Russian experts, political scientists, members of the State Duma and the Federal Assembly of the Russian Federation are involved in the discussions on the Steinmeier formula for Donbass. Most experts believe that implementation of this formula is impossible, however backing it, Russia ensures the opportunity to raise the issue of lifting sanctions at the international level.
Despite numerous statements made by the Russian authorities declaring Western sanctions do not inflict serious economic damage to the state, even those experts close to the Presidential Office of the Russian Federation, negatively assess their impact.
Currently, Russia’s GDP growth is less than 1%. In the first half of 2019, it scarcely reached 0.9%, which is significantly lower than the forecasts of the Ministry of Economy of the Russian Federation for 2019, estimated at 2.2% – 2.5%. Sharp export decline is also observed: exports of goods from the Russian Federation decreased by 3.7% for seven months of 2019, compared to the same previous year period.
In addition, for five years of international political and economic sanctions, drastic outflow of the private capital from Russia has been observed. Though currently the private capital outflow is lower than in 2014, negative trends are all the same.
For a long time the Russian Federation authorities has put considerable efforts to lift or at least weaken the imposed sanctions, which slowly though consistently destroy the country’s economy. That is why Russia wants to provide its European “comrades” with an opportunity to lobby the lifting of anti-Russian sanctions in the public by formal baking of Steinmeier formula.
Friends of Russia in Germany have already taken advantage of this occasion. Thus, the Bundestag deputy representing right populist party Alternative for Germany (AfD) Bernd Baumann declares the need to lift sanctions against Russia. He called the German government to vote against sanctions in the European Council at the earliest opportunity and redress “losses borne by the companies from politically motivated decrease in turnover and profit”. He also stated that the EU’s sanction measures against Russia “have not only failed to meet their goals, but are also standing in the way of a political solution to the Ukraine conflict.”
It seems clear that now lifting of sanctions is the number one task for Russia, since this is the only way to stop the rapid decline of the Russian economy. Even if the EU states ease sanctions against the Russian Federation, this will be a positive signal for business and foreign investors.
It is also obvious that support of the Steinmeier formula is nothing more than a political ploy for Putin, since the Russian leadership is not going to meet its terms when they concern them, but will put all the efforts to blame Ukraine for failure to fulfill it.
