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    The latest package of sanctions imposed by the United States and the EU against Russia will mostly hurt the West, thus solidifying Russian President Vladimir Putin’s positions, the BBC reported.

    MOSCOW, July 31 (RIA Novosti) - The latest package of sanctions imposed by the United States and the EU against Russia will mostly hurt the West, thus solidifying Russian President Vladimir Putin’s positions, the BBC reported.

    "This [new package of sanctions] will ultimately hurt the City [of London], as well as New York, because for the first time, the Russians are going to realize that they in fact can live without the global financial services industry,” the BBC quoted banking expert Ralph Silva as saying.

    According to Silva, as a result of sanctions, Putin’s positions will only strengthen.

    "Putin has been strengthened as a result of the sanctions. The Russian public is seeing him as the protector and if he gets the country through these sanctions, he will solidify his hold on power," Silva added.

    According to the BBC’s article, the European Union takes more than 45 percent of Russia's exports. Less than 3 percent of the EU's exports go to Russia.

    BANKING SECTOR

    London-based financial analyst Chris Skinner, in an interview to the BBC, said that sanctions on banks might force Russia to find alternatives to London.

    He said the restrictions "could kill the Russian flow of capital through our markets if there is an alternative. For example, would they switch to Hong Kong or Shanghai?"

    Earlier, Russia's Bank of Moscow said that business was not suffering from sanctions and that it was not planning to borrow on foreign markets.

    Russia’s state-owned VTB Bank’s representatives said the sanctions are likely to cause economic harm to all parties.

    DEFENSE INDUSTRY

    As well as financial restrictions, the European Union now has a list of arms that are prohibited for sale to Russia. There are also restrictions on Russian arms exports.

    “Considering relatively low volumes of arms trade between the EU and Russia, the sanctions are more symbolic, especially seeing that France is holding on to the two Mistral-class helicopter carriers deal with Russia,” the BBC quoted Lilit Gevorgyan, an analyst at IHS Global Insight, as saying.

    "While Russia is the second-largest arms exporter in the world, its military imports from the EU are limited in volume," Gevorgyan added.

    According to the BBC, Russian defense corporations have repeatedly stressed that the US customers would be missing out as a result of the embargo.

    ENERGY SECTOR

    The European Union did not go as far as limiting oil and gas imports from Russia, as it would seriously hurt European economy.

    The EU banned exports of technology systems for use in energy exploration instead.

    In response to the sanctions, Russian gas giant Gazprom announced that it would now source its gas turbine spare parts locally instead of relying on imports, the BBC reported.

    The European Commission published Wednesday the names of eight individuals and three additional Russian entities targeted by sanctions over their alleged roles in the escalation of the Ukrainian crisis.

    The first round of sanctions against Russia was implemented by the United States and the European Union back in March as a response to Crimea’s reunification with Russia following a referendum.

    The new addition brings the number of persons and entities under EU restrictions to 95 persons and 23 entities.

    The Russian Foreign Ministry warned that a new wave of western economic sanctions against Russia’s energy sector will drive up European energy prices and hurt the 28 member states as much as Russia.

    Moscow has repeatedly said that these measures are counterproductive and called the sanctions “a road to nowhere.”

    Tags:
    finances, economy, sanctions, European Union, New York, London, Vladimir Putin
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