Medvedev: Sanctions cost Russia $106 billion

It is the first official estimate of the damage done to Russia's economy.
By Ed Adamczyk  |  April 22, 2015 at 1:26 PM
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MOSCOW, April 22 (UPI) -- Russia has put a price, $106 billion, on the economic sanctions imposed on it in response to its involvement in Crimea and Ukraine.

Prime Minister Dmitry Medvedev quantified the damage caused by U.S. and European Union sanctions, as well as a downturn in the price of Russia's foremost export, oil, in a speech Tuesday to the lower house of parliament in Moscow. In his first official estimate of the cost of Russian territorial infringement, Medvedev said the sanctions cost Russia $26.7 billion in 2014, and will cost $80 billion more in 2015.

"There should be no illusions. Today we are faced not only with a short-term crisis," he said.

In January and February, Russian foreign trade fell by 30 percent, the value of energy exports fell 40 percent, food imports fell 40 percent, and inflation rose to 17 percent in March. Although statistics are still being compiled, Russia's gross domestic product is expected to contract by as much as 5 percent in 2014.

Medvedev referred to the past year as "the start of a new epoch," comparing Russia's 2014 annexation of Crimea with the 1989 fall of the Berlin Wall and the domino-like collapse of Communism.

"For the first time in the history of Russia after the collapse of the USSR, and in some ways in the entire history of Russia in the 20th century, during the Soviet and post-Soviet era, our country has turned out to be under the influence of two external shocks - a sharp drop in oil prices and unprecedentedly harsh sanctions pressure. We've never faced such an array of simultaneous challenges."

Medvedev struck a note of defiance in his speech, with no suggestion Russia would backtrack on its Crimea/Ukraine position. Speaking of the decision to annex Crimea, he added, "All of us, the country, the government and the parliament, supported it, being aware of probable consequences, and now we all have to do work to minimize economic problems, preserve stability and the social development of our state."

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