On January 13 in Brussels, the EU sanctions envoy David O’Sullivan told Radio Free Europe that the Russian economy is currently in a very difficult state, and it will take years to recover.

“All key indicators of the Russian economy today are blinking red: the inflation rate, the interest rate, the labor market situation, and a very poor investment climate in the civilian economy. Essentially, they have been devouring the civilian economy in support of the war.”

– David O’Sullivan, EU sanctions envoy

State of the Economy and Macroeconomics: What the EU Expert Says

According to O’Sullivan, the main macroeconomic indicators point to serious problems: inflation, the level of interest rates, the state of the labor market, and weak investment activity in the civilian sector.

According to him, the Russian budget is running a deficit, revenues are down due to the drop in oil prices, which are currently around $60 per barrel Brent. At the same time, predicting the impact of these factors on Putin’s policy toward Ukraine is difficult. O’Sullivan did not say how much longer Russia will be able to wage war.

“The Russian economy is actually in a very difficult state… Will this force him to rethink his ambitions and his dedication to this aggression – that’s a completely different question, but we must keep the pressure”

– David O’Sullivan

19th EU Sanctions Package Against Russia and Its Objectives

On October 23, the European Union finally approved the 19th sanctions package against Russia. The measures aimed at limiting Russia’s main sources of income through energy, financial, and trading mechanisms are designed to weaken its ability to wage war against Ukraine. In particular, the package provides for a gradual ban on the import of liquefied natural gas: six months for short-term contracts and from January 1, 2027 for long-term contracts.

Since the start of Russia’s full-scale invasion of Ukraine, the United States and other Western countries have imposed a series of sanctions aimed at reducing Moscow’s ability to wage war by cutting off access to Western technologies. However, Russia continues to find ways to circumvent sanctions and obtain foreign components.