Russian Warning: EU to Lose Jobs in Response to Sanctions

Written by | Friday, April 25th, 2014
@Eubulletin

Russia’s steel group NLMK has warned that it would stop its production in Western European countries unless the European Union halts economic sanctions against Moscow. The Belgium’s newspaper “La Libre Belgique” published a letter on Wednesday (April 23) from the top management of NLMK addressed to the governments of those Western European countries in which the firm has its subsidiaries – Denmark, Italy, France, and Belgium. The letter pointed out that EU sanctions against Moscow can have “devastating effects” on joblessness in Europe. The letter comes after the latest Russian warnings against the new round of sanctions that Brussels is contemplating to implement in order to punish Russian actions during the crisis in Ukraine.
The company NLMK is almost entirely owned (86 percent) by Russian oligarch Vladimir Lisin and it employs more than 2,500 people throughout Europe. Almost half of the European employees are situated in Belgium. The Belgium’s regional government of Wallonia confirmed that it had received the letter but wished not to comment. Wallonia is home to NLMK’s facilities in Belgium. The country has gone through a number of high-profile factory shutdowns in recent years including Liege, Ford, and Arcelor Mittal. As Belgium is holding elections in May, the issue of further “factory withdrawals” has become very sensitive among the public.
The NLMK’s leadership substantiated that the company’s European facilities are “regularly in deficit” having made operational loss of 208 million euros last year. In their own words, financial support that European facilities received from the parent company in 2013 was higher than 271 million euros. This means, according to the NLMK, that if the parent company stopped donating European plants, they would have to shut down production immediately. This “would inevitably be followed by the dismissal of thousands of workers whose payroll for 2013 amounted 161 million euros, which would have a devastating effect on the region”, NLMK wrote. Therefore, as the letter stressed, the EU Commission should carefully consider the possibility of negative effects of anti-Russian measures.

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