On Aug. 25, the S&P 500 reached a new milestone and a new all-time high by crossing over the 2000 point threshold in intra-day action before closing below that level by the end of the day. And since Russian imposed economic sanctions were placed on the U.S. and Europe back on Aug. 7, the Dow, S&P, and Nasdaq have all climbed higher by more than 4%.
However for Germany, and several other nations within the Eurozone that were ill prepared for the export restrictions placed on them by Russia in the aftermath of U.S. sanctions, the results have been far worse. Accordingly, smaller nations like Greece, Poland, and Finland have in just the past two weeks laid off workers, and experienced dire losses to their GDP as the cutting off of food imports hit a vital link in their export economy. But for the largest economy in the Eurozone, which has an estimated 3000-5000 businesses that directly trade with the Russian Federation, the consequences of sanctions are just beginning, and on the same day that the U.S. stock markets reached new all-time highs, the Federation of German Industry announced that sanctions imposed upon them by Russia could easily lead to a 25% drop in exports, and upwards of 50000 lost jobs in the short term.
As The Federation of German Industry (BDI) reports today, exports to Russia in H1 2014 dropped 15.5% from 2013 and "may drop by as much as 25% - posing a risk to 50,000 German jobs."
Export of German-made machine spare parts in particular hit by sanctions due to possible dual-use nature of goods, BDI industry group’s East European Committee said today in e-mailed statement.
Sanctions also impacting German exports to states linked to Russia via excise agreements: 1H exports to Belarus drop 21%
2014 German exports to Russia may drop by as much as 25%, pose risk to 50,000 German jobs. - Zerohedge
Ironically, it was this exact result that Russia was aiming for when they finally retaliated to U.S. sanctions placed upon their oligarchs and businesses going back several months. President Vladimir Putin knew that there was little they could do to directly affect the giant economy that was the United States, so instead they sought to isolate the U.S. from her allies by putting economic pressure on the volatile and inequitable European Union nations.
Germany is and always will be the linchpin that holds together the diverse coalition of nations within the EU, and should they choose to side with Russia, especially as more and more political and financial pressure gets placed on Angela Merkel by the Federation of German Industry, the rest of Europe will quickly follow. And in the end, the result of Germany's decisions could eventually lead to ramifications as small as simply refuting the ongoing U.S. sanctions now being imposed on Russia, or go as high as completely isolating the United States, and having them join in with the Eurasian power in the new trade coalitions that are right now being built with China and the rest of Asia.