CRI听力:EU Sanctions to Backfire: Russia

Russia says the latest sanctions against it from the European Union will also have adverse effects on EU economies.

The comment comes after US and EU announced tougher sanctions targeting Russia's finance, defense and energy sectors.

CRI's Min Rui has more.

Russia says the EU's latest sanctions run counter to the rules of the World Trade Organization.

It warns that the EU's decision creates obstacles for further cooperation with Russia in key spheres including the energy sector.

Europe counts on Russia for a quarter of its natural gas supplies annually.

Some analysts warn that Germany in particular could suffer as a consequence of the sanctions, as the country accounts for one-third of the EU's exports to Russia.

Robert Halver is the Head of market research at Baader Bank in Germany.

"By tightening the sanctions, no country in the west will be hurt more than Germany. German medium sized companies, the backbone of the German economy, and not so much the major industrial enterprises, are negatively affected. The problem is always the same, if I have a problem in one country I have less capital to invest in another. So the problem is not so much Russia but the effect on the whole business climate."

It is estimated the sanction may threaten over 300,000 jobs related to German-Russian trade.

German authorities say the country's trade volume with Russia has already fallen by 17 percent since the start of this year.

The latest sanctions will limit access of Russian state-owned financial institutions to EU capital markets, impose an arms embargo, as well as curtail Russian access to sensitive technologies, particularly in the oil sector.

US officials say roughly 30 percent of Russia's banking sector assets will now be constrained by sanctions.

Meanwhile, Russia's three major banks have issued statements brushing off the effects of the sanctions.

Olga Anischenko is a representative from Bank of Moscow.

"We didn't plan and we are not planning to take foreign credits in the near future. The bank is oriented to work in the Russian Federation, inside the country, and these sanctions will have no impact on our business."

Last year, about a third of the bonds issued by Russia's majority state-owned banks were placed in EU financial markets.

Russia's central bank has promised to support financial institutions hit by the sanctions.

However, some analysts believe the sanctions will impact the border economy in Russia rather than just the banks.

Feng Yujun is the director of Russian Studies with the China Institutes of Contemporary International Relations.

"Unlike the previous sanctions, this round of sanctions is targeting Russia's economic lifeline, especially key sectors including energy, finance, and arms sales. The companies that are hit by the sanctions play an important role in Russia's economy. The US and EU sanctions on Russia have already moved from the stage of targeting individual senior officials to targeting the broader economy."

European analysts estimate that Russia will see a loss of about 100 billion euro from the sanctions in two years.

Meanwhile, the sanctions will cost EU countries 50 billion euros in 2015.

The latest round of sanctions comes as US and EU officials accuse Ukrainian rebels of bringing down Malaysia Airlines flight MH17 with a missile supplied by Moscow.

Moscow has denied the allegation.

For CRI, I'm Min Rui.