The Effects of Sanctions and Counter-Sanctions on EU-Russian Trade Flows. CEPS Commentary, 5 July 2016

After Russia annexed Crimea in early 2014 and then intervened, manu militari, in the Eastern part of Ukraine, the European Union wanted to show its disapproval and put pressure on Russia to change its behaviour. A wide variety of measures were taken, including the imposition of individual restrictions, such as asset freezes and travel bans, but also the suspension of development loans from the EBRD. But the EU (together with the United States) also took, in July and September 2014, a set of broader measures: limited access to EU primary and secondary capital markets for targeted Russian financial institutions and energy and defence companies; export and import bans on trade in arms; an export ban for dual-use goods and reduction of Russia’s access to sensitive technologies and services linked to oil production.

Concording EU trade and production data over time. National Bank of Belgium Working Paper No. 239, December 2012

This paper provides concordance procedures for product-level trade and production data in the EU and examines the implications of changing product classifications on measured product adding and dropping at Belgian firms. Using the algorithms developed by Pierce and Schott (2012a, 2012b), the paper develops concordance procedures that allow researchers to trace changes in coding systems over time and to translate product-level production and trade data into a common classification that is consistent both within a single year and over time. Separate procedures are created for the eightdigit Combined Nomenclature system used to classify international trade activities at the product level within the European Union as well as for the eight-digit Prodcom categories used to classify products in European domestic production data. The paper further highlights important differences in coverage between the Prodcom and Combined Nomenclature classifications which need to be taken into account when generating combined domestic production and international trade data at the product level. The use of consistent product codes over time results in less product adding and dropping at continuing firms in the Belgian export and production data.

Chasing globalisation: Germany's economic relations with the BRIC countries. OSW Report, November 2013

The Eurozone crisis has forced German exporters to speed up their expansion onto the emerging markets, in particular Brazil, Russia, India and China. The development observed in those countries has become an important substitute for the consequences of the economic slowdown in Europe.To illustrate the scale of cooperation between Germany and the BRIC countries, it is enough to quote figures concerning Germany’s trade. Between 2000-2011 the share of trade with the BRIC states in the entire German trade exchange rose from 5.5% to 13.3%. In the same period opposite tendencies were observed in the figures relating to trade with the USA, whose share in German trade fell from 9.6% to 6.2%. The report discusses the major tendencies present in Germany’s cooperation with the BRIC countries, and examines how the German state supports German companies in their business activities on these markets. The main method used to investigate these processes is the economic analysis of trade and capital flows between Germany and the BRIC countries, supplemented by conclusions drawn from discussions with German experts. The main issue discussed in the text is the role of the state in stimulating the expansion of German companies onto the BRIC markets. In the context of these activities, political relations and the proper use of export and investment guarantees and development aid are of major importance.

Compositional effects on productivity, labour cost and export adjustments. Bruegel Policy Contribution 2012/11, June 2012

Sectoral shifts, such as shrinkage of low labour productivity and the low-wage construction sector, can lead to apparent increased aggregate average labour productivity and average wages, especially when capital intensity differs across sectors. For 11 main sectors and 13 manufacturing sub-sectors, we quantify the compositional effects on productivity, wages and unit labour costs (ULCs) based and real effective exchange rates (REER), for 24 EU countries. Compositional effects are greatest in Ireland, where the pharmaceutical sector drives the growth of output and productivity, but other sectors have suffered greatly and have not yet recovered. Our new ULC-REER measurements, which are free from compositional effects, correlate well with export performance. Among the countries facing the most severe external adjustment challenges, Lithuania, Portugal and Ireland have been the most successful based on five indicators, and Latvia, Estonia and Greece the least successful. There is evidence of downward wage flexibility in some countries, but wage cuts have corrected just a small fraction of pre-crisis wage rises and came with massive reductions in employment even in the business sector excluding construction and real estate, highlighting the difficulty of adjusting wages downward.

Productivity, labour cost and export adjustment: Detailed results for 24 EU countries. Bruegel Working Paper 2012/11, 12 July 2012

As a background document for Bruegel Policy Contribution 2012/11 ‘Compositional effects on productivity, labour cost and export adjustment’, this working paper presents detailed results for 24 EU countries on: • The sectoral changes in the economy; • The unit labour costs (ULC) based real effective exchange rate (REER) and its main components; • Export performance. • The ULC-REERs are calculated: • For the total economy, the business sector (excluding agriculture, construction and real estate activities), and some main sectors; • Using both actual aggregates and fixed-weight aggregates, as the latter are free from the impacts of compositional changes; • Against 30 trading partners and against three subsets of trading partners: euro-area, non-euro area EU, non-EU.