Russia calls EU sanctions on Moscow ‘peanuts’ compared to those of Cold War

World Today

Russian President Vladimir Putin and Russian Trade Minister Denis Manturov Russian President Vladimir Putin and Russia Trade Minister Denis Manturov . Russia Trade Minister. Manturov called recent EU sanctions ‘peanuts’ in comparison to those faced in the past (Photo: Wikimedia Commons)

After months of hesitation, the European Union is poised to impose tough sanctions on Moscow over the situation in Ukraine. The catalyst for this new resolve is the downing of Malaysia Airlines Flight 17 over territory held by pro-Russian separatists. CCTV-America’s Tom Barton reports.

Russia’s Trade Minister Denis Manturov says the sanctions are nothing compared to what the Soviet Union faced during the Cold War.

“What sanctions? A holy place is never empty: if one market closes, another opens,” Manturov said. “What’s happening today is peanuts compared to what was then.”

Russia calls EU sanctions on Moscow \'peanuts\' compared to those of Cold War

After months of hesitation, the European Union is poised to impose tough sanctions on Moscow over the situation in Ukraine. The catalyst for this new resolve is the downing of Malaysia Airlines Flight 17 over territory held by pro-Russian separatists. CCTV-America's Tom Barton reports.

Follow Tom Barton on Twitter @TomBartonJourno

Top Kremlin economic advisor Andrei Belousov says Russia’s economy will keep growing at a rate of around 1 percent.

President Vladimir Putin says sanctions will have a “boomerang effect.” Other Russian officials and analysts back that view.

“At the end of the day, introducing any sort of financial sanctions or tariffs ends up damaging both sides — the inflictors and the inflictees,” said economic analyst Andrei Necheukhin.

The Washington, D.C.-based International Monetary fund forecasts Russian growth at just 0.2 percent.

Former finance Minister Alexei Kudrin has publicly warned that the Russian government’s anti-Western rhetoric could weaken the economy further, predicting deterioration in GDP growth by a few points for a few years, a decline in real income and lower wages.

The Russian economy is in fact on the verge of recession, partly as a result of sanctions, with the ruble tumbling and a capital flight of over $75 billion so far this year.

“Of course the sanctions will have very serious repercussions for the Russian economy. They will have repercussions on trade,” said Kirill Entin, Research Fellow at the Center for Comprehensive European and International Studies of the Higher School of Economics. “They will worsen the investment climate. They reverse investment flows.”

The EU added 15 more people and 18 companies to its sanctions list, and may ban Russia from borrowing money from European lenders. The EU may also bar Europeans from buying bonds from Russia’s largest banks.

Despite this, the Russian government’s official message is, for the moment, one of scorn.