European Union Anti-Russian Sanctions and the Eurozone Economy

Russia leads the country in the number of sanctions imposed on the country due to the invasion of Ukraine, overtaking Syria, Iran and North Korea combined.

According to the website Castellum AI, as of the morning of March 23, 2022, 2754 sanctions were imposed on Russia before the start of the special operation and 4362 after the invasion. Some originate as early as 2014, after Crimea.

Coordinated with Western Allies list of sanctions The EU is constantly growing, they are aimed at everything from Russian banks to state-owned media and luxury goods. Their main task is to disable the military machine of the Kremlin. Among the five main punitive measures are:

  1. Some Russian banks are disconnected from SWIFT to isolate them from the global payment system.
  2. The assets of oligarchs and legislators have been frozen.
  3. The European Union closed the skies to Russian aircraft.
  4. Luxury goods cannot be exported to Russia.
  5. The state TV channel RT and the Sputnik agency have been removed from the air of the European Union.

However, the tough sanctions imposed EU against Russia will also have a negative impact on the eurozone economy. Christine Lagarde, President of the European Central Bank, said:

A Russian-Ukrainian war will significantly affect economic activity and cause inflation due to rising energy and commodity prices, as well as disruption to international trade and weakening confidence. The extent of these impacts will depend on the evolution of the conflict, the impact of current sanctions and possible further measures.

The ECB forecast was revised and showed the highest inflation rate since the creation of the single European currency: 5.1%, not 3.2%, as previously expected. So the EU summit will be devoted to energy prices – this topic will become a priority. The leaders of the 27 member countries will have to decide in Brussels how to soften the blow to the overall economy.

Spain’s Socialist Prime Minister Pedro Sanchez is proposing price caps and, last but not least, decoupling gas prices from electricity prices. Colleagues from Italy, Greece, Portugal, France, Belgium and some Eastern countries agree with him. Sanchez says:

“Prices on the market now do not reflect reality. Therefore, we must take action at the European level, both on the supply side and on pricing, to protect our citizens and our industry.”

However, the northern countries, Germany and the Netherlands, do not support this proposal and oppose any intervention in the energy market.

Brussels will ask other capitals to prevent gas supply disruptions and ensure that storage facilities are at least 90% full by winter. And EC Vice-Chairman Maros Sefcovic is ready to present at the summit a wide range of measures to counteract energy inflation:

“We have to find the best solution to the problem. Therefore, we offer different options for heads of state and government to choose from. Each option has its pros and cons. We will put them on the table so that there is a better structure for the leaders’ discussion.”

In the meantime, the European Union has already set a priority task for itself: to reduce Russian gas imports by two thirds by 2023 and to abandon it completely by 2027, writes euronews.

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