EU is unlikely to change course on Russia sanctions

Significance

The sanctions, reviewed on a semi-annual basis, have now been extended until January 2018, despite speculation about divisions within the EU. This comes after the US Treasury imposed new sanctions on 38 individuals, companies and organisations on June 20.

Impacts

• Russia is likely to continue efforts to sow divisions within the EU and between the EU and the United States.
• Future oil prices will shape Russia’s ability to weather sanctions.
• Russia may raise capital through bond sales and by turning to Asian investors, although this may not fully offset the effects of sanctions.
• Russia’s counter-sanctions -- a ban on food imports from the EU -- have led to some successful agricultural import substitution.