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Boomerang Effect
Boomerang Effect
Background on Crimea
Crimean population: 2.3 million
Russians = 1,450,000 (58.5%)
Ukrainians = 577,000 (24%)
Energy
Several natural gas fields
Crimean Crisis
Russian and Ukrainian conflict over control of the
Crimean Peninsula
Crimean government did not recognize new Ukraine
President- Viktor Yanukovych
March 16: Crimean referendum to join Russia (result:
96.77% affirmative vote)
March 18: Russia and Crimea signed a treaty of
annexation
EU, USA and Ukraine do not recognize the annexation
as legal
2. Commercial:
3. Financial:
Russian Retaliation
August 6, 2014:
Further Effects:
Uncertainty
Cut on gas supply
Agricultural Exports
Banned
Country
Lithuania
927
Poland
841
Germany
595
Netherlands
528
Denmark
377
Spain
338
Finland
283
Belgium
281
France
244
Italy
163
EU28
5252
Decreased Confidence
For Firms
Compliance with new regulations of the sanctions
Wide scope of activities affected (trade,
investment and insurance operations )
Avoiding legal consequences, though some
sanctions may lower a companys profits
For Investors
Concerns about the returns on investments (ROI)
Fear of government locking in the funds
Foreseeable Future
Europe may enter in another economic recession
Flow on international investment into Russia has
stalled
Ban on EU exports of equipment used for oil to
Russia
References
http://www.bbc.com/news/world-europe-28834170
http://www.bbc.com/news/world-europe-30003449
http://www.spiegel.de/international/business/germaneconomy-hit-by-us-eu-sanctions-on-russia-a-982075.html
http://www.newyorker.com/business/currency/hurt-putinhurt
http://www.washingtontimes.com/news/2014/sep/15/russiasanctions-risk-return-to-recession-for-euro/?page=all
http://nationalinterest.org/feature/the-west-vs-russia-theunintended-consequences-targeted-11427
http://www.euractiv.com/sections/agriculture-food/russiassanctions-threaten-both-eu-farmers-and-policymakers307827
http://europa.eu/newsroom/highlights/specialcoverage/eu_sanctions/index_en.htm