Trade sanctions would hurt Russia more than the West: German minister

Reuters News
Posted: Mar 23, 2014 2:57 PM

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble said on Sunday that the European Union was united in its readiness to impose economic sanctions on Russia if the stand-off over Ukraine escalates, and that Moscow had much more to lose than the West,

"I don't think we are divided. None of us wants to escalate, but if Russia changes things unilaterally, then it must know that we won't accept it and that relations will be bad," Schaeuble told German television in an interview.

"Russia has a lot more to lose in the medium term than the West, than Europe or the United States," he said, adding that the aim was to uphold international law and it was "of secondary importance whether there is an economic or financial cost".

German companies are worried that sanctions could push up their energy prices if Russia decided to restrict oil and gas supplies, and deprive them of an important export market.

Germany's "wise men" council of economic advisers said last week that the Ukraine crisis was the biggest threat to global growth, and especially Germany's, because of Russia's importance of an energy exporter.

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Schaeuble, who throughout the euro zone debt crisis insisted that German taxpayers should not be overburdened by the bailout schemes, said it was important that any financial assistance the EU provides to Ukraine should not be squandered.

The government in Kiev and the donors would have to set up appropriate structures "so that the money goes where it is needed and does not end up in some obscure pot".

(Reporting by Stephen Brown; Editing by Kevin Liffey)