Diverging Costs of Russian Gas Ban Complicate EU Sanctions Push
(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.
European Union countries discussing tougher sanctions against the Kremlin would face vastly different economic outcomes if they opted for a complete cut-off in Russian energy supplies, according to a French research paper.
While the impact for France would be “modest,” with a decline of about 0.15% to 0.3% in gross national income, nations including Lithuania, Bulgaria, Slovakia, Finland and the Czech Republic could experience drops of as much as 5%, projections by the Conseil d'Analyse Economique released on Monday showed.
Germany, the continent's largest economy, faces an “overall moderate” impact that could reach 3% in the most-pessimistic scenario, according to the report.
The diverging risks may make it harder to attain the EU unanimity needed to hit Russia with stiffer penalties -- a move some member-states want in response to reports of war crimes in Ukraine. Others, including Germany, are opposed to sanctioning Russia's energy industry, as well as its maritime trade and other key industries.
The Conseil d'Analyse Economique, a non-partisan research center that answers to France's prime minister, said the EU could limit the economic impact for its members by opting for high tariffs on Russian fossil fuels instead of a total embargo. According to the paper, a 40% levy would reduce the quantities imported by about 80% while dividing by around three or four the economic losses for the most-vulnerable countries.
The research took into account the cascading effects along production value chains in a model with 30 sectors and 40 nations. While the authors acknowledged some imprecision, they said the orders of magnitude are “very robust.”
| Read more... |
|---|
©2022 Bloomberg L.P.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
