Russian Sanctions Begin To Backfire

Here's the downside of sanctions: They hurt the countries applying the sanctions as well the target countries.

A fresh measure of investor sentiment from Sentix shows confidence in the Eurozone plunging sharply due to the sanctions being imposed on Russia.

From Reuters:

The Sentix research group's index tracking morale among investors in the euro zone slumped to 2.7 in August, its lowest level in a year, from 10.1 in July. The consensus forecast in a Reuters poll had been for the sentiment index to ease slightly to 9.0.

"After last month's recovery the euro zone Sentix index has suffered a painful set-back," Sentix said in a statement, attributing it to sharply reduced growth expectations due to the sanctions.

"As this slump derives from an event which is subject to politics and power play, the central banks, particularly the European Central Bank, will have difficulty in trying to counter this," Sentix added.

The report notes that Germany, in particular, is seeing a sharp downturn.

It should be noted that by and large, the sanctions that have been imposed on Russia are not considered to be that steep. And yet already signs of pain are being felt in Europe. No wonder no true action is likely to be taken against Putin.