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Germany’s economy hit by trade sanctions on Russia

The sanctions being placed on Russia by Europe are having a negative impact on the bloc, experts have said.

European countries have implemented a series of trade embargoes as a punishment for Russia’s moves to annex Crimea and for its ongoing conflict in Ukraine.

Rowan Dartington Signature’s Guy Stephens said the eurozone had been “rife” with weak economic data and one of the biggest concerns was Germany because of its relationship with Russia.

“Sanctions against key trading partner Russia, coupled with declining demand from China, have begun to take their toll on Europe’s largest economy,” he said.

“Business confidence is also waning and GDP growth for next year has been downgraded to just 0.8 per cent, well below the government’s forecast of 1.3 per cent. All in all, the decline of Europe’s powerhouse could just turn out to be the ammunition that European Central Bank president Mario Draghi needs to begin a prolonged quantitative-easing campaign.”

Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, said Europe’s share of global profits had “collapsed”.

“And complicating the immediate path of liquidity and corporate earnings in Europe is the ongoing collapse in the Russian rouble,” he said.