Estonian Business Sector Unlikely to Be Shaken by New Wave of Sanctions Against Russia, Says Entrepreneur

British Foreign Secretary Philip Hammond, right, talks with Estonian Foreign Minister Urmas Paet during an EU foreign ministers council at the European Council building in Brussels today. EU foreign ministers are meeting to consider further sanctions against Russia. (Yves Logghe/Associated Press)
7/29/2014 10:42 AM
Category: Economy

A local entrepeneur said a new round of economic sanctions on Russia by the European Union and the United States should not affect Estonia dramatically, as many businesses have already cut their ties to the nation.

Businessman Jüri Mõis told Eesti Päevaleht that the sanctions on Russia do not affect Estonia's economy directly, because many companies that have been operating in the eastern market have left.

"All businesses that are awake have already left Russia," Mõis said. "The first ones that come to my mind are the top three rich people in Estonia - Hillar Teder, Oleg Ossinovski and Fjodor Bermann. Even Swedbank has closed their offices."

Statistics Estonia reported this month that Estonian exports to Russia were down 27 million euros - 20 percent - year-on-year in May. Russia now accounts for 11 percent of Estonian exports. Sweden and Finland are currently the two top destinations at 16 percent each.

The EU and the US agreed Monday to sharply expand economic sanctions amid concerns that Russia is stepping up its intervention in Ukraine in the wake of the shootdown of Malaysian airliner MH17, in which 298 were killed, and may be preparing for an outright invasion.

The sanctions include Russia's energy, military and financial sectors. The agreement was made in a teleconference involving the leaders of Germany, France, Britain, Italy, and the US. An EU meeting is being held today where the EU-specific sanctions are expected to be announced, with the US following afterwards.

Mõis said the state and the direction of the Russian economy indicate the Russian standard of living could drop by 20 percent over the next five years.

"There is no more money any more in Russia, that is the risk," Mõis said. "Therefore it is not wise to do business there."


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