Following the military actions in Eastern Ukraine, the European Commission will decide on Thursday evening, February 24, the sanctions to be adopted against Russia.
According to European Commission President Ursula von der Leyen, the new sanctions proposed by the European Union against Russia will target vital sectors and prevent Russian banks from accessing European financial markets. “Russia will experience unprecedented isolation,” warns EU Foreign Minister Josep Borrell.
Through this (sanctions) package, we will target strategic sectors of the Russian economy by blocking access to key technologies and markets. We will weaken Russia’s economic base and its ability to modernize.Ursula von der Leyen, President of the European Commision
The new measures, which EU leaders will discuss at a summit scheduled for 19:00 GMT, will be “the toughest package of sanctions ever imposed,” EU Foreign Minister Josep Borrell said.
These are among the darkest hours for Europe since World War II. Russia’s leadership will face unprecedented isolation.Josep Borrell, EU Foreign Minister
How Romania will be affected by any economic sanctions against Russia
The measures the European Commission and the international community are about to take against Russia will certainly affect Romania as well. It’s a matter of economic trade with Russia and a matter of the investors’ trust in investing in the region.
The measures about to be taken today or in the following days will probably focus mainly on the banking sector, but also on other sectors, including, as rumor has it, the gas sector. This means that Europe could decide to give up on gas imports from Russia, but, as a consequence, hundreds of millions of Europeans could suffer. Apart from that, the gas and energy prices, already at the highest level, could grow even more.
According to recent statistics, Romania has a trade deficit of more than 1.6 billion EUR with Russia. Romanian imports from Russia grew by more than 33% last year, while the exports grew by only 2%. In other words, Romania imports more from Russia than it exports to Russia. This shows a specific economic dependency, but the products imported from Russia could be purchased from other countries or regions at negotiated costs.
Most of the goods imported are oil, gas, and related products, while Romania exports engine parts or industrial equipment.
At first sight, Romania isn’t one of the most affected countries in the European Union, even though it imports gas from the Russian Federation. The gas reserves that Romania has could compensate in the short term for any sanctions regarding gas imports, for example. But in the long run, Romania and other European countries would have to find another supplier if they are looking to get the economic dependency from this perspective.
Still, any military conflict near its borders will affect Romania and the intention of the investors to pour their money into this region. This came in a context when foreign investors had already avoided Romania. According to statistics published by EUROSTAT, personal remittances of Romanians working abroad exceeded the direct foreign investments in Romania. With the military conflict near its borders, Romania is close to the worst-case scenario, when investors would avoid the country even more. This is what could hit the country even more than any economic sanctions imposed by the European Commission or the international community.