Rémi Bourgeot reacts on franceinfo to the consequences of the economic sanctions imposed on Russia after the invasion of Ukraine and which will affect European markets, in particular those of energy.
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“The European energy strategy is being turned upside down, because of the relations which will be completely modified with Russia“, estimates the economist and researcher associated with the Institute of international and strategic relations (Iris) Rémi Bourgeot, Thursday March 3 on franceinfo.
He reacted to the consequences economic sanctions imposed on Russia after the invasion of Ukraine, and which will have repercussions on European markets, in particular those of energy.
The price of food products will increase by 3% on average next month, following negotiations between large retailers and suppliers. This will add to the economic consequences of the war in Ukraine. This could do a lot for the French markets…
For now, the main aspect remains the energy issue. Energy flows are less affected than one might think at present in view of this war in Ukraine. But in recent years, we have become increasingly dependent on Russia for gas. In Europe, this represents more than a third of imports, and above all we had these major projects, in particular Germany, of bypassing Ukraine to import more Russian gas. These projects are a priori abandoned, and we have no alternative for this sector. We see the tensions in the markets. The European energy strategy is in the process of being upset, because of the relations which will be completely modified with Russia. There will be upheavals in the months, the years to come.
Can this undermine the economic growth that was picking up after the Covid-19 crisis?
This adds up to different effects. Energy prices were already soaring due to this exit from the pandemic with a very strong rebound, and a shortage of certain raw materials, in particular energy. For a country as importing as France and Europe in general, this surge in prices strongly affects growth and threatens the rebound. But it remains difficult to measure: we had a very strong rebound in 2021, from the trough of 2020, we expected things to smooth out this year. But such high energy prices affect very broad sectors, particularly the food industry.
We also import rare metals from Russia, which are used in industry. Are consequences on our industrial production and jobs in industry possible?
We came out of the pandemic with shortages in many sectors, this adds to it. The sanctions, quite concentrated on the banking sector, pose a number of problems for payments. The flows are not completely stopped as seen on energy. This allows time to develop alternatives, which sometimes results in higher prices, and not necessarily shortages.