How much Greek products were affected by European sanctions in Russia

By Matina Harkoftaki

Greek export companies facing exposure to the Russian market are facing new difficulties created by the fourth package of sanctions imposed by the European Union on Russia. The new package, which was added to the existing sanctions, mainly affects luxury goods, as the European directive prohibits the export of products whose value per piece exceeds 300 euros. According to the first estimates for the direct effects on the Greek-Russian bilateral trade recently published by the Office of Economic and Commercial Affairs of the Greek Embassy in Moscow, the Greek products that are significantly affected by these sanctions are fur clothes and accessories. as well as clothing and leather goods.

The products affected by the sanctions

It should be noted that, according to ELSTAT data, the value of exports of this category to Russia for the whole of 2021 had amounted to 14.41 million euros and a quantity of 28,147 kg, representing a percentage of 7% on of total exports to that country. This means that the Russian market has been erased from the map for Greek fur companies, which are located mainly in Western Macedonia. In an effort to fill the gap, the region’s 2,000 fur companies have sought alternative destinations, with Chinese and South Korean markets more likely to concentrate, a process that, however, takes time and targeted action. Among the categories that seem to be affected are yachts, whose exports to Russia last year reached 3.476 million euros, footwear (worth 3.467 million euros), beauty products (2.830 million euros), wines , spirits and spirits (EUR 1.422 million), as well as clothing and textiles (EUR 1.579 million).

Exports of goods from Greece to Russia that could potentially fall under the sanctions regime cover about 13% of total Greek exports to Russia, ie 26.827 million euros out of a total of 206.616 million euros in 2021. From Greek importers, on the other hand, will have to look for suppliers from other countries for iron and steel products worth € 4.324 million, representing 0.10% of total Greek imports from Russia, which in 2021 amounted to 4.297 billion euros.

Dramatic drop in exports

The impact of European sanctions is reflected in the performance of Greek exports to Russia during the first three months of this year. In particular, according to the provisional data of ELSTAT, our country’s exports amounted to 34.4 million euros, compared to 40.64 million euros in the corresponding quarter of 2021, recording a decrease of 15.77%. It is indicative that in March 2022, the first month with the obvious consequences of the crisis in Ukraine, Greek exports to the Russian market lost more than half of their value, as they fell by 66%, reaching only 5.42 million, compared to 15.96 million in March 2021. This dramatic decrease was expected in the market mainly for consumer products, due to the conditions of uncertainty in banking transactions and the intense problems in transport. Greek export companies were deeply concerned about whether the orders would reach their final destination safely, as well as whether they could be repaid smoothly through remittances from Russia. In fact, in the first period after the imposition of European sanctions, there were incidents where Greek banks returned remittances from Russia intended for the payment of Greek companies, considering that all cash flows coming from Russia are illegal, something that in no case does not apply. All this should take into account the possible high costs that Greek products may now incur due to the significant devaluation of the Russian currency, making them particularly expensive for the average Russian consumer. It should be noted that the main Greek exports to Russia in the first quarter of this year were raw tobacco 8 (8.6%), sweets ́ spoons ́ jams (5.5%), precious metal ores (5.1%), slabs -plastic sheets (4.8%), olives (4.7%), confidentiaĺ products (4,3%), copper pipes (4,2%), lifting machines and apparatus, loading (3, 9%), treated mineral oils (3.6%), electric accumulators (3.2%).

Vertical rise in imports

On the other hand, imports from Russia in the first quarter presented a completely different picture, which jumped to 1.69 billion euros, recording an increase of 130.55% compared to the same period last year. This is mainly due to the dramatic increase in prices for energy products, in which our country is more dependent than other products it imports from Russia. A typical example is natural gas, which Greece procured at the price of 1,164.41 euros per tonne, when in the corresponding quarter last year the price was 246.82 euros per tonne. Respectively, the price of processed mineral oils reached 647.32 euros per tonne, when last year it was 379.16 euros per tonne, at the same time that the processed mineral oils reached 525.57 euros per tonne, compared to 374.97 euros, and coal at 173.35 euros per tonne, compared to 64.07 euros per tonne. So, what one can conclude is that the high prices of hydrocarbons skyrocketed the value of Greek imports in the first quarter of 2022, resulting in the expansion by almost 140% of the trade deficit of our country compared to the first quarter of last year.