The European Union is going to "pay a price" for the sanctions it is imposing on Russia for the invasion of Ukraine.
Nobody doubts it.
Nor is it questioned that the war will stop the exit from the coronavirus crisis.
And with this new and dramatic element on the scene, the European Commission is proposing to extend for another year the clause that suspends the fiscal rules of the Stability Pact, whose rules have been suspended since the pandemic exploded in 2020.
"We hope that the clause will be deactivated in 2023, but we continue to monitor the situation and will adjust the policy if necessary," the Commission's vice president, Valdis Dombrovskis, clarified prudently this Friday.
Other sources of the European Executive, off the microphone,
This debate has not been put on the table this Friday, as the first vice president and economy minister, Nadia Calviño, and the commissioner for the same area, Paolo Gentiloni, point out.
The meeting of the Ecofin, the finance ministers of the Twenty-seven, held in Paris, would have been focused on the consequences that the newly opened war in the East may have and the response in the form of sanctions from the European Union.
"The defense of our values has a price," said French Finance Minister Bruno La Maire.
“A limited price”, Gentiloni has pointed out, and always much lower than what Russia would pay, which is intended to be financially isolated and sink its economy.
To justify this, the Italian has explained that while exports to the country governed by Vladimir Putin account for 4% of the total volume of the EU,
However, the price to pay would have already begun to be quantified: in the worst case scenario and if Russia cut off the gas supply, the Commission calculates that growth would be one percentage point below forecasts in 2022, now 4% , and that inflation could increase one more point from the forecast 3.5%, according to community sources.
From the Commission it is recalled that all these figures at this time are very "speculative" because, as Dombrovskis and the president of the ECB, Christine Lagarde, said, it is "premature" because the conflict has only started a day ago, its cause is not known. duration nor Russia's reaction to European and American sanctions.
Consequences on Italy
The price is one more argument for those who defend the rules of the stability pact, those that Romano Prodi described as "stupid" when he was president of the Commission, are suspended for another year.
With a speech as cautious as that of Dombrovskis, the Italian Gentiloni has pointed out that the time to make a decision begins soon: "We will make a first step with next week's communication."
"In principle, the suspension [of the escape clause] should not be extended beyond 2022, but naturally we will assess this situation in the coming months," he pointed out.
Precisely Italy, its evolution and the impact that the Ukrainian crisis and Moscow's reaction could have on this country, is one of the elements that will weigh most in this decision.
It is more exposed than the other Member States.
Goldman Sachs calculates that the blow to this country from a potential gas cut would subtract about three points from the gross value added of its economy, while France or Germany
alone
It would mean a cut of one point.
That explains his reticent attitude towards the sanctions and that his prime minister, Mario Draghi, came to ask that the punishment not affect energy and that the president of the United States, Joe Biden, and the president of the Commission, have taken care of the relationship with the Roman.
In addition, the transalpine country is one of those that would suffer the most if the European Union decides to return to the rules of the stability pact, which are summarized in setting a maximum limit of 3% of GDP for the budget deficit, and a limit of 60% to public debt, a level to which we must return at an impossible rate for a country that has total public liabilities of around 140% of its GDP.
If there is one element through which the Ukrainian crisis could have an impact on the EU, it is energy.
The increase in the price of hydrocarbons and thus inflation is almost taken for granted.
The Commission warned of this in its forecasts when pointing out the risks, and these have materialized.
And this has greatly strengthened the position of the Spanish government, which has long been calling for a regulation that "decouples" the electricity prices paid by households and companies from the price on the commodity markets, as Vice President Calviño has pointed out.
The Spanish minister has also taken advantage of the meeting to request compensation for the sectors that may suffer the most from the sanctions, such as the agri-food sector, which already in 2014 suffered from the Russian response to the punishment imposed by the EU for invading Crimea.