Since launching its war of choice in Ukraine, Russia has become the most sanctioned country in the world. However, EU and G7 sanctions have not yet achieved their short-term objectives—depriving Russia of financial resources to sustain its military operation or triggering a major, short-term economic shock capable of destabilising its political regime. As a result, attention is increasingly shifting toward assessing the long-term impact of sanctions.

This paper examines how Russia’s political economy has evolved since the full-scale invasion and how sanctions have influenced this evolution. It further analyses how these changes affect Russia’s capacity and strategy in responding to structural changes in the global economy, including the energy transition, technological advancements, and geo-economic challenges such as trade fragmentation and US-China economic decoupling. Finally, the paper considers the implications of these findings for the EU’s long-term strategy toward Russia.

The discussion will be opened by remarks from the discussant Mr Ivan Štefanec, former MEP from the European People's Party and currently affiliated with the Former Members of the European Parliament Association.