Russia has decided to relax its ban on EU food imports after having said that it would cost “hundreds of billions of rubles” in subsidies. Russia’s agriculture minister, Nikolai Fyodorov, said on Wednesday (20 August) that the government had set aside about 50 billion rubles (1.03 billion euro) for this year to ensure that EU-type products are stocked on shelves of Russian shops. He noted that the ministry hoped for more financing as the “volume of additional support needed to substitute for the embargoed items in full – if talking about short-term, through the end of the year – in tens of billions of rubles”. Russia imposed the ban on particular food items imported from the European Union as an act of retaliation for EU sanctions over the Ukraine crisis. On Wednesday, Russian Prime Minister, Dmitry Medvedev, also removed many products off the EU-food blacklist, such as potato and onion seeds, hybrid sugar maize and peas for planting, trout and salmon hatchlings, lactose-free dairy products, selected flavours and additives, protein concentrates, some food fibers, and selected vitamins.
The European Commission has so far designated 155 million euros to help EU farmers keep prices stable. Roger Waite, Commission’s spokesperson, said that the full cost of the Russian embargo would probably be “massively under 5 billion euros” but the ING bank calculated that the cost would be more than 6 billion euros and 130,000 jobs. The costs will likely only go up as both the EU and the United States are targeting Russian energy firms and banks with a ban on long-term debt. Russia’s top oil producer, Rosneft, has reportedly already asked the government for a financial injection of 1.5 trillion rubles (30 billion rubles) of its bonds so that it can make its debt repayments.