And Russia strikes back



Following the first and second rounds of international sanctions against Putin’s Russia, Putin has ordered his government to prepare retaliatory measures against the U.S and the European Union states. Already, certain Agricultural produce such as Ukrainian dairy produce, Polish apples and Australian beef have been banned. Reports have it that American chickens would be next and foreign food firms like MacDonald’s are closely monitoring the situation.

But the biggest effect of the Russian push back would be the European Union states who are the biggest trade partners with Russia. There have been comments from certain quarters about a ban on all flights from Europe to Asia through the Siberian Federal District (which incidentally saves on average 4 hours and $30,000 per flight). British Airways, Air France and Lufthansa are the biggest EU airlines. Lufthansa said it could potentially lose more than €1 billion in three months if it does not use trans-Siberian routes. Incidentally this was one of the reasons why the EU were slow in announcing any sanctions aimed at Russia, because their businesses would bear the brunt of any lost dealings with the Russian economy.

Putin has already issued a directive to all ministries to come up with a list of imported goods that needs to be axed to aid local industries. In addition, some Russian legislators have proposed barring six consulting accounting firms from “aggressor countries” –Deloitte, Ernst & Young, KPMG, PricewatehouseCoopers, McKinsey and the Boston Consulting Group.  But what would be considered the sum of all fears would be if Russia decides to turn off its taps to Europe….

Such retaliatory moves improves his local support (considering the fact that it makes for great news headline in the local State controlled media) but whether this works for him in the long run, only time will tell.


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