E Russia Could Cause Another Financial Crisis In Response To Sanctions

One of the major international news stories over the past two years has been the unrest in the Ukraine that ultimately led to an overthrow of the previous government and a standoff between the nation of Russia and the Western powers. This resulted in the United States and many European nations imposing economic sanctions against Russia. What has not as well reported is that Russia responded by imposing sanctions of its own against these nations, which have had a noticeable effect on European farmers. Since that time, relations between the two sides have continued to sour. This can be seen quite clearly in recent events in Syria. These escalations in tensions have prompted some Russian lawmakers to propose ways for that nation to react and one of these proposals could prove devastating for the Western financial system.

The two conflicting sides of this geo-political situation first came into conflict in March 2014 when Russian soldiers annexed the Crimean Peninsula, which formerly belonged to the Ukraine, following a disputed referendum in which the citizens of the Crimea voted to become part of Russia. In response to this incursion, the United States ordered travel bans and asset freezes of those Russian individuals believed to be responsible for this military action. The European Union and other major Western powers followed by imposing similar sanctions of their own. Since that time, most of these nations have imposed stricter economic sanctions.

Three days after the United States imposed its first round of sanctions against Russia, the latter country imposed travel bans against ten American citizens and four days later against thirteen Canadian citizens. These counter-sanctions also escalated as their Western counterparts’ did, to the point where Russia banned nearly all imports of agricultural products from those countries that had imposed sanctions against Russia.  This has had a devastating effect on Western farmers, particularly European ones, as European food exports to Russia totaled €11.8 billion prior to the imposition of the sanctions. This has caused some European farmers to protest against the sanctions imposed on Russia.