ERR - The recent wave of sanctions against Russia means that EU members have finally admitted that economic losses are inevitable in dealing with Russia, says columnist Ahto Lobjakas.

“It is clear that neither the EU nor the United States are prepared to respond in force, or approve a military intervention. That has been ruled out since the very beginning. The sanctions do not aim to change the situation in Luhansk or Donetsk already tomorrow,” he said.

Lobjakas said the fact that the EU moved forward from symbolic sanctions to ones with real economic impact is an important step. The union also showed that it is prepared to be as tough as the United States, which imposed sanctions aimed at cutting credit to Russia.

The UK has accepted that not only the bond market will suffer, but that the consultation and insurance wings of the financial market will also absorb an impact.

The deputy governor of the Bank of Estonia, Madis Müller, said the new sanctions are unlikely to affect Estonian banks or banks operating in Estonia. He said Krediidipank, a majority of which is owned by the Bank of Moscow, one of the Russian banks highlighted in the new sanctions, will also not suffer, as the sanctions do not hold any sway over banks founded in the EU.

Müller said Russian banks will feel the effect of the sanctions when they try to sell bonds or issue new shares.