As the dust settles on Russia’s decision to ban imports on European Union and US products, manufacturers across the globe are calculating their expected losses over the coming years. For an economy (still) on the brink of meltdown however, the implications for Greece in particular can be catastrophic.
The total annual volume of Greek exports to Russia has been estimated at 405 million euro in 2013 alone, and given that exports have been considered a vital tool on the path towards economic recovery for the entire country, the loss of revenue will have a severe impact.
Fruit and vegetable sector has already taken a hit with some experts estimating losses between 50 -100 million euro already as of late August. The losses in terms of volumes is colossal, nearly 15,000 tones in kiwi, grapes, peaches, cherries and other perishables will not see the inside of Russian markets over the next season and farmers are already despairing (indicative of their mood is the move by the Peaches Growers Federation to donate part of this year’s crop to Greece’s Prison and Corrective Facilities’ System – by all accounts an unprecedented move in recent years).
Transport, freight and logistics sector is also severely impacted and the list is expected to grow over the coming months. Fears have been expressed that the reversal of the upward exporting trend could be devastating to the Greek economy in particular which has been struggling to show at least some signs of growth for the latter part of 2014. Although the decision to exclude wine and olive oil from the embargo has been received with much joy among Greek producers, the fact remains that solutions need to be outlined very fast to ensure that new crops will find their way to consumer markets and not end up in landfills rotting – creating further financial losses.
Analysts have already underlined the fact that the Greek reliance on the Russian export business and its loss could reverse the positive psychology that has followed issuing of Greek bonds across global financial markets. Government officials have been quick to rally European Union support for a possible ‘financial compensation’ programme for those hardest hit by the Russian embargo but how this will pan out remains to be seen over the coming weeks.