Despite some initial disruption, the Kremlin’s efforts to counteract and mitigate the impact of sanctions have been quite successful. The state-led redistributive model has ensured that the authorities are well placed to respond to any disruption caused by the sanctions. In essence, the effect of the sanctions has reinforced a highly interventionist economic policy and a dominant role of the state in driving economic growth.

Is Russia’s economic policy a success or failure? The answer may strike many as self-evident. By most conventional measures, the economy has performed poorly in recent years. Between 2000 and 2008, Russia’s economy grew by an impressive seven per cent per year, driven by both rising oil prices and substantial productivity gains. Over the past ten years, however, Russia’s real GDP has risen, on average, by just one per cent per year.

While the main attention is focused on the US and EU sanctions against Russia over its wrongdoings in Ukraine, Kyiv is far from setting an example in their implementation. Paradoxically, the Ukrainian leadership has been rather reluctant and slow when it comes to the sanctioning of the Kremlin’s cronies.

A relationship that used to be characterised by the 1969-invoked “change through rapprochement” and “partnership on eye-level”, has seen a rapid cooling over the course of the last two years. Germany and Russia used to be close partners with vibrant exchange on the political, economic, social and cultural levels. Even when Russia’s relations with the rest of the West began to deteriorate in 2011/2012, following the untransparent presidential election, the German government was seen as a connector and mediator. However, since the annexation of Crimea and the war in Eastern Ukraine, the German political elite also distanced itself from president Putin and became a strong advocate of sanctions. At the same time, Germany has always been in favour of dialogue and remained at the discussion table, which helped to facilitate reaching the Minsk II agreement.