Businesses on Both Sides of the Divide Push Back Against Russian Sanctions
Two major business lobbies in the United States plan to break with President Barack Obama's plan to issue more sanctions against Russia. The two groups, the U.S. Chamber of Commerce and National Association of Manufacturers, believe the additional sanctions will harm state-side employees and businesses.
Sources familiar with the matter told Bloomberg Businessweek that the lobbies plan to take advertisements in the New York Times, Wall Street Journal, and Washington Post this Thursday to address the economic impact of these sanctions.
Copy for the advertisements obtained by Bloomberg Businessweek read as follows:
"...the only effect [of economic sanctions would be] to bar U.S. companies from foreign markets and cede business opportunities to firms from other countries."
Rather than address Obama directly as the force behind the sanctions, lobby presidents Jay Timmons and Thomas Donohue address "some U.S. policymakers."
Igor Sechin, CEO of Rosneft, a Russian owned natural gas and oil company, expressed similar concerns about the impact of future sanctions. In a press conference this week, Sechin told Handelsblatt (Germany's largest business and financial publication), "Sanctions will not help anybody. There will only be additional risks. The number of those [indirectly] concerned will grow."
RELATED: Marissa Mayer Apologizes for Her Poorly Timed Nap
Economic experts and industry leaders in Germany have expressed the same concerns as the U.S. lobbies. These industry leaders include global superpowers like Siemens, Volkswagen, Adidas, and Deutsche Bank. Germany has long had a positive economic relationship with Russia, and Merkel seems to be one of the few politicians that Putin truly respects. Last year, Germany and Russia had 76 billion Euros in trade turnover. It is estimated 300,000 jobs are at risk if economic sanctions against Russia are issued.
The newest round of sanctions are on the agenda for the June 26 and 27 European Union leaders meeting, overlapping with when the U.S. lobbies will run their advertisements. The sanctions up for discussion are all designed to target Russia's $2 trillion economy, in an effort to end their incursions into Ukraine.
Putin is working to counter any pro-sanction sentiment. Russian legislators have removed his ability to use force in Ukraine. He is also getting personally involved in the gas deal between Russia's Gazprom and Austria's OMV AG to build a natural gas pipeline across Eastern Europe.
RELATED: Marissa Mayer Missed an Important Dinner Meeting Because She Took a Nap
While economic concerns are mounting, White House officials are holding strong on the front of economic sanctions. Laura Lucas Manuson, a White House National Security Council spokesperson, said there have been "frequent conversations with business leaders on this issue since the beginning of the crisis to understand their concerns," but that the United States cannot go on with “business as usual."
White House press secretary Josh Earnest echoed Manuson's statement. If Russia stops supporting separatists in Ukraine and moves away from Ukraine's borders, it will "make sanctions, additional sanctions, less likely." This statement comes just hours after rebels shot down a Ukrainian helicopter during the ceasefire, killing everyone on board.
While Manuson notes "business as usual" cannot continue, the second largest company in the United States, Exxon Mobil, has been doing just that. With a $900 billion oil deal with Rosneft currently underway, and $600 million already invested, CEO Rex Tillerson has personally made efforts to keep a relationship with Russian officials, regardless of existing sanctions. He spoke at the World Petroleum Congress just last week along side Sechin, even though the government has urged U.S. entities not to appear at events with sanctioned Russians.
RELATED: Monet's $54 Million Water Lilies Leads the Pack at Major Sotheby's Auction
Yesterday, Rosneft and ExxonMobil finished installing the world’s largest topside drilling platform at Sakhalin-1. Production from this oil field is set to start in December — that is, if sanctions do not prevent the deal from going forward. Rosneft is clearly a bit concerned, pushing to start the Arctic deal with Exxon ahead of schedule as well.
In the event new economic sanctions are issued against Russia, expect to see a variety of businesses up in arms, from Exxon to Visa, as well as nations who depend on Russia for energy. This would also be, arguably, the most intense show of aggression by the Western World against Russia in recent history.
This article was originally published at http://www.thewire.com/business/2014/06/russian-sanctions-impact-the-european-economy/373346/
