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Economic sanctions against Russia to affect Slovakia

THE THIRD wave of sanctions against Russia, on which the diplomats from European Union’s member states agreed on July 29, will impact the Slovak economy. The country may lose about 2 percent of its GDP in the short term, economists predict. They will affect not only companies exporting their products directly to Russia, but also investors who participate in big state projects in Russia, the public-service Radio and Television of Slovakia (RTVS) reported.

THE THIRD wave of sanctions against Russia, on which the diplomats from European Union’s member states agreed on July 29, will impact the Slovak economy. The country may lose about 2 percent of its GDP in the short term, economists predict. They will affect not only companies exporting their products directly to Russia, but also investors who participate in big state projects in Russia, the public-service Radio and Television of Slovakia (RTVS) reported.

Russia is an important business partner for Slovakia, especially regarding the imports of raw materials. This means that the country would suffer more significant damage if Moscow imposed counter-measures against the sanctions. If Slovakia halves its exports to Russia, the country may loss up to 2 percent of its GDP, economist Peter Havlik told RTVS. He added that the losses may be higher if the sanctions are imposed too long.

About 5 percent of Slovak exports are destined for Russia. The sanctions will affect many companies, for example carmakers, but also subcontractors of companies from other countries that export to Russia.

“We cannot just talk about the total volume, meaning those 5 percent of exports, which would be partially affected by these sanctions, but certainly we need to talk or to perceive the impact on a wider scale, especially those of our suppliers for companies that supply the Russian market,” Peter Mihók, head of the Slovak Chamber of Commerce and Industry, told RTVS.

The sanctions will also affect investments into Russian companies co-owned by the state. Though Slovak firms invest mostly into private sphere in Russia, there are also projects where the Russian state participates, Mihók added.

The EU sanctions will also affect Russian banks, including Sberbank that has a branch in Slovakia. According to the official statement, the bank will closely monitor the situation. It, however, will not comment on the concrete consequences as it does not know the exact wording of sanctions, as reported by RTVS.

The Pravda daily wrote that the sanctions will also affect Slovak defence, since they target the export of Russian military technologies.

Source: RTVS, Pravda

Compiled by Radka Minarechová from press reports

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