“The issue of protecting our economies will be at the heart of the discussions we will have at the end of the week”, said French Finance Minister Bruno Le Maire on Tuesday 22 February, who will host his European counterparts at an informal meeting in Paris on Friday 25 and Saturday 26 February.
He mentioned ongoing discussions, notably the day before with the President of the Eurogroup, Paschal Donohoe, aimed at studying all the scenarios that will allow “to protect the European economies and the French economy from the consequences of this escalation in Ukraine”.
On Tuesday, the EU announced targeted measures to sanction Russia’s recognition of the independence of the two breakaway territories in eastern Ukraine (see EUROPE 12896/1).
“These measures will be immediate, heavy and effective”, Mr Le Maire predicted before the French Senate before their formal adoption, citing measures to prevent Russia from financing itself, individual sanctions on Russian political and economic figures, and a freeze on the assets of Russian state banks. According to him, the consequences of the crisis in Ukraine will be “contained” on the French economy, which exports less than €7 billion to Russia and imports less than €10 billion from that country. “We will maintain the freeze on gas prices for individuals in all circumstances”, calling for an acceleration of the reduction of dependence on Russian gas.
According to the European Commissioner for the Economy, Paolo Gentiloni, Moscow’s “violation of international law” will “greatly increase (the) uncertainty” surrounding the European economy in 2022.
At the beginning of February, the European Commission revised its economic growth forecast for this year slightly downwards from 4.3% to 4.0% of GDP, due to a slowdown in the recovery caused by the impact of the Omicron variant of the virus responsible for Covid-19 and the continuing uncertainty generated by energy prices and geopolitical tensions (see EUROPE 12888/5).
The Eurogroup will also meet on Friday in Paris. According to a European source, geopolitical tensions on Europe’s eastern flank will “undoubtedly be raised”. The European sanctions resulting from the Russian-Ukrainian crisis, as well as Germany’s announcement of a freeze on the authorisation procedure for the Nord Stream II gas pipeline (see EUROPE 12896/2), will have an economic impact and in terms of energy supply, which in turn will have repercussions on the level of inflation, this source considered. (Original version in French by Mathieu Bion)