According to a study made by the European Commission, full sanctions against Russia would severely affect Estonia’s economy.
European Commission estimates that if EU would impose the toughest economic sanctions against Russia, it would reduce Estonia’s GDP by 5.6% which equals to about a billion euros, writes Eesti Päevaleht. Commenting the estimation, Estonian officials say that the European Commission’s approach is too simplistic and contains mistakes.
For instance, European Commission has estimated the potential loss to Estonia’s economy by deducting Russia’s role in Estonian trade as percentage of GDP although it is unlikely that EU and Russia would stop all trade even at the toughest sanctions.
Moreover, in terms of energy production, European Commission does not take into consideration that Estonia produces electricity from its own local oil shale and is not entirely dependent on imported electricity.
The classified study which looks at the impact of different sanctions on individual EU member states was delivered to representatives of every EU member last week. To avoid leaks, each member states received only the country-specific part of the analysis. The aim of the study was to estimate the impact of different level of sanctions that EU may impose against Russia for the latter’s annexation of the Crimea.
EU leaders warned in March that if Moscow starts to instigate riots elsewhere than in the Crimea, the EU is prepared to impose tougher sanctions. The study lists various levels of sanctions ranging from softer sanctions such as banning of exports of Russian luxury goods such as diamonds or caviar to banning of fertilizer imports and large-scale sanctions against Russia’s banking and financial system.