EU countries are split over the ban on Russian energy as their dependence on energy imports varies. Russia accounted for over 40 percent of natural gas imported by the EU in 2019.
Oil prices in Europe have been surging since the start of the conflict in Ukraine amid fears that the European Union (EU) may ban the energy imports from Russia, a sign that the proposed embargo will inevitably backfire on its own economy.
This has made the EU more eager to shake off its reliance on Russian energy by proposing new plans to diversify energy supplies and make itself independent from Russian energy.
EU member countries are split over the ban on Russian energy as their dependence on energy imports from Russia varies. On the whole, the EU is heavily reliant on Russian energy, which takes up a significant proportion of the EU's annual imports. According to the Eurostat, Russia accounted for more than 40 percent of natural gas and 30 percent of crude oil imported by the EU in 2019.
At an EU leaders' summit in France earlier, Latvia, Poland and Lithuania called for a ban on Russian energy imports, but were bluntly rejected by Germany and some other countries that simply cannot cut off the energy imports from Russia. "Europe's supply of energy for heating, mobility, electricity and industry currently cannot be secured in any other way," German Chancellor Olaf Scholz said in defending his rejection.
Germany's Federal Minister for Economic Affairs and Climate Action Robert Habeck warned of the repercussions of a ban on Russian energy, noting it will cause severe damage to the economy and the society.
In response to rising energy prices in Europe and the current uncertainty in supply, the EU unveiled on March 8 a plan called REPowerEU aimed at diversifying gas supplies and cutting down on energy imports from Russia.
According to the plan, the EU seeks to make itself independent from Russian fossil fuels well before 2030. By diversifying gas supplies, speeding up the roll-out of renewable gases and replacing gas in heating and power generation, the EU tries to reduce its demand for Russian gas by two-thirds before the end of 2022.
�� RUSSIA-UKRAINE WAR— Bruegel (@Bruegel_org) March 21, 2022
In 2022 already, the direct budgetary impact of the consequent policy decisions could amount to 1.25% of GDP, if not more. Long-term Europe is confronted with the need to revamp energy systems and more defence spending @pisaniferry https://t.co/lwzrRPfTbu
"We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition," European Commission President Ursula von der Leyen said.
The energy tussle has already weighed on the European economy by pushing the inflation higher. The euro area recorded a 5.9-percent annual inflation in February, a new all-time high. According to the Eurostat, the main contributor of the surging inflation was energy price, which climbed a staggering 31.7 percent in February.
As a ceasefire remains elusive in Ukraine, economists predicted that the inflation could go further up in the future. The European Central Bank already lowered its projection for the economic growth in 2022 to 3.7 percent in the euro area.
In a research note, Goldman's Chief European Economist Sven Jari Stehn forecast with his team members that the euro area GDP growth will be slashed by 2.2 percentage points in 2022 if the energy flows from Russia to Europe are cut off completely.
The Chinese embassy in Moscow denounced that more than 80 percent of the armed conflicts registered since the middle of the last century to the beginning of the present century were started by United States #China #US #Russia pic.twitter.com/sSkUn6Jxrp— teleSUR English (@telesurenglish) February 28, 2022