EU finance ministers are exploring ‘targeted’ ways to help companies with exposure to Russia deal with the fallout from the escalating war in Ukraine.
The move comes after the EU on Tuesday imposed a new round of sanctions on Russian oligarchs and trade. Finance Minister Paschal Donohoe did not rule out a ban on Russian oil and gas imports, but said sanctions should “hurt” Russia rather than Europe.
French Finance Minister Bruno Le Maire asked Margrethe Vestager, the EU’s competition chief, to present “all the instruments that will be made available to member states to protect the companies most affected”.
Mr Le Maire dismissed inflationary fears, insisting that state aid would only be channeled to companies with direct exposure to Russia.
“It is not universal support for all businesses, regardless of their situation,” Mr Le Maire told reporters in Brussels at the head of a meeting of 27 EU finance ministers this morning. “There must be a connection with the current crisis in Ukraine.
“We want targeted protection for companies that are most affected by the consequences of the war in Ukraine – those that consume a lot of gas and those that are most exposed to the Russian market.”
The fourth round of EU sanctions includes a ban on transactions with Russian state-owned companies, a partial ban on imports of Russian steel, a ban on new investment in Russian energy and a ban on exports of European luxury goods .
British Chancellor Rishi Sunak said the UK would impose similar measures, including tariffs on Russian vodka, fertiliser, steel and aluminium, and a ban on luxury goods exports.
EU economics chief Paolo Gentiloni said that “economic sanctions alone are not capable of changing the course of the war”, but that the Russian economy has been “heavily affected” until here.
European stocks fell more than 2% in Tuesday morning trading, with commodity-related sectors leading the losses as a spike in Covid cases in China added to the woes of the Russia-Ukraine war.
Expectations of a US interest rate hike later this week also increased volatility.
European miners fell 3.7%, oil and gas stocks fell 2.9% and crude prices fell nearly 5%. French luxury goods maker LVMH, which derives much of its revenue from China, fell 3.8%
German energy supplier RWE has become the latest major energy company to pull out of the Russian market, pledging to refrain from signing new energy supply contracts with Russian companies and saying it would end all non-energy activities.
RWE has a long-term supply agreement with Russia’s Gazprom, which it has the option to renegotiate, it said in a statement.
European companies such as Shell and BP have already announced their intention to withdraw from their business interests in Russia.
