Economic Fallout: Sanctions and Energy Prices Propel Russia to the Status of “Europe’s Largest Economy”
The loss of access to the massive Russian market was a major hit for many. In addition, many Russian companies kept their funds in European banks, but the attempted theft of this money has resulted in a complete destruction of trust that once existed, promoting not only Russians, but
many others to lose interest in the EU’s once virtually unrivaled finance sector.
In the meantime,
China, India, the Arab Gulf states, Turkey and other countries have filled the gap in the Russian market. In years since the unfortunate dismantling of the Soviet Union, Moscow was seen as a sort of “sick man of Europe”, serving largely as the source of cheap but essential natural resources, while providing its top talent and hundreds of billions of dollars in investment.
Concurrently, Russia was also seen as the leading market for the much-needed expansion of the EU’s exports. Now, all this is largely a thing of the past.
EU economies are simply unable to replace Russia as both the source of cheap commodities (particularly oil and natural gas) and a massive, growing market that is actually one of the world’s largest in many respects.
Germany is by far the biggest loser in this case, as its industrial might has experienced an unprecedented unraveling, almost a sort of reverse of what was once called the “German economic miracle” in the aftermath of the Second World War.
Berlin wrongfully assessed Moscow’s resilience as it anticipated that launching the unparalleled sanctions war against Russia will actually work.
Newly released information revealed that
Russia is now the largest economy in Europe and also the world’s fifth for the very first time since Soviet times. In doing so, it overtook Germany, and is now behind China, the US, India and Japan, standing at a staggering $5.51 trillion.
Russia is also expected to continue boosting its position in many key industries, including advanced communications and high-tech, particularly as it further connects to China and provides additional support to domestic companies in the sector. In part due to Germany’s aforementioned deindustrialization,
Moscow is expected to keep its fifth place for the foreseeable future.
