Russia and the EU: Economy through Statistics


This year marks the 20th anniversary from the day the first agreement between Russia (the USSR then) and the EU countries was signed. The agreement “On trade and commercial economic cooperation” was concluded in 1989 for 10 years’ period. In accordance with the agreement, the EU lifted limitations on the Soviet export into the European Community keeping those only for certain especially ‘sensitive’ goods: steel products, textile and others. In turn, the USSR established a non-discriminatory regime for EU goods in terms of quotas and licensing. In 1994, between the EU states on the one side and Russia on the other side, there was signed a large scale Partnership and Cooperation Agreement (PCA) that regulated practically all the aspects of possible political, economic and trade interaction. Then in 1997 this agreement, after being signed by all 15 EU member states, came into effect and created a most favorable trade regime.

Today, the EU is Russia’s main trade partner in the world. The share of the original 15 EU member states in Russia’s turnover with foreign countries was over a third. The EU enlargement in 2004 and 2007, the accession of Central European countries that traditionally had intensive trading links with Russia, has led to absolute dominance of the EU in the Russian foreign trade, with its share surpassing 50%. The trade shows positive dynamics: over the period from 1998 to 2008, the turnover between Russia and the EU grew annually by 20% on average.

 

 Russia-EU Turnover

 

 

 

The EU is the chief market for Russian exports, as well as the largest importer. Since 2003, the Russian export was growing a lot faster, mainly due to the rising energy carrier prices. In 2006 the Russian export surplus reached its maximum  of $120 billion. The situation changed in 2007, when the Russian import from the EU grew by 23%, while exports remained practically unchanged (+2%). The growth of Russian imports was accounted for by an increase in the number of bought and sold machines, transport equipment and final products.  However, because of the financial crises that began in 2008, the turnover has dropped: the drop in export and import was caused by a drop in prices.

Russia’s Export into the EU                               

 

Russia’s Import from the EU

The analysis of Russian export structure into the EU member states shows that the key goods and commodities are still fuel and energy; compared to the previous periods, their share is growing. The increase in the total monetary value of this commodity group export (prior to 2008) is accounted for by the rise in the cost of key items: crude oil and oil refinement products, natural gas, etc.

Russia’s Export into the EU

In Russia’s import pattern, there predominates the import of machines, equipment and means of transportation, whose share in January 2008 grew significantly. The import of metals and metal products grew by 28.8%. The import of machines, equipment and means of transportation grew by 54.1%. Half of all the export from the EU into Russia in 2008 accounted for equipment and vehicles. Russia’s import from the EU of foodstuffs and agricultural raw materials (apart from textiles) in January 2008 grew by 16.2% compared to January 2007 in terms of cost. There was a significant growth of import of the chemical products and raw rubber — by 41.1%.

 Russia’s Import from the EU

 

Russia’s principal trade partners from the EU are Germany, the Netherlands, Italy and Finland, which together account for 50.1% of the Russia-EU turnover.  Germany (€32 billion) was the largest exporter to Russia in 2008. The second largest exporter — and far behind — is Italy (€10 billion), followed by Finland (€8 billion). Germany (€35 billion) was also the largest importer, followed by the Netherlands (€20 billion) and Italy (€16 billion). Other countries that make up Russia’s top 10 partners in 2008 are France, Poland, the UK, the Czech Republic, Hungary, and Spain.  

Russia-EU Turnover (as of 2008)

 

Eurostat registers a growth in Foreign Direct Investment from the EU into Russia in recent years. For example, in 2006 they amounted to €10.8 billion, and €16.7 billion in 2007 reaching €21.6 billion in 2008. At the same time, there was a growth in direct investment from Russia into the EU countries from €1.4 billion in 2006 to €9.2 billion in 2007, while in 2008 they fell by €0.4 billion.

 

Intensive and long-term cooperation between Russia and the EU gives clear results: we see a growth in turnover, the scope of investment, an expansion in the spheres of strategic partnership. Obviously, the interests of Russia and the EU member states do not always coincide. However, back in 2007, while being President of Russia, the present-day Prime Minister Vladimir Putin in his article "Russia and the Half-Century of European Integration ” remarks that “we are prepared to resolve possible differences through open dialogue and compromise based on mutually agreed rules”.

 

 

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