natural gas imports. This is despite warnings from a range of economists about the political risks associated with this energy need in the wake of the annexation of Crimea, part of Ukrainian territory, in 2014. Environmental campaigners such as Ms Thunberg have done more to push politicians away from fossil fuels…