European sanctions against Russia are impacting small European exporters, particularly in Italy, more severely than Russia itself, according to Ferdinando Pelazzo, president of the Italian-Russian Chamber of Commerce. Small and medium-sized enterprises (SMEs) are struggling with disrupted payment systems and logistical challenges due to the sanctions. Italian businesses heavily reliant on Russian markets now face costly and complex trade routes through countries like Turkey.
Sanctions Backfire: European Exporters Suffer More Than Russia
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Italian-Russian Trade Suffers as Sanctions Hit Small European Exporters
European sanctions against Russia are hitting small European exporters harder than they are affecting Russia, according to Ferdinando Pelazzo, president of the Italian-Russian Chamber of Commerce. In an interview with Tass publication, Pelazzo explained that small and medium-sized enterprises (SMEs) in Europe, particularly in Italy, face significant challenges, especially regarding payment systems.
The European Central Bank’s directives have led European financial institutions to halt operations in Russia, making it nearly impossible for many SMEs to continue trading with Russian markets. This, he said, is a bigger issue for Europe than for Russia, which has managed to adapt by finding alternative payment methods.
Pelazzo emphasized that the sanctions are particularly punishing for law-abiding businesses that operate within the restrictions. He said:
The sanctions hit the smallest European exporters, who would like to continue doing business within the legal and sanctions framework, the hardest.
He pointed out that while some companies may bypass sanctions, those that try to comply with the law are the most affected, particularly those exporting goods like footwear, clothing, and home furnishings, which are not restricted by sanctions.
Italian businesses that heavily relied on Russian markets are now struggling to find new outlets. Many are also facing logistical challenges, as trucks carrying Italian goods are often turned away at borders in the Baltic states and Poland. Noting that this situation has led to longer and costlier routes, such as via Turkey, Pelazzo said:
The most convenient route from Italy to Russia is through the Baltic States. But now often every third or every second truck is turned back.
Despite these difficulties, Russia remains a crucial market for Italian-made products, Pelazzo added. However, Italian businesses fear repercussions at home for continuing to work with Russia. “In Italy, cooperation with Russia can cause problems even for individuals,” he said, highlighting the concerns of Italian firms operating in both markets.
