Stabilized E Ukraine May Lead to US Lifting Russia Sanctions - Official

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Former US Deputy Assistant Secretary for International Trade and Investment Policy at the US Treasury Gary Hufbauer claims that the continuing stabilization of the situation in eastern Ukraine may lead to the lifting of sanctions the United States has imposed on Russia.

NEW YORK (Sputnik) — The continuing stabilization of the situation in eastern Ukraine may lead to the lifting of sanctions the United States has imposed on Russia, former US Deputy Assistant Secretary for International Trade and Investment Policy at the US Treasury Gary Hufbauer told Sputnik.

"My guess is that once lines of control in eastern Ukraine have stabilized, and there appears to be no danger of a further enlargement of the separatist enclave, then the US government will begin to lift sanctions," Hufbauer said on Friday.

The volume of investments in Russia has fallen by 10 percent in 2015, but Hufbauer argued that much of the decline can be linked to apprehension of additional sanctions.

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"This has happened not mainly because Western banks and MNCs [multinational corporations] are forbidden to extend credit or invest, [but rather] they fear that ‘another show will drop’ in the sanctions process," Hufbauer, who is currently a senior fellow at the Peterson Institute for International Economics, explained.

Once Western governments modestly relax the direct sanctions, Hufbauer noted, "Western banks and MNCs will feel more confident that normal relations are on the horizon, and resume financial flows in Russia."

Russia’s economic performance has experienced a slowdown since mid-2014, which has largely been attributed to global oil prices that have more than halved due to market oversupply. Another factor affecting Russia's economy is the depreciation of the national currency.

Russia’s Economic Development Minister Alexey Ulyukayev stated on October 12 that the projected drop in volume of investment in Russia is projected to be 1.5 percent in 2016, or 8.5 percent lesser decline than the previous year. He referred to the projection as potential investment recovery.

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