Bloomberg: The chances of lifting sanctions on Russia decreased significantly after recent events in Crimea

The growing tension in the region only prevents Russia from the establishment of favorable relations and the easing of sanctions and, therefore, from further economic growth, Bloomberg notes.

The agency interviewed 21 economists about the prospects of lifting the sanctions. About 52% of the respondents believe that the EU would agree to lift the sanctions in the coming year. Before the recent events in the Crimea, the proportion of respondents sharing this view was much higher — 69 %. Only 10% believe that the United States will begin to cancel the sanctions in the coming year, against 19% of the analysts prior to the events in the Crimea.

"The increase in tensions in the region undermines investor’s confidence. The U.S. and the EU maintain that sanctions will lead to a further outflow of capital from Russia. Moreover, Vladimir Putin does not intend to focus on economic issues and reforms. All this will lead to a further weakening of the ruble and more rigid work by the Bank of Russia," the agency reported, quoting the opinion of a senior analyst from Informa Global Markets, Christopher Shils.

According to the survey, 76% of the experts believe that the escalation of the conflict in the Crimea only weakens investor sentiment and 62% say that this will lead to an outflow of capital from Russia.

"In the context of the ‘hawkish’ statements of the Chancellor of Germany, Angela Merkel, the probability of lifting the sanctions during the year is unlikely. Moreover, a more flexible position by Moscow is necessary to start the process, which at the moment is to not agree to make concessions," an analyst of Raiffeisen Bank International AG, Andreas Schwab, notes.

On the 10th of August, the Federal Security Service of the Russian Federation (FSB) announced they had prevented terrorist attacks and sabotage by the Ukrainian military in the Crimea. During the raid members of the Defense Ministry and the FSB were killed. Ukraine rejects all charges of their involvement in the acts of sabotage. Vladimir Putin, commenting on the incident, accused Ukraine of provocations in order to divert attention from "the plunder of the people."

  Russia, Crimea, Sanctions