Financial News

  • 19 August 2014, 13:59

EU Compensates Farmers Over Russia Sanctions

The European Commission has pledged 100m to assist fruit and vegetable producers hit by Russia's ban on EU food imports.

The money will come from the reformed Common Agricultural Policy, which includes an emergency reserve to compensate for market disruption.

The ban, which Russia imposed earlier this month, coincided with the harvesting season.

It has led to a supply glut in the 28-nation union which is weighing on prices and causing losses for producers.

The Commission aims to compensate producers who decide not to harvest some of their goods or give products away for free.

Russia is the main export market for many EU fruits and vegetables, especially those from the Continent.

Last week the Commission said it would compensate nectarine and peach producers for 10% of their crop.

The new plan expands funding to a much wider level, and includes producers of peppers, pears, grapes, tomatoes and cucumbers.

Moscow has banned imports in retaliation for EU and US sanctions against Russia introduced over what the West sees as Russia's destabilisation of Ukraine.

Meanwhile, despite rhetoric from the EU against Russia, at least one EU state has now admitted the bloc and Nato are not in a position to give military support to Ukrainian troops fighting pro-Russian separatists in the east of the country.

"That is of course not possible," Finland's Prime Minister Alexander Stubb said.

"We know that Nato only gives military help to its members, while the EU does not have the capacity to give this type of support."

On Monday, Russia's central bank also announced it would intervene less in the foreign exchange market to support the ruble as it works toward letting the currency float freely by the end of the year.

Moscow also said all outstanding questions about a 280-truck convoy of humanitarian aid had now been resolved, however a delivery date for the goods is still not certain.

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