as far as the sanctions are concerned, the classic economic doctrine of comparative cost advantages comes into effect here. the Europeans have cut themselves off (especially Germany) from cheap energy from Russia. this has resulted in an enormous disadvantage in industrial production and, as a result, industrial companies are migrating not only from Germany but also from the periphery to America. Russia was a very important sales market for parts of Europe, if you think of East Germany or other EU states in Eastern Europe. in addition, the Russian economy has succeeded in largely decoupling itself from the old trend through new cooperation and a certain openness to technology. this is something that many people have not yet understood: the Russian economy of today is much more technology-oriented than that of 20 years ago.
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and the consumer has also taken a real hit due to the inflation that has resulted. in addition, the real estate market is now suffering because many people have to sell their properties and bank balance sheets are shrinking as a result. the sanctions have a whole chain of effects that trigger a negative spiral
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