The “pain” of the latest European Union sanctions package “will be felt in Europe—rather than in Russia—through price rises for companies and consumers, huge numbers of threatened jobs, and reduced competitiveness for EU manufacturers,” a recently released report argues.
The 16th sanctions package adopted in February expanded the ban on imports of processed aluminum goods from Russia to include a ban on primary aluminium as well.
According to the Stockholm-based Free Trade Europa think tank, a 20-30% price surge is likely, and a range of sectors, such as construction and the car industry, will bear the brunt of these increases, “potentially reducing industrial output and costing thousands of jobs.”
The report details how individual EU member states whose economies are dependent on Russian aluminium imports—including Germany, France, Italy, Austria, Hungary, Slovakia, and Sweden—will suffer from the punitive measures.
Germany’s automotive sector, for example, will take a major hit: up to 20,000 job losses are foreseen in manufacturing sectors, and the country’s export competitiveness will erode due to the sanctions.
In Sweden, an estimated 500 jobs will be directly, and 5,000 indirectly, impacted. Hungary’s car manufacturing sector is also “particularly vulnerable,” given the fact that it depends entirely on aluminium imports.
The report says that “Europe’s self-harm will play into the hands of its Chinese competitors,” and that the sanctions come at a time when the EU is engaged in a trade war with the United States:
The current mess is a result of layer upon layer of bad decisions and bad policy from Brussels. … The sanctions are a self-defeating mistake and amount to little more than virtue signalling at the expense of the broader strategic interests of the EU.
But the restriction of importing aluminium is not alone in harming Europe.
According to Hungarian weekly Mandiner, the decision to maximize Russian ownership of European logistics companies allowed to transport goods in the EU to less than 25% could lead to the disruption of value chains and further price increases. Likewise, the blocking of additional cargo traffic from Russia to the EU could cause a shortage of certain products.
The Hungarian conservative government has regularly lambasted the EU for adopting sanctions against Russia that have proven to be more damaging to Europe than to its intended target—Russia.
As Pieter Cleppe, editor-in-chief of BrusselsReport.eu, explained in his analysis for europeanconservative.com: “[T]he sanctions imposed have utterly failed to restrain Russia’s war machine.”
In addition to a handful of other EU member states that are reliant on Russian energy sources, Hungary has been exempted from sanctions that target the import of Russian crude oil. It recently dropped its veto on renewing sanctions by obtaining the guarantees it was seeking for its energy security.
