Estonian Officials Reportedly Skeptical Over Estimated Hit From Full Sanctions Against Russia

Economic sanctions against Russia could hit a variety of sectors, a study by the European Commission reports. (Toomas Huik/Postimees)
4/22/2014 2:00 PM
Category: Economy

Full economic sanctions placed on Russia would reduce Estonia's GDP by 5.6 percent, according to a study by the European Commission. Estonian officials are skeptical, calling some of the presumptions unfounded; member states have been asked for a response by today.   

The report was released only in paper form to member states to avoid leaks, and the document addressed only the impact of the individual country, Eesti Päevaleht reported Monday.

The economic hit would be equivalent to roughly a billion euros, according to the report.

"They are even described as a bit amateurish," said the Delfi news site based on its off-the-record conversations with officials. "The Comission's billion euro estimate is like a mechanical calculation based on transposing Russia's share of Estonian trade and lopping it off the GDP."

"In some places, it's almost comical. It seems Brussels seems to have priced in the scenario that Estonia is extremely dependent on imported power and energy production fuels," it added, noting that Estonia still relies on oil shale. 

EU leaders, including President Toomas Hendrik Ilves, have publicly discussed deep sanctions against Russia as a next step against the country because of the annexation of Crimea and its role in the developing disorder in the eastern region of Ukraine.

The study lists various categories of sanctions, from low-level sanctions such as the banning of luxury goods, to a full isolation for Russia's financial and banking system. The European Commission gave each member state a breakdown of the impact of sanctions on a particular country on paper, instead of its usual electronic method. The study has been in the works since the beginning of March.

Russia, the European Union, Ukraine and the United States signed an agreement in Geneva on Thursday designed to lower tension between the West and Russia. The agreement calls for pro-Kremlin rebels to end their occupation of government buildings in cities in eastern Ukraine. The rebels have disavowed the agreement, and Russia and Ukraine have both accused the other of breaking its terms.

 


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