Sunday, September 14, 2014

The real costs of economic sanctions (revisited)

Easily the most amazing thing about the sanctions fight over the Ukraine is how pathetically easy it is to get governments to inflict damage on their own citizens over fights that barely affect them.  I mean how exactly do Italian farmers figure into the fight over whether the government in Ukraine is sufficiently neoliberal?  What have they done to suffer the destruction of a year's worth of hard work?

Perhaps that is the ultimate measure of Leisure Class effectiveness—how much suffering can they inflict on innocent bystanders for their own amusement.  These are truly sick people—they cannot create anything so they destroy the creativity of others.  They even enjoy destroying the creation we call nature.

The question becomes, what exactly do the rest of us do about their waste and destructiveness?  Like most of you, I have feelings of wanting to swing those pigs from the lamp posts.  But there are two problems with that—the Leisure Classes maintain their position in the social order by being very good at lying, cheating, and killing people, and even if you could organize a revolution to displace them, how exactly would your new regime differ the one you removed?

In my mind, the only solution is to culturally shun the Leisure Classes.  Since they are at their best when organizing displays that attract attention to themselves, actually ignoring these loudmouths is really difficult.  But ask yourselves, is shunning destructive barbarians really harder than winning a revolution?

Italian Minister: Russian countersanctions inflict 100 million euro loss on economy

Russia’s embargo inflicted most losses on small and midsized farms supplying fruits, cheese and meat products

ROME, September 11. /ITAR-TASS/. European sanctions imposed on Russia and Moscow’s countersanctions have inflicted a loss of up to 100 million euros on Italy’s economy, Italian Economic Development Minister Federica Guidi said Wednesday.

“Losses from export shrinkage as a result of European sanctions and countersanctions on the part of Russia due to the Ukrainian crisis total not more than 100 million euros,” Guidi said.

According to representatives of the Northern League opposition party who accuse the government supporting the European Union’s anti-Russian sanctions of violating the country’s national interests, Italy is sustaining losses of some 15 billion euros.

Russian officials and companies came under the first batch of Western sanctions, including visa bans and asset freezes, after Russia incorporated Crimea in mid-March. The West and Kiev refused to recognize the legality of Crimea’s reunification with Russia despite Moscow’s explanations that it was legal.

The West announced new sectoral sanctions against Russia in late July over Moscow’s position on Ukrainian events, in particular, what the West claimed was Moscow’s alleged involvement in mass protests in Ukraine’s war-torn southeast.

In response, Russia imposed on August 6 a one-year ban on imports of beef, pork, poultry, fish, cheeses, fruit, vegetables and dairy products from Australia, Canada, the EU, the United States and Norway.

Russia’s embargo inflicted most losses on small and midsized farms supplying fruits, cheese and meat products. Italy’s Ministry of Agricultural, Food and Forestry Policies announced that it opened access to EU-allocated funds for support of affected agricultural producers.

Last year, the volume of Italian food exports to Russia, including wine unaffected by restrictions totaled 706 million euros.

The list of products whose imports Russia banned as part of its response sanctions to Western nations includes cattle meat (fresh, chilled and refrigerated), pork (fresh, chilled and refrigerated), poultry meat and all poultry edible by-products, salted meat, pickled meat, dried meat, smoked meat, fish, clams and other water invertebrates, milk and dairy products, vegetables, edible roots and tuber crops.

The list also contains fruit and nuts, sausage and analogous meat products, meat by-products or blood, as well as products made of them, ready-to-eat products including cheeses and cottage-cheese based on vegetable fats.

Russia has repeatedly dismissed Western allegations that it could in any way be involved in protests in the southeast of Ukraine, which started after Crimea refused to recognize the authorities propelled to power during a coup in Ukraine in February and reunified with Russia in mid-March after some 60 years as part of Ukraine.

Fierce clashes between troops loyal to Kiev and local militias in the southeastern Ukrainian Donetsk and Lugansk regions during Kiev’s military operation to regain control over the breakaway territories, which call themselves the Donetsk and Lugansk People’s republics (DPR and LPR), have killed hundreds of civilians, brought massive destruction and forced hundreds of thousands to flee Ukraine’s southeast.

The Ukrainian warring sides agreed on cessation of fire during talks mediated by the Organization for Security and Cooperation in Europe (OSCE) in Belarusian capital Minsk on September 5. The long hoped-for ceasefire took effect the same day. more

German companies report 3 billion euro losses in Russia — newspaper

About 300,000 jobs in Germany depend on economic relations with Russia
BERLIN, September 12. /ITAR-TASS/. German enterprises are sustaining serious losses due to the sanctions war between the West and Russia, and also against the background of the general situation caused by the Ukrainian crisis, Germany’s Handlesblatt newspaper reported on Friday.

According to the publication, German companies have seen a 3-billion euro reduction in their profits in Russia over the first six months of the year.

The newspaper cites as an example the Stada pharmaceutical group situation that gained 113 million euro before tax in Russia last year, which accounted for 45% of its total profit. However, in the present conditions the enterprise has had to downgrade its annual forecasts, which caused the shareholders’ uncertainty. As a result, Stada has lost 500 million euro or 25% of its exchange value, the newspaper says.

In addition, Russia is an important market for Metro, which manages Metro Cash & Carry networks in Russia, as well as the Media Markt appliance shop. Its turnover in Russia is about 4.3 billion euro and the staff size - 20,000 people.

According to Handelsblatt, this year is likely to be uneasy also for the Bionorica pharmaceutical company that got a 78-million euro profit in Russia last year - 33.5% of its total turnover. “Russia remains one of the most important trade partners for us. We would prefer no additional obstacles to our business,” Bionorica head Michael A. Popp said.

The machine building company Claas KGaA MbH, manufacturing tractors and combine harvesters in Krasnodarsky Region, Deutsche Bahn railway group, Henkel AG & Co. chemical giant, Adidas AG sportswear manufacturer and MAN SE machine building company, making trucks, buses and engines, have found themselves in a similar situation, the newspaper writes.

In addition, one of the German automobile giants - Volkswagen, has made a decision to suspend car assembly at its plant in Kaluga for 10 days, starting from September 8. This has been done despite the fact that the company head Martin Winterkorn has previously called Russia “Europe’s number one growing market.”

Last year’s trade turnover between Germany and Russia accounted for 76 billion euro. About 6,000 German companies operate in Russia with the total investment volume reaching 20 billion euro. About 300,000 jobs in Germany depend on economic relations with Russia. more

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