The European Union’s sanctions against Russia will build over time and will have a growing long-term impact on Moscow’s economy, according to the bloc’s executive arm, reported from Bloomberg.

An impact assessment prepared by the European Commission and seen by Bloomberg outlines the effects on Moscow due to the bloc’s sanctions, which have cut off around €91 billion ($99.1 billion) in imports from Russia and which cover €48 billion of EU exports.

The sanctions have "significantly degraded Russia’s industrial and technological capacity,” according to the report. "These effects will further intensify over time, as the measures have a structural, long-term impact on Russia’s budget, financial markets, foreign investment and its industrial and technological base.”

EU exports to and imports from Russia have fallen by more than 50% compared to 2021 resulting in "an unprecedented decoupling,” the assessment says. This has led to technology-dependent processing industries to shrink particularly fast, with high and medium-high technology manufacturing recording a 13% annual loss.

For exports of dual-use items and advanced technology the fall is particularly steep, dropping 78% in 2022 compared to 2019-2021.

The report estimates that nearly a third of Russia’s federal budget will be spent on defense and domestic security this year. Russian steel production was down 7% last year compared to 2021 and a further 10% drop is expected this year.

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