The EU sanctions against Russia and reciprocate restrictive measures on the part of the Russian Federation will become “unbearable” for both sides and for that reason they will be abandoned in about one to three months.

In the review prepared by the Bank, it is noted that it is too early to expect for the conflict in Ukraine to de-escalate, though the EU and Russia will stand too much to lose if the crisis affects the energy trade.

According to the analysts of Danske Bank, the direct impact of the Ukrainian conflict on the European economy is not too strong. The greatest risk comes from the associated with it negative sentiments.

Among the Scandinavian countries, according to the Bank report, the most vulnerable is Finland, which is connected to Russia in trade, tourism and investments. On the contrary, Norway in the long run may even win if the EU tries to replace Russian gas with Norwegian.

The sanctions are unlikely to have a significant impact on the political situation in Russia, according to the report. The support for the president inside the country remains high, and if the economic growth will slow down only gradually, no serious political risks for Russia are expected, believe the analysts at the Bank. Under the current economic conditions, the Russian Federation will strengthen its economic and political ties with Latin American and Asian countries, indicates Danske Bank.

Danske Bank is part of the Danske Bank Group, the largest bank in Denmark, which is one of the leading financial institutions in Northern Europe.

Europe will abandon sanctions in one to three months


Analysis by Danske Bank