This international comment by Uncle Mu is to analyze the EU's sanctions on Russia. The Russian-Ukraine War at the end of February has been 10 months, and the EU has also imposed eight sanctions on Russia. The effect naturally became a topic of concern to all walks of life.

MuMu's international comment is to analyze EU 's sanctions on Russia.

htmlThe Russian-Ukraine War at the end of February has been 10 months, and the EU has also imposed 8 sanctions on Russia. The effect naturally became a topic of concern to all walks of life.

On December 12, the media quoted an assessment of sanctions against Russia prepared by the EU implementing agency, saying that the impact of sanctions on Russia on the EU economy is limited, mainly limited to several specific sectors.

Uncle Mu agrees with this judgment, otherwise the EU will not continue to provide more economic and even weapons assistance to Ukraine in the past 10 months. This shows that the EU's economy still has a lot of room for resilience and flexibility.

This is one of the reasons why the EU is currently launching the ninth sanctions against Russia.

There have been many reports on the impact of sanctions on Russia, so Uncle Mu will analyze some of the impact of sanctions on the EU!

first affects the EU's economic development expectations.

Before Russia's blitzkrieg against Ukraine, the EU economy is expected to expand significantly and can return to pre-epidemic production levels by 2022. However, after the sudden outbreak of the war, it led to price increases and supply chain failures, and put a burden on public finances as EU governments tried to mitigate the consequences of sharp rise in energy prices.

Second, sanctions on Russia affect energy prices and the competitiveness of upstream and downstream industries.

Although EU GDP increased in the first half of this year, the annual inflation rate reached 11.5% in October. Energy prices are rising even more.

In particular, energy prices surges in the EU are particularly strong compared to the United States and Japan, causing problems in competitiveness and causing production to drop at several factories.

It is estimated that measures implemented by EU member states to limit the impact of high energy prices on households and companies are equivalent to net budget expenditures generating 0.9% of EU GDP in 2022.

Third, supply chain alternatives emerge.

In addition, the EU has enacted export restrictions to minimize the impact on the supply chain. Imports from Russia dropped from 40%-45% before the war to about 9%, and the import of some key raw materials was replaced by goods imported by Turkey , Brazil, South Korea and India.

However, the EU's ban on Russian wood has led to rising prices of wood-related products, such as plywood and oak supply still has some problems.

Fourth, important metal raw materials are at risk.

In addition, Russia has also carried out some countermeasures against the EU, such as rare gases such as neon and xenon that are necessary for chip production. In the past, the EU relied on Russia and imported some time after the Russian-Ukrainian war.

But so far, the blow to key raw materials that are not subject to sanctions has been largely avoidable. Therefore, the EU can also import raw materials such as aluminum, nickel and titanium from Russia, which have even increased, while imports of palladium and copper have slightly decreased.

is fifth, affecting cooperation with third countries such as China.

sanctions also have an impact on the EU's " spillover effect ", that is, trade with third countries has suffered a certain impact.

For example, the EU used to rely on Russia's Siberian Railway to carry out freight business of China-Europe freight trains with China, which is even regarded as an important part of the Belt and Road Initiative.

However, the outbreak of the Russian-Ukrainian war has led to very tense relations between Russia and the EU, especially with Eastern Europe, which has affected the freight business of the EU and China through Russia.

Although China and Europe can choose to bypass Russia's Siberian railway, such as air and sea freight, this problem will definitely affect transportation costs.

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