Bank says sanctions hurting Europe more than Russia
30 replies, posted
[QUOTE](Reuters) - Sanctions put in place amid the crisis in Ukraine have caused more problems for Europe than Russia, the chief executive of Italian bank UniCredit (CRDI.MI) was quoted as saying in an interview with a Czech newspaper.
"The sanctions have caused Russia problems and my impression is that (they are) even bigger for Europe," Federico Ghizzoni told daily Hospodarske Noviny in an interview published on Friday, without giving more detail.
Ghizzoni also reiterated the bank's target of a full-year net profit of 2 billion euros.
He said UniCredit, Italy's biggest bank by assets, was doing well in Russia despite the current situation but added an economic slowdown would impact the bank in that market. "But not immediately. In a year or two at the earliest," he said.
Sanctions imposed by the United States and the European Union on Russia over Moscow's policies on Ukraine are hitting the Russian economy and restricting some Russian companies' access to Western financial markets.[/QUOTE]
[url]http://www.reuters.com/article/2014/09/26/us-ukraine-crisis-russia-unicredit-idUSKCN0HL0SJ20140926[/url]
Pressuring Russia to stop their landgrabbing is more important than making profit.
[QUOTE=Talishmar;46091298]Pressuring Russia to stop their landgrabbing is more important than making profit.[/QUOTE]
Well not to banks.
[QUOTE=Amez;46091381]Well not to banks.[/QUOTE]
Banks can't make a profit if a T-90 is barreling through their lobby.
[QUOTE=Shisno;46091388]Banks can't make a profit if a T-90 is barreling through their lobby.[/QUOTE]
yeah because what Russia really wants to do to validate their cause is attack civilian targets with armoured vehicles
My bank is doing badly cause of sanctions =/= Europe doing badly
[QUOTE=Samiam22;46091692]yeah because what Russia really wants to do to validate their cause is attack civilian targets with armoured vehicles[/QUOTE]
It was an analogy. IE, banks aren't really making money when your home country is being invaded.
[QUOTE=Amez;46091381]Well not to banks.[/QUOTE]
well banks tend to make a profit even when they go bankrupt so...
[QUOTE=Swineflu;46091897]My bank is doing badly cause of sanctions =/= Europe doing badly[/QUOTE]
But their bank isn't on target for making two billion fucking euros this year, that must mean the entire continent is suffering! Forget the annexation of Crimea or three-and-a-half thousand dead people, think of their salaries!
Is this guy crying poor and aiming for a $2 billion profit at the same time?
Finland is gettin fucked by these sanctions btw.
Same goes for Denmark.
As much of a joke as it sounds like, we're loosing fortunes on not being able to sell Carlsberg / beer to Russia.
But Italy was already broke before the boycott.
This map shows how valuable agriculture is for the economy in different regions:
[img_thumb]http://epp.eurostat.ec.europa.eu/statistics_explained/images/9/95/Share_of_agriculture_in_the_economy,_gross_value_added_at_basic_prices,_by_NUTS_2_regions,_2010_%281%29_%28%25_of_total_value_added%29.png[/img_thumb]
As you can see, agriculture is very important to the economy of many regions and countries.
This image shows the 2012 value of trade between the EU and USA, and Russia:
[img_thumb]http://capreform.eu/wp-content/uploads/2014/08/CNN-russia_sanctions.jpg[/img_thumb]
As you can see, agricultural exports to Russia were incredibly profitable for the EU.
Now, wouldn't this leave Russia hungry? This a lot of food that they just want have anymore right? Russia doesn't produce a lot of food compared to Europe, but it has two advantages that will get it through these sanctions. The first, is that most agriculture in Russia is not corporate, it's private household farms. These have been wildly successful, these farms represent only 20% of used farmland in Russia but are accountable for over 50% of agricultural production. The number of these farms continue to grow annually as well. The second advantage is that from the breakup of the Soviet Union agriculture production in Russia has declined and reached an all time low, but in the last 5 years has begun improving. Russia imported so much food because the transition from command economy to market economy left the subsidized farms a mess and it was cheaper to import from Europe. Now that Russia has had time to adjust into it's market economy, these larger corporate farms have fiscal responsibility to encourage them to increase efficiency. Basically, Russia has smaller farms popping up yearly which have high production efficiency while their larger corporate farms have begun to adjust and increase their production. This covers the short and long term agricultural needs of Russia.
I can't believe how many disagrees this thread has, it shows incredibly nativity of the way economies work. Also, I know hating on bankers is quite the popular thing to do, but surely you must realize that as a banker he might just know a little bit more about the economic situation than you? Has everyone already forgotten about the farmers in France?
Nobody wants to support Russia and its actions in Ukraine but it doesn't take a genius to know that Russia will be able to survive these sanctions longer than Europe will.
[QUOTE=spiritlol;46100621]This map shows how valuable agriculture is for the economy in different regions:
[img_thumb]http://epp.eurostat.ec.europa.eu/statistics_explained/images/9/95/Share_of_agriculture_in_the_economy,_gross_value_added_at_basic_prices,_by_NUTS_2_regions,_2010_%281%29_%28%25_of_total_value_added%29.png[/img_thumb]
As you can see, agriculture is very important to the economy of many regions and countries.
This image shows the 2012 value of trade between the EU and USA, and Russia:
[img_thumb]http://capreform.eu/wp-content/uploads/2014/08/CNN-russia_sanctions.jpg[/img_thumb]
As you can see, agricultural exports to Russia were incredibly profitable for the EU.
Now, wouldn't this leave Russia hungry? This a lot of food that they just want have anymore right? Russia doesn't produce a lot of food compared to Europe, but it has two advantages that will get it through these sanctions. The first, is that most agriculture in Russia is not corporate, it's private household farms. These have been wildly successful, these farms represent only 20% of used farmland in Russia but are accountable for over 50% of agricultural production. The number of these farms continue to grow annually as well. The second advantage is that from the breakup of the Soviet Union agriculture production in Russia has declined and reached an all time low, but in the last 5 years has begun improving. Russia imported so much food because the transition from command economy to market economy left the subsidized farms a mess and it was cheaper to import from Europe. Now that Russia has had time to adjust into it's market economy, these larger corporate farms have fiscal responsibility to encourage them to increase efficiency. Basically, Russia has smaller farms popping up yearly which have high production efficiency while their larger corporate farms have begun to adjust and increase their production. This covers the short and long term agricultural needs of Russia.
I can't believe how many disagrees this thread has, it shows incredibly nativity of the way economies work. Also, I know hating on bankers is quite the popular thing to do, but surely you must realize that as a banker he might just know a little bit more about the economic situation than you? Has everyone already forgotten about the farmers in France?
Nobody wants to support Russia and its actions in Ukraine but it doesn't take a genius to know that Russia will be able to survive these sanctions longer than Europe will.[/QUOTE]
And to top it off Russia has many other countries to import from.
I don't think anyone wants to claim that Europe is not getting hit pretty bad by it, but Russia is getting hit much worse.
[QUOTE=Riller;46100670]I don't think anyone wants to claim that Europe is not getting hit pretty bad by it, but Russia is getting hit much worse.[/QUOTE]
Spiritlol literally just proved this to be wrong. They are not having a hard time at all. Yes, the ruble has lost a lot of value, but Russia is still easily capable of feeding itself. Europe on the other hand, yeah.
We're losing money, and sitting on a stock of unsold foods while Russia is completely fine with this. Why? Because they are prepared for this kind of situation. They KNOW that the world is gonna start treating them like villains. Probably for a good reason, but this whole Ukraine situation has become so out of control that we can't tell what the right thing is.
What they mean is the sanctions are hurting the bank.
I miss Valio yogurts(
[QUOTE=Swineflu;46091897]My bank is doing badly cause of sanctions =/= Europe doing badly[/QUOTE]
Issue is though governments will give lots of money to banks to stop them failing and causing recession mk2. So while a bank doing badly might not directly affect you, you can be sure your taxes are going towards keeping it propped up and safe. Also with businesses getting damaged by sanctions investors will think twice before investing in nations which would suffer from sanctions.
[QUOTE=DaBeaver;46102942]I miss Valio yogurts([/QUOTE]
Yeah, but their cheese was awful.
Karat master race.
[QUOTE=DrAkcel;46103546]Yeah, but their cheese was awful.
Karat master race.[/QUOTE]Bah, our cheese is bloody fantastic. And it's all [del]mine[/del] ours :v:
[editline]29th September 2014[/editline]
Though I am concerned I might end up like Kim Jong-un
[QUOTE=GentlemanLexi;46102381]Spiritlol literally just proved this to be wrong. They are not having a hard time at all. Yes, the ruble has lost a lot of value, but Russia is still easily capable of feeding itself. Europe on the other hand, yeah.
We're losing money, and sitting on a stock of unsold foods while Russia is completely fine with this. Why? Because they are prepared for this kind of situation. They KNOW that the world is gonna start treating them like villains. Probably for a good reason, but this whole Ukraine situation has become so out of control that we can't tell what the right thing is.[/QUOTE]
That's €3.8b total, and some of those goods are exported elsewhere. Spiritlol didn't show that this was hurting the European economy, he simply showed that EU exports stuff to Russia, a well known fact.
Here's some articles that disagree with the fact that the sanctions are hurting the EU more than Russia:
[url]http://www.forbes.com/sites/timworstall/2014/08/18/now-we-know-the-cost-of-the-russian-sanctions-on-the-european-union-food-exports/[/url]
[url]http://www.forbes.com/sites/timworstall/2014/08/08/the-quite-hilarious-russian-propaganda-about-the-ban-on-eu-food-imports/[/url]
I don't know if this guy is super biased or whatever, but I honestly trust his assessment more Spiritlol's.
[QUOTE=DaBeaver;46102942]I miss Valio yogurts([/QUOTE]
You have no idea how costly they are there in Finland. I'd eat some "Чудо" right now :(
[QUOTE=Talishmar;46091298]Pressuring Russia to stop their landgrabbing is more important than making profit.[/QUOTE]
Ruining people's buisnesses due to political reasons is more important then anything.
[QUOTE=Talishmar;46091298]Pressuring Russia to stop their landgrabbing is more important than making profit.[/QUOTE]
Everybody is supportive of losses they perceive to be "for the greater good" as long as it doesn't affect them. You'd change you mind very quickly if it started hurting you.
[QUOTE=acds;46104418]Everybody is supportive of losses they perceive to be "for the greater good" as long as it doesn't affect them. You'd change you mind very quickly if it started hurting you.[/QUOTE]
Tbh this stuff is already hurting me.
The economical side is not noticable yet here. At least in Moscow and surrounding regions.
But going to Europe for a vacation is getting harder from what I heard and I am planning a hitchhiking trip to Berlin (just like my grandad in 1945 huehue) this summer.
[QUOTE=GoDong-DK;46103748]That's €3.8b total, and some of those goods are exported elsewhere. Spiritlol didn't show that this was hurting the European economy, he simply showed that EU exports stuff to Russia, a well known fact.
Here's some articles that disagree with the fact that the sanctions are hurting the EU more than Russia:
[url]http://www.forbes.com/sites/timworstall/2014/08/18/now-we-know-the-cost-of-the-russian-sanctions-on-the-european-union-food-exports/[/url]
[url]http://www.forbes.com/sites/timworstall/2014/08/08/the-quite-hilarious-russian-propaganda-about-the-ban-on-eu-food-imports/[/url]
I don't know if this guy is super biased or whatever, but I honestly trust his assessment more Spiritlol's.[/QUOTE]
Interesting reads thanks for the articles. Even though disagrees with me he reaches the same conclusion of:"This is stupid. Bring back free trade, all you really doing is hurting the farmers."
He's arguing that Russia is taking damages in money more so that Europe, but I didn't cover that in my post because I personally had no idea how Russia was going to take it in the wallet. Interestingly enough, he only has estimations but it's forgivable considering Russia probably won't release that kind of information. One thing he doesn't consider is my point of Russia being able to feed itself, as all he covers for that is asking the question "Who will they buy from, china, ect?" and "Will it be enough?" without covering Russia's own food production. I don't think hes biased just that he's concentrated on the money while mine was on the food production. He did however show that Europe has been finding ways to fill the gap Russia left but also went on about how it's still hurting the farmers. $167 mil isn't a lot for a country to lose but when that burden is almost exclusively placed on farmers it's easy to see why they are angry. And if there's one thing Russia taught us is you don't want angry farmers.
This has changed my opinion from Europe losing to it being a tie. Europe's farmers are getting poorer but not desolate and Russia is probably losing money but lets be real here neo-soviet Russia doesn't seem like the kind of country that particularly cares about money. They'll be able to grow enough food and do what Russia does best, have the bulk of the population support the Kremlin and Military's ability to practice imperialism.
Either way it still a loss for Ukraine.
Just nuke them all for fucks sake.
[QUOTE=GentlemanLexi;46102381]Spiritlol literally just proved this to be wrong. They are not having a hard time at all. Yes, the ruble has lost a lot of value, but Russia is still easily capable of feeding itself. Europe on the other hand, yeah.
We're losing money, and sitting on a stock of unsold foods while Russia is completely fine with this. Why? Because they are prepared for this kind of situation. They KNOW that the world is gonna start treating them like villains. Probably for a good reason, but this whole Ukraine situation has become so out of control that we can't tell what the right thing is.[/QUOTE]
The point of the sanctions is not to starve their people through dpolitical sieging its to disrupt their economy which its doing fantastically
[editline]30th September 2014[/editline]
It would only make things worse if we went into this purposefully trying to starve their people. Also citing household farms as being widely successful is rather hopeful, small farms cannot support all of Russia's food nor could they produce all types of foods,additionally sanctions went into effect at the end of the year so what the farmers produce this year is based on a quota including the imports, farmers can't magically make more food appear the instant the imports stop
[editline]30th September 2014[/editline]
Further more there will be an unintended consequence of higher food costs for a few years since if the sanctions last longer next years quotas won't be nearly as large counting on continuing sanctions so it'll force the price of food up in Europe but much higher in Russia when this is all over
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