In recent weeks, the discussion about the effectiveness of Western sanctions against Russia has increased. Strategists at Commerzbank come to four main conclusions.

Success or failure?

“The Russian sanctions imposed by the EU and other Western countries do not lead to a collapse of the Russian economy. But they can be expected to significantly harm it in the longer-run. Indicators such as the RUB strength do not prove otherwise.”

“The EU's first four sanctions packages followed the economic logic of maximizing economic damage to the targeted country with minimal damage to the sanctioning countries. The fact that the EU nevertheless experienced deteriorating terms of trade, while the effect on Russia's terms of trade is ambiguous, is not due to the sanctions but to increased supply insecurity.”

“With the sixth sanctions package, the EU departed from its previous path. The purpose of the package was to reduce the effectiveness of Russian counter-sanctions as political leverage. This purpose cannot be fully achieved, because a balance must be struck between this goal and the economic damage within the EU.”

“The sanctions may not stop the invasion of Ukraine. But even then, they create significant signaling effects.”