It is always less comfortable to have to punish your neighbor than an adversary on the other side of the world, and in this game, Europe has more to lose than its American ally against Russia in the Ukrainian file.
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“It is obvious that Europe exposes itself much more than the United States, because geographical proximity goes hand in hand with close economic and security ties”, comments to AFP Guntram Wolff, the director of the institute. Bruegel from Brussels.
Despite the imposition of European sanctions after the annexation of Crimea in 2014, Moscow remains the fifth largest export market for the European Union, with 81.5 billion euros from January to November 2021.
It is also the continent’s third largest supplier behind China and the United States, according to Eurostat, with 142 billion euros of goods in the first 11 months of last year.
“This trade relationship matters to us,” acknowledged European Commission President Ursula von der Leyen during the World Economic Forum in Davos on January 20, amid escalating tensions between the West and Russia. and when Moscow launched military maneuvers at the gates of Ukraine.
The leader, however, added that this relationship “means even more for Russia”, specifying that the EU is the first partner and first investor of the country.
“Punish yourself”
“The room for maneuver is not at all the same for Europe” compared to the United States, observes the lawyer specializing in economic sanctions Olivier Dorgans, noting the risk of “punishing oneself” by sanctioning the other in this type of conflict.
The most telling illustration is that of hydrocarbons, potential target among the arsenal of sanctions against Moscow in a context of soaring prices on the Old Continent and in the middle of the winter season, if by chance President Vladimir Putin invaded Ukraine.
Moscow is the source of more than 40% of European gas imports, and a drying up of the Russian tap, because of Western sanctions or because of Russian retaliatory measures, could increase the energy bill a little more. millions of households.
“There are reservations but we are talking about a few weeks of consumption”, analyzes Guntram Wolff. “The reserves would reach zero and it would then be very complicated to offset 100% of Russian gas imports with gas from Qatar or other producers,” he said, warning of the risk of shortages.
On this very thorny issue, a senior White House official said on Tuesday that the West had taken measures to protect Europe’s natural gas supplies.
Swift
The other big file is that of the Russian financial sector.
The United States could prohibit transactions in dollars, the main currency of international exchanges, or exclude Moscow from the Swift organization, an essential system of international banking exchanges founded in 1973 and within which there are 300 Russian banks and institutions.
Depending on the different scenarios, companies doing business with Russia would be strongly affected. Germany, which shares strong economic ties with Russia, has shown hostility to the idea of sanctions on Swift, according to a European diplomatic source.
A finer approach could be chosen over the negotiations between Westerners, believes lawyer Olivier Dorgans, so as not to subject European companies to excessive economic upheavals.
“Instead of sanctioning all Russian banks, we may start with those closest to circles linked to Vladimir Putin, we may not touch the gas sector, which is too important for Europe, but first the oil sector. “, he imagines, evoking however the need for harsher sanctions than in 2014.
In any case, according to the lawyer, “if the United States decided to go it alone, the impact of American economic sanctions outside its borders is so strong that the major players in the EU, banking or energy , would find themselves obliged to comply”.
Not enough to risk destabilizing the European economy, however, thinks the chief economist for Europe of the analysis firm Capital Economics Andrew Kenningham, calling the effect of the sanctions on the economy “relatively weak and short”. of the euro zone in comparison with the risks linked to the pandemic.