“We are ready to step up sanctions against Moscow and to show support for the people of Ukraine,” Eurogroup President Pascal Donahue told a news conference in Luxembourg on Monday.
The Eurogroup met on Monday in the shadow of the “atrocities committed by the Russian army against civilians in Ukraine,” Donachio said, adding that Ecofin would discuss “further action” by the 27 countries on Tuesday.
The Eurogroup discussed the effects of the war on the eurozone economy, as well as the uncertainty it creates for governments and businesses, the rise in energy and food prices, and the disruption of supply chains. Member states must continue to take emergency measures to mitigate the effects, especially on the most vulnerable, Donachio said.
In terms of growth in 2022, he estimated that it will continue to have a positive sign, because the eurozone entered this economic crisis with a strong recovery. However, he stressed that the consequences of the war will burden the cost of living of citizens, in the short and long term. He also said that neither the Commission nor the European Central Bank had found any indication that price increases would fuel an inflation spiral in the eurozone, but that it was being closely monitored.
For his part, Economy Commissioner Paolo Gentiloni emphasized that growth in the EU in 2022 would be below the 4% forecast set by the Commission in early February, but insisted that the EU would not enter a recession this year. The commission will release its new forecast for the European economy on May 16, although, as P. Gentiloni explained, “it is difficult to make estimates in the medium term”, due to many factors that remain unclear. For example, he said the impact on the economy in the event of an embargo on Russian energy imports would also depend on the duration of the war, consumer and investor confidence, and whether the crisis would become global.
Asked if the Eurogroup discussed the Russian president’s proposal to pay in rubles for gas, the economy commissioner replied: “most of the contracts that have been signed are in either euros or dollars and we respect the contracts.”
“The war in Ukraine is affecting the European economy far more than the global economy,” said Klaus Regling, head of the European Stability Mechanism (ESM). As he said, financial markets and analysts are taking into account the uncertainty for the future, revising downward growth expectations and upward inflation following rising energy and food prices. “The current crisis is as big as the oil crisis of the early 1970s,” said international analysts, said Regling. At the same time, he stressed that confidence indicators are falling and analysts expect that the second quarter of 2022 will have a negative sign of growth.
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