VIENNA/FRANKFURT (dpa-AFX) – The German top economist Hans-Werner Sinn warns that the effects of the Russia sanctions will also be massive for the EU. “Russia’s raw materials and Western Europe’s industrial production are a perfect match. This trade is mutually more beneficial than trade between similar countries with similar products,” he told the Courier. The resources that Russia is no longer selling in Western Europe are now being sold to China, “and that’s helping the Chinese immensely.”
“We Europeans are voluntarily doing without fuels for which there is a world market. And by doing so, we are depressing the world market price of these fuels and thus promoting demand in other parts of the world – including China and Co. In short: helping the climate not our politics, but our competitors on the world markets,” says Sinn. He had always considered switching off nuclear energy in Germany to be a serious mistake.
The well-known economic researcher believes that Russia may go bankrupt. “That’s conceivable because the Russians’ foreign exchange reserves were frozen. That has dramatic consequences because the Russian central bank is no longer able to fight a devaluation of the ruble with their foreign exchange reserves. But they just can’t get close to their dollar and euro reserves anymore,” he explains the downward spiral.
With regard to possible aid for Austrian banks, which are particularly active in Russia, Sinn believes that the state must help – since these are political actions that the banks are quiet about. But: “The worst form is to simply give them money. If equity capital has to be made available, then the state should receive share rights in return,” the economic expert points out.
Regarding the sharp rise in inflation, Sinn said in the “Kurier”: “The ECB must slow down now. If it raises interest rates, it will slow down the harmful excess demand, which is more inflationary. The states would also borrow less. That would be an effective anti -Inflationary policies that are otherwise harmless.”/stf/ri/APA/nas