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Stubb: New Russia sanctions will affect Finland, but not radically

As EU ambassadors gather on Tuesday to agree a new round of tougher sanctions against Russia over its involvement in the Ukraine crisis, the Finnish PM tells Yle that he believes the restrictions will be “fair and just from the broad perspective.”

Alexander Stubb.
Alexander Stubb Image: Yle

Prime Minister Alexander Stubb has insisted that the latest, tougher round of sanctions against Russia, due to be agreed on Tuesday afternoon by EU ambassadors, will not have a radical effect on Finland’s economy.

Speaking to Yle, Stubb claimed that the government has been “working round the clock” to make sure the new measures against Russian economic and defence interests will not unfairly affect Finnish trade or jobs.

EU officials will be deciding on Tuesday afternoon on the tightest economic and arms-related restrictions on Russia so far, over its alleged involvement in the unrest in eastern Ukraine.

Europe must act

Member states of the European Union have been caught in wrangles for several weeks over how far measures against Russia should go, in an attempt to force co-operation over the Ukraine crisis.

The latest set of sanctions is expected to target Russia’s banking and energy sectors, as well as impose an arms embargo, following claims that weapons are flowing over the Ukrainian border to arm pro-Russian separatists in the region.

Finland has until now been one of the countries calling for restraint, over fears that economic restrictions against the Russian economy would have a knock-on effect on Finnish jobs and trade.

However, speaking to Yle on Tuesday, Prime Minister Stubb said the shooting down of Malaysian Airways flight MH-17 – in which 298 people were killed – was a “game changer” in the crisis, forcing the EU to take further action.

Many EU nations have accused Russia of supplying the rebels in Ukraine with the missiles that shot down the passenger airliner on July 17, a claim which Russia denies.

No radical effects

Stubb also insisted the new round of restrictions will not radically affect Finland’s economy.

“No-one wants sanctions, but the ball is in the Russian court.” Stubb said. “We've been working around the clock to prevent the sanctions unfairly hitting different parts of the Finnish or other economies. We wanted them to be fair and just from the broad perspective.”

Stubb added: “I've had more than 20 phone calls with colleagues [in Brussels] to prevent a situation where only goods linked to the Finnish economy would be on the sanctions list."

However, he conceded that Finland will feel a knock-on effect of the economic sanctions, although he said the state of the Russian economy is far more of a factor affecting Finland.

”We estimate that if the Russian economy shrinks by three percent, the effect on the Finnish economy will be 0.5 percent,” Stubb said.

Immediate implementation

Stubb said he expected the sanctions to be implemented as soon as they are decided on at a meeting in Brussels on Tuesday afternoon. He said they will not affect contracts which have already been agreed on. The measures will last for a year, with the possibility of a review after six months.

Stubb said in order to avoid the sanctions Russia would have to take clear co-operative action to resolve the Ukraine crisis.

“It’s important Russia uses its influence on the separatists in Ukraine,” Stubb said. “It is very important to send a clear message that the Ukraine crisis must be solved, and Russia can play a big part in doing so.”

Stubb admitted, however, that it is not known how much the sanctions will affect Russia. “That remains to be seen. I myself am strongly of the opinion that there will be an effect on the markets,” he said.

The existing EU sanctions list currently imposes asset freezes and travel bans on 87 individuals and companies with an alleged role in the Ukraine crisis.

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