Since the beginning of the Russian President Vladmir Putin’s
encroachments on the Ukrainian region of Crimea, the international community
has scolded Russia’s military and alleged unlawful actions. Russia’s
overwhelming military presence surrounding Crimea by means of the Black Sea was
a main source of tension. This tension rose substantially after Putin’s
allegedly unlawful annexation of Crimea.
In response to Russia’s actions regarding the Crimea crisis,
the European Union, Canada, and the U.S. have all imposed serious sanctions to
deter Russia. Through the developments of the situation these sanctions have
intensified, and as a result Russia may be heading toward a recession.
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As reported by the Russian bank VTB Capital, the country’s
economy will shrink over the next two quarters. Russia’s Mice stock index has
dropped 13.2 percent so far this year, and the ruble has dropped 8.9 percent so
far this year in comparison to the U.S. dollar (making it the second-worst
performing currency at this time, second only to the Argentine peso.
Facing these sanctions damages Russia’s international trade
drastically, discourages most foreign investment, and has hurt domestic
spending.
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On Friday the 21st, Visa and Mastercard actually stopped
processing transactions for customers of some Russian banks temporarily.
While it seems the sanctions from the U.S., Canada, and
European Union have been successful at crippling the Russian economy, it doesn’t
appear to have deterred them from keeping their military presence in and around
Crimea. Putin has actually retaliated by placing his own sanctions against 13
Canadian officials!
Original Source: http://www.cbc.ca/m/touch/business/story/1.2583988
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