Sanctions on Russia is COSTING the European Union billions, figures reveal

Counter-measures from Moscow against the financial penalties have sparked a sharp drop in EU exports to Russia, a study by the Austrian Institute for Economic Research (WIFO) found.

And the countries that can lease afford the fall in exports have been among those hit hardest.

Cyprus exports to Russia fell by 34.5 per cent from 2014 to 2016, while Greece has seen a drop of 23.2 per cent.

Overall, goods to the former Soviet state have plunged by around 5.7 per cent annually since 2014 - going from €120 billion (£108bn) 2013 to €72 billion (£65bn) in 2016.

And around 40 per cent of the fall is thanks to sanctions, with the rest of the decline due to other factors including lower oil prices and rouble values, according to the WIFO.

Russia has gone from the fourth to fifth-largest trading partner of the EU, behind the USA, Switzerland, China and Turkey.

The biggest hit was in 2014, according to the WIFO.

The study added: "In the following two years, the trade flows were gradually diverted, if to a small extent, to third countries."

Sanctions on Russia helped push the country into a bitter financial crisis in 2015, with the economy shrinking by 3.7 per cent.

The penalties came after the Kremlin's invasion of Crimea.

Recently the US hit Moscow with further sanctions for interference in the US election.

But apparently concerned that a crippled Russia could further hurt the eurozone economy - Jean Claude–Juncker spoke out.