ANALYSIS: With inflation surging and consumers squeezed by a surge in energy prices, EU officials are moving carefully on the prospect of sanctions over Ukraine.
g and consumers squeezed by a surge in energy prices, EU officials are moving carefully on the prospect of sanctions. They want Russia to feel more pain than Europe from measures aimed at preventing an invasion of Ukraine.in the middle of winter, when they are needed most.
As US President Joe Biden warns that Russia’s military may move shortly, EU leaders such as France’s Emmanuel Macron are playing for time. “It will be difficult to inflict such a pain that would be felt,” he said. “It wouldn’t push Russia to the edge.”Energy is the biggest friction point. The US is a net energy exporter, but the EU relies on imports, and Russia is its No. 1 supplier of both oil and natural gas.
JPMorgan Chase economists warned last week a surge in the price of oil to $US150 a barrel would hammer growth and spur inflation. Sanctions against Russia would also benefit US exporters, which are seeking to ship more liquefied natural gas into Europe. payments system, which would make it much more difficult for Russia to collect payments on $US535 billion of exports a yearEurope’s businesses have more at stake because they have invested more in Russia than their US counterparts – and the gap has widened in recent years. Russia is also one of the biggest exporters of aluminum, nickel, steel and fertilisers.
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