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Russian invasion of Ukraine to dominate EU finance ministers’ talks

An image illustration of euro banknotes, April 25, 2014. REUTERS/Dado Ruvic/File Picture/File Picture

PARIS, Feb 24 (Reuters) – Russia’s invasion of Ukraine will dominate EU finance ministers’ deliberate talks on Friday, officers mentioned, because the EU weighs how a lot the struggle on its jap borders will hit the economic system of the 27-nation bloc this yr.

Ukrainian forces battled Russian invaders round almost the entire nation’s perimeter on Thursday after Moscow mounted a mass assault by land, sea and air within the greatest assault on a European state since World Battle Two. learn extra

EU leaders will announce new sanctions after an emergency summit on Thursday night that can freeze Russian property, halt its banks’ entry to European monetary markets and goal “Kremlin pursuits”, senior officers mentioned. learn extra

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“The Russian aggression will certainly function prominently in tomorrow’s discussions and the principle focus for all finance ministers will likely be to evaluate the financial penalties of the escalation because it evolves,” an EU official mentioned.

France’s finance ministry, which is internet hosting the talks, mentioned in a letter to attendees that the assembly can be a chance to show EU unity. Classes on Saturday have been cancelled.


The ministry mentioned the ministers would talk about the influence of the Russian invasion on their economies and particularly the influence on power costs.

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They will even talk about the sanctions that EU leaders are set to agree on Thursday night in addition to potential Russian counter-sanctions.

Earlier than the invasion, the ministers had been on account of talk about the post-pandemic financial restoration, modifications to their fiscal guidelines and dashing up the event of EU capital markets.

“The main focus has shifted now,” a second official mentioned.

“Finance ministers will talk about the financial outlook for Europe, however the EU Fee’s winter forecast is reasonably out of date now,” the official mentioned.

The European Fee forecast earlier in February that financial progress within the 19 nations sharing the euro can be 4.0% this yr, lower than the 4.3% anticipated final November, due to one other wave of COVID-19 infections, provide chain bottlenecks and document excessive inflation brought on by power costs.

However the struggle in Ukraine creates a brand new threat issue for the economic system, not solely as a result of many EU exporters will not be capable to promote their items to Russia below the sanctions regime, but in addition as a result of Moscow might retaliate by curbing fuel and oil deliveries to Europe. Russia is the EU’s primary power provider.

European Financial Commissioner Paolo Gentiloni mentioned earlier than the full-scale Russian invasion that developments in Ukraine made the 4.0% progress forecast extra unsure.

During the last yr, Russia has not raised spot fuel deliveries to Europe regardless of hovering demand, which helped enhance power costs and euro zone inflation to document highs. Quick value progress has turn out to be a political downside for EU governments.

Reporting by Jan Strupczewski and Christian Kraemer; further reporting by Leigh Thomas, Modifying by Alex Richardson and Gareth Jones

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