Sanctions against Russia are having an effect - Dombrovskis

RIGA - The European Union's (EU) sanctions against Russia and Belarus are having an effect, the European Commission's Executive Vice President Valdis Dombrovskis (New Unity) said in an interview with LETA. 

"Overall, the sanctions are working. For example, if we look at Russia's biggest source of budget revenue, oil and oil product exports, Russia's oil export revenues are down by about a third this year compared to last year. The EU oil embargo and the G7 oil price cap have a big impact," the EU commissioner said. 

Dombrovskis noted however that many countries, including such large countries as China and India, have not joined the sanctions, so Russia is actively looking for alternative sales markets. 

"Russia's financial situation is also rather difficult. The roble is declining in value, the Russian central bank is defending it and has been forced to raise interest rates to 15 percent. By comparison, the European Central Bank's key refinancing rate is currently 4.5 percent. This is also having a negative impact on the Russian economy and the purchasing power of the population. It is also affected by rather high inflation Russia is experiencing," the commissioner said. 

Dombrovskis added that Russia has switched to "a war economy of some kind", with a third of the Russian budget going to the military and military production being sharply increased. It is therefore also important for the EU and the West in general to focus on strengthening military capacity "because Russia will obviously be ready to continue this war and it cannot be excluded that it will also want to start new wars".

The politician noted that the latest packages of EU sanctions, in addition to new sanctions, place a strong emphasis on enhancing control measures to counter circumvention of the existing sanctions.

"Russia's main sources of revenue are already subject to sanctions. A fairly wide range of natural and legal persons associated with Russia's aggression against Ukraine are also under sanctions. So, in terms of sanctions, a lot has already been done, and the current focus is on fighting the circumvention of the sanctions, because Russia is actively looking for ways to do that. This is an ongoing work that needs constant attention to minimize sanctions circumvention," Dombrovskis said, adding that there have also been talks on other possible forms of sanctions, but there is still no consensus among EU member states on that matter.