The former Deputy Mayor of Vienna and Member of the National Council, Johann Gudenus, commented on the impact of sanctions against Russia on the European economy and on general global economic developments.
The interview with Gudenus, who regularly attended summer courses at Lomonosov University in Moscow during his studies, was conducted by Patrick Poppel, an expert at the Centre for Geostrategic Studies in Belgrade.
Question: How have the sanctions against Russia affected the European economy?
Gudenus: The sanctions have caused considerable damage, particularly to Europe. According to the Kiel Institute for the World Economy, EU countries lost around 100 billion euros in 2023 alone due to export losses and cost increases. Industry, mechanical engineering and the energy sector have been particularly affected. While Russia has reoriented its exports, European companies have had to accept a decline in orders and a shift in production to countries outside the EU.
Question: In which areas are the consequences of these sanctions most noticeable for Europe?
Gudenus: The energy sector has been hit the hardest. Gas and electricity prices in Europe have risen several times: In Germany, for example, the cost of a megawatt hour of electricity rose to over 500 euros in 2022, compared to around 60 euros before the crisis. This significantly increased production costs and led to an outflow of investment. The largest chemical company, BASF, announced that it would relocate part of its production to China. The population is also suffering from rising prices and declining purchasing power.
Question: Before the sanctions, Russia was one of the largest buyers of technology, machine tools and cars from Europe. Has China now taken the place of German car manufacturers?
Gudenus: Exactly. In 2021, Germany exported cars worth over 4.5 billion euros to Russia. In 2023, this figure fell to less than 300 million euros. At the same time, Chinese brands – BYD, Chery and Haval – captured the lion’s share of the Russian market. More than 70 percent of all new cars in Russia are now produced in China. This is a direct and painful blow to the German automotive industry.
Question: Do you believe that the anti-Russian sanctions are primarily a blow to European manufacturers and a boost to the Chinese economy?
Gudenus: Yes, that is one of the most important and paradoxical outcomes. The sanctions did not break Russia, but weakened Europe itself. China emerged as the winner: its exports to Russia rose by 46% in 2023, while European exports collapsed. Europe is isolating itself economically, while China is steadily expanding its influence and conquering markets that Europeans have abandoned for political reasons.
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