The common strategy of the 27 to address the impact of EU sanctions against Russia, but also the broader economic impact of Russia's invasion of Ukraine, was discussed by EU Finance Ministers at the Economic and Financial Affairs Council (ECOFIN) meeting in Brussels.
As announced on behalf of the French Presidency of the Council of the EU by French Finance Minister Bruno Lemaire, at a joint press conference with the Commission's Executive Vice President for Economic Affairs, Valdis Dombrovskis, the common strategy will be based on three pillars, support for affected households, support for companies exposed to rising fuel prices and promoting faster EU decoupling from Russian gas.
Also at the meeting, Finance Ministers reached an agreement on the Council's general approach on the regulation on the Carbon Border Adjustment Mechanism (CBAM), pending discussion on the final text of the regulation. Lemaire noted that all Finance Ministers expressed determination to implement without delay the measures of the 4th package of sanctions, and added that the 27 decided that they would support the lifting of the Most Favoured Nation status within the World Trade Organization, so that the EU would have the right to increase taxes on imports for Russian products.
Both Mr Lemaire and Mr Dombrovskis underlined that the 27 finance ministers agreed that, as the leaders said at the extraordinary meeting in Versailles, "all options are on the table" regarding possible sanctions.
Explaining that the situation has brought large increases in energy and food prices, Mr Lemaire detailed the elements of the common economic strategy to deal with the consequences, based on Commission proposals:
Support to all households affected by the increase in fuel prices, which he said has been done in several countries, including France, he said.
Targeted support to the companies most affected by the increase in gas prices, as they are exposed to international competition. Mr Lemaire referred to tools being prepared by the Commission, presented to the ministers by Competition Commissioner Margaret Vestager, which include loan support and low-interest loans.
Promoting Europe's energy independence through investment, diversification of energy sources and strengthening, among others, renewable ones. Lemaire underlined that there is currently great uncertainty due to prices, the situation in supply chains and the role of China, adding that the EU must be vigilant as in the face of uncertainty the strength of the EU lies in unity.
For his part, Mr. Dombrovskis noted that the impact of EU sanctions on Russia's economy is significant, with the ruble collapsing and the country's credit rating hovering near bankruptcy levels, but he also warned of the impact on EU economies.
Dombrovskis reiterated the need for member states to make use of existing instruments, such as the low-interest loans totalling €200 billion still available through the Recovery and Resilience Fund.
Higher inflation, rising energy and food prices and volatility in markets are expected, he said.
Regarding the carbon adjustment mechanism, Mr. Lemaire stressed that this is an important decision as it is a key step to tackle climate change, but also because Europe becomes the first region in the world to adopt such a measure.
During the meeting, Finance Ministers also noted progress in the effort to reach an agreement on the directive on the taxation of multinational companies.
Source: CNA
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