Britain’s oldest Conservative think tank, the Bow Group, has published a paper from six Eastern European analysts on the affect of sanctions against Russia on Eastern Europe and the wider West.
The report exclusively reveals that the estimated financial costs of sanctions to the West could exceed $700bn.
“The costs to Europe include €120bn worth of exports to Russia are in danger, a total volume of business of €326bn, almost 2 million jobs are at risk, as well as potential default on $147bn of Russian debt held by EU banks.
“The cost to the UK alone: €8.6bn of total exports, 119,000 jobs at stake, £27bn of Russian capital invested in the UK.
“Cost to the US: total trade worth $137bn, $38bn US exports to Russia, up to $30bn US capital tied up in Russia.”
“This results in a total potential exposure of approximately $755bn to Western economies”
The paper has been criticised by neo-liberal activists who feel the European Union should be united in a strong stance against Russia via sanctions.
Bow Group Chairman Ben Harris-Quinney said: “Like most papers we publish not everyone in the Bow Group agrees, and I disagree with many of the conclusions this paper draws.
“It’s important to consider foreign perspectives, but Britain must maintain a position of strength in perception and reality. Just as we are currently seeing in Cuba and Iran, détente without conditionality is defeat.
“However, after a decade of ill-advised diplomatic and military misadventure it has to be acknowledged that the theory of neo-liberal interventionism is bankrupt.
“It is therefore important to acknowledge the massive potential cost of sanctions to the UK and wider West, at over $700 billion, and explore other options.
“The strategy that Ronald Reagan and Margaret Thatcher advocated – peace through strength – must be a better answer. If, in partnership with other NATO powers we spent a proportion of that $700 billion on strengthening our military at home and abroad, it’s highly unlikely that NATO borders would be challenged by Russia or any other opportunist expansionism. That’s something that sanctions have not and will never achieve.
“For a Conservative Prime Minister the last 5 years has been a disappointment in terms of defence and care of our armed forces.
The Bow Group is challenging the government to now take a more detailed and long term approach to the Strategic Defence and Security Review, commit to 2 per cent GDP spending on defence, and a more pragmatic approach to using our resources to achieve this.”
The think tank has also pressured for the government to extend the Strategic Defence and Security view after many criticised the government’s new approach: consultations in no more than 300 words from stakeholders.