Europe News

US sanctions are more harmful to Europe than Russia, top Russian lawmaker says

Key Points
  • America imposed fresh sanctions on Russia in early August. These affect people and companies that invest certain amounts into Russia's energy export pipelines
  • And Europe has strong links with Russia when it comes to its energy sector
US sanctions on Russia more harmful to Europe, Russian deputy PM says

The U.S. sanctions against Russia will ultimately have more impact on Europe than on Moscow, Russia's deputy prime minister told CNBC Saturday.

America imposed fresh sanctions on Russia in early August, building on previous penalties that focus on interference in the 2016 U.S. election, human rights violations, the annexation of Crimea and the alleged destabilization of eastern Ukraine. These affect people and companies that, for instance, invest certain amounts into Russia's energy export pipelines. And Europe has strong links with Russia when it comes to its energy sector.

"My assessment is that U.S. sanctions eventually bring more harm to Europe than to Russia, also as a result of our counter-sanctions that create burden costs for the European economy," Arkady Dvorkovich, told CNBC on the sidelines of the Ambrosetti Forum in Italy.

"We aren't happy about it but we had to react and Europe is suffering from that," he added.

'We must defend our economic interests'

Though Europe has been at the forefront of imposing sanctions on Russia, mainly because of the Ukrainian conflict, certain officials have become nervous about the recent decision from the United States. This is because they could potentially hurt the energy security of certain countries. A key energy project is Nord Stream 2, a gas pipeline meant to transport gas from Russia to Germany crossing the Baltic nations.

Russian economy performing well but geopolitical situation is 'bad': Deputy PM

Speaking in August after President Donald Trump signed in the new measures against Russia , Jean-Claude Juncker, the European Commission president, said the bloc would be ready to take counter measures if the penalties harmed European companies. "We are ready: We must defend our economic interests vis a vis the United States, and we will do that," Juncker said, according to Reuters.

Russia relations with Europe

The sanctions are not a positive contribution to global growth, Dvorkovich also said Saturday, while adding: "We do want much better relations with Europe." Dvorkovich recognized that the Russian economy is doing better but stated that geopolitics is a concern for global growth. "We have recovered from the decline since in the last couple of years," he said.

But "geopolitically (it's) bad, clearly bad. Regional conflicts in particular Syria, the North Korea issue, Russia-Europe, Russia-United States – all those things are negative for the global outlook and create huge risks for everyone," he said.

Oil at $100 a barrel would create 'huge stress' on global economy: Russia deputy PM