The US Imposed Sanctions and Their Effects on Relations with the EU - Essay Example

US Imposed Sanctions and Their Effects on Relations with the EU There has been a contemporary constant pattern of sanctions, as well as counter sanctions that are geared towards the Russian economy. The Western nations including the US and the European Union have placed sanctions on the Russian state arguably from its involvement in the Ukraine crisis. Research reveals that more than 4,500 people have lost their lives as a result of this conflict (Taylor, 2010, p. 14). The economic impacts of these sanctions are widely felt in the country and the European Union countries; Germany being the major affected country. The Russian Federation has put necessary policies to retaliate some of the agreements that have a devastating effect on the economy. These sanctions have affected the European Union for the last ten years as they have achieved various political objectives through trade control. In the modern trend, the US has developed lots of agreements that affect various countries in the Middle East such as Afghanistan and Zimbabwe in Africa. Along these sanctions, they have devised various global trade restrictions in which they incorporate military submission in specified cases. This paper will analyze the effects of the Russian sanctions to the European Union countries and the possible effects of introducing different policies. The Russian economy is experiencing a recess in their economy that worsens each day. The Russian currency, ruble, has lost its value consistently due to the economic crisis and trade has become difficult and expensive to conduct. Various economists have analyzed the economy and suggested that the GDP of the country may deteriorate by 0.8% each fiscal year (Georgious and Mitchell, 2009, p.27). Some of these effects are short run whereas others are long run. Short run effects include the collapsing of the prices of oil. Low prices of oil are particularly detrimental to the economy as these prices destabilize Russia, as well as other economies that largely depend on Russian produce. The fall in oil prices also supplements the fall in the ruble currency in which the inflation level is affected. Due to the currency’s depreciation, the imports tend to become more expensive and the exports are relatively cheap. This worsening of the economy is, however, short run. Some of the large economies in Asia are taking advantage of this situation especially China (Belopolsky, 2009, p.35). China has made big steps in the last few years to ensure it becomes an energy market for Russia, and other countries. The Russian authorities argue that the imposed economic sanctions have a negative effect on the European economy. Some of the European countries heavily rely on the Russian economy through direct investment platforms and the technology therein. These sanctions, however, do not affect the US as it has very limited trade with the country. Europe has significant trading relationships, in terms of agriculture, energy, and consumer goods traded between the EU and Russia. The government officials have estimated that these sanctions account for about 30% of the economic predicaments that the country is currently facing in relation to trade with EU countries. These economic sanctions, however, do not affect the EU countries with the same magnitude. A country such as Germany is particularly worse off than other countries. The industrial revolution that occurred in Russia was supplemented by the German industry (Newnham, 2002, p.21). German mid-sized companies that rely heavily on the Russian economy may experience wind ups. For the last few years, Germany accounted for about 26% loss in its total exports to Russia. Sanctions definitely tend to affect both economies. However, the current economic vested interests in Russia by Germany do not suggest that they compromise the Ukraine invasion situation. Most of these authorizations are based on sectorial sanctions and the Russian counter-sanctions. The European Union has currently lost about 9% of its major exports to the Russian economy. These policies tend to incorporate a significant regulatory burden to the European countries. Even though the EU still support these sanctions, they do not enforce them strictly as their US counterparts. The US has imposed liabilities to the Russian economy in form of fines. These fines amount to billions of dollars (Kawecka-Wyrzykowska and Rosati, 2003). EU based companies in Russia that may breach these agreements may still face significant liabilities. Imposition of these fines to the EU companies due to breaches may be felt globally especially with companies that operate in a high competitive global market. Several elites such as Balcameda (2012, p.39) have argued that the Western nations are invading Russia’s sovereignty as they attempt to defang the state. Some describe sanctions as to having an antagonistic approach that the economies imposing sanctions use propaganda tools to validate. Russia even continues to face more sanctions due to its active role in indulging in Ukrainian state affairs. Due to the weakness in its political power, Russia’s financial infrastructure has deeply worsened. The country faces difficulty in obtaining foreign funding that it may use to develop the country when faced with low budgets. This financing may be particularly important due to the complex nature of the energy industry that requires heavy investments (Bredow, JäGer, and KüMmel, 1997). The sanctions, however, impose liability in the development and sophistication of energy resources both in the short term and long run. The ideology of sanctions by the Western nations to Russia may be argued from a realist point of view. Realism is a school of thought that involves the use of power from an international relations point of view. Through realism, the US and the European Union exercise their political power to control the activities and relations with Russia and how it affects other countries such as Ukraine (US 2015: 7). Powerful states such as the US generally prevail in imposing these sanctions to the Russian state. The US has relatively large military capabilities and strategic resources that it uses for this quest. However, most of these sanctions are directed towards the GDP of the country, as the economy is arguably the basic unit of a state. Other elements that the Western Nations use to impose authorizations include natural resources such as oil and gas, and the international relation affairs (Chaudet, Parmentier and Pélopidas, 2009). The Ukrainian crisis has sophisticated from being an internal conflict to an international conflict as a result of the interference by the Russian Federation. This conflict has demonstrated the incapacity of the two states to come up with possible solutions. The Western Countries, however, impose economic liabilities to oppose the annex policies brought forward by Russia. Therefore, from a realist perspective, the interests of Russia and Ukraine and their conflict are of significant importance to the Western nations in trying to establish the political positions. Russia’s national interest involves the hindrance of Ukraine to establish mutual relationships with the EU and the NATO as a way to ensure political dominance on the nation (Bojcun, 2011). US particularly impose heavy sanctions to allow Russia to convey their power against Ukraine and allow them to maintain their political integrity. Fritz (2007) argues that the sanctions have a detrimental effect to the Russian economy, but to a greater extent, they are ineffective in solving the political problems between Russia and Ukraine. European countries alone conduct much trade with Russia than any other continents. Studies indicate that these countries trade almost half a trillion dollars in each fiscal year. Smith (2012) suggests that these authorizations have also allowed authorities to come up with counter-sanctions that they use to retaliate some of these policies. These ‘economic punishments’ are not only felt by Russia alone but also the European states. A possible solution in terms of idealism, however, may involve the mutual understanding of the West and the Russian state involving Ukrainian affairs. A political package could be established in the form of mediated talks that must result to mutual understanding about the Russian and Ukrainian relationship. These talks should also establish the position of Russia with regards to national sovereignty. Ukraine as a sovereign state requires territorial integrity as well as neutrality in conducting its state affairs. This type of agreement may supplement the economic stabilization of both countries in conflict especially Russia. The economic sanctions will be uplifted and the economy will stabilize. With trade ten times more between the EU and Russia than the EU and America, long term effects of these sanctions may lead to great recessions of various state economies. In conclusion, European economies may try to devise possible solutions that will not affect largely their economies while they also impose sanctions on Russia. These policies, may however limit the conduct of free trade between the EU and Russian in a long term basis. The possible solution is to devise mediated talks that will incorporate the Western interests on Ukrainian-Russian relationship, instead of imposing sanctions. Imposing sanctions create liabilities, some of which are reflected in the Eurozone crisis. Bibliography Balmaceda, M. M. 2012. Living the high life in Minsk: Russian energy rents, domestic populism and Belarus impending crisis. Budapest, Central European University Press. Belopolsky, H. 2009. Russia and the challengers: Russian alignment with China, Iran, and Iraq in the unipolar era. Basingstoke [England], Palgrave Macmillan. Bredow, W. V., JäGer, T., and KüMmel, G. 1997. European security. New York, St. Martins Press. Bojcun, M. 2001. Russia, Ukraine and European integration. Florence, European University Institute, Dept. of History and Civilization. Chaudet, D., Parmentier, F., and Pélopidas, B. 2009. When empire meets nationalism power politics in the US and Russia. Farnham, England, Ashgate. Fritz, V. 2007. State-building a comparative study of Ukraine, Lithuania, Belarus, and Russia [Online]. Available at [Accessed 11 June, 2015]. Georgious, A., and Mitchell, J. 2009. 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