On March 21st, theEconomic Studies Office of the SACE Group has published an interesting Focus entitled “Sanctions against Russia: what prospects?”. The report - which is attached - addresses the latest developments pertaining to the positions taken by the Russiaand Crimea and of their relations not only with theUkraine but especially with the United States e the European Union.
The SACE Focus, edited by Dr. Valentina Cariani (analyst in charge of the Eastern Europe and CIS Desk), begins by summarizing the latest sanctions implemented by the US and the EU against Ukraine and Russia against the referendum of 15 March last and of the declaration of annexation of Crimea by the Moscow government. It is essentially about sanctions ad personam which, therefore, they do not affect the Ukrainian or Russian populations but, on the contrary, they are addressed to precise political figures of the two countries. The European Union, for its part, already before the lamented referendum of March 15, had established some sanctions against 17 Ukrainian civil servants and former president Yanucovich regarding the freezing of assets held by them in Europe. Still with regard to fines for natural persons, the United States they had: 1) blocked the entrance of those political subjects who had been involved in the unrest in Ukraine of the past weeks, 2) compiled a list of Ukrainian political and economic entities with which US operators cannot have economic relations (cd “Specially Designed Nationals"). Following the decision of the people of Crimea to join Russia and the acceptance of the latter with respect to the annexation of the Ukrainian region, both the EU and the US have hardened their positions. The first, on March 17, as well as confirming previous fines ha extended previous sanctions to 21 other figures of Russia, the Crime and Ukraine. The latter blocked the entry into American soil of those figures included in the SDN list. As the days go by, and above all in the face of President Putin's position to continue the process of annexing Crimea, the most significant measure was Russia's ouster from the G8 (as well as the blocking of military cooperation).
What drives Putin to carry forward the inclusion of Crimea within his borders is easy to say. We are facing a strong demonstration of power by those who have been publicly challenged and opposed in recent weeks, not only by the Protestants of Maidan Square, but - above all - by that part of the international community which looked favorably on Ukraine's detachment from the Russian federation. If then this demonstration of strength by the Moscow government is also supported by the inhabitants of the Crimea region themselves, Putin's sense of legitimacy, useful for carrying forward the incorporation of the peninsula, is almost unshakeable. Certain, Crimea as such is not exactly indifferent to Russia's economic strategy: as reported by Cariani in the Focus, in Crimea "1,5 billion cubic meters of gas are extracted and a series of exploration projects on offshore fields are planned in the region". However, there are disadvantages of annexation and can be identified: 1) in theenlargement to the Crimea of welfare russo which should cost about $3-4 billion a year, 2) in the need for new infrastructure investments short term given that the peninsula is underdeveloped, 3) in the failure of the agreements for the inclusion of Ukraine in the Eurasian Customs Union and therefore in the loss of a market made up of 40 million consumers.
The inclusion of Crimea has not, however, had a heavy impact on the international markets, rather, their reaction was even positive, With the recovery of the exchange rate ruble-dollar traded at RUR 36,2 rather than RUR 36,65 per dollar compared to previous weeks.
The repercussions of this escalation in the relationship between the two blocks has not yet damaged the position of our country (Russia's second trading partner after Germany). However,, in the light of the fact that Italian exports to Russia exceed 10 billion euros, that our country is dependent on Russian energy supplies (compared to gas, we import about 30% of our total needs from Russia) and that it is not the only one in Europe to have close ties with the federation it is likely to foresee, for the next few weeks, a negotiation phase hardly characterized by more severe sanctions against Moscow.
Attachments: FocusOn_Russia0314.pdf
