EU‑Russia trade hits lowest level since 1999 amid economic woes

According to the Russian newspaper Kommersant, trade turnover between Russia and the European Union amounted to $5.2 billion in June, representing a 10% monthly decline. This is the lowest figure since September 1999, when trade turnover reached $4.9 billion.

In June, Russian goods deliveries to the European Union fell by 14% compared to May, amounting to $2.7 billion. This is the lowest since February 1999. The largest portions of Russian exports to the European Union were gas ($1.2 billion), oil and petroleum products ($362 million), and iron and steel ($178 million), reports "Kommersant."

The newspaper reports that European product deliveries to Russia in June fell 5% monthly to $2.6 billion. The key categories of European exports to the Russian Federation were pharmaceutical products ($688 million), equipment ($284 million), and optical instruments ($220 million).

"According to Eurostat, the largest drop in trade turnover in June occurred with Portugal—4.3 times, to $14 million—as well as with the Czech Republic and Ireland, about twofold, to $132 million and $45 million, respectively. At the same time, in June, trade turnover increased in some countries. Trade exchanges between Bulgaria and Romania increased by 15%, to $61 million and $13 million respectively. Trade turnover also increased with the Netherlands (10%) and Croatia (7%)," writes the newspaper.

Russian economist Vladimir Milov asserts that the Russian economy under Vladimir Putin’s rule is in bad shape and getting worse. The Central Bank President and other authorities are openly talking about it.

"Last year, the head of the Russian Central Bank, Elvira Nabiullina, raised the interest rate to 16%, hoping that a strict monetary policy would curb inflation. This did not succeed, as inflation continued to rise," said Milov, a Russian economist sympathetic to the democratic opposition and former Deputy Energy Minister, in an interview with PAP in early July. He assessed that Russia would likely soon raise interest rates. That also happened. On July 26, the Bank of Russia raised the main interest rate from 16 to 18%.

The real picture is that this economy is collapsing. Maybe not as quickly as the countries imposing sanctions would like, but it’s happening, he added.

"A war economy is temporary and only possible as long as there’s money. Central Bank President Elvira Nabiullina has gambled a lot, as everyone except her is against the strict monetary policy. Everyone wants to ease it and have cheap money. Lobbyists, military, the defense industry, and business are all pushing to lower the interest rate," stated Milov.